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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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March 6, 1998 (February 24, 1998)
(Date of Report (date of earliest event reported))
CENDANT CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 1-10308 06-0918165
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or organization) File No.) Identification Number)
6 SYLVAN WAY
PARSIPPANY, NEW JERSEY 07054
(Address of principal executive office) (Zip Code)
(973) 428-9700
(Registrant's telephone number, including area code)
None
(Former name, former address and former fiscal year if applicable)
ITEM 5. OTHER EVENTS
On March 2, 1998, Cendant Corporation (the "Company") completed a public
offering of 29,900,000 FELINE PRIDES(SM) (consisting of "Income PRIDES"(SM) and
"Growth PRIDES"(SM)) and 2,300,000 6.45% Trust Originated Preferred Securities
(the "Trust Preferred Securities"). Initially, 27,600,000 Trust Preferred
Securities were held as a component of the FELINE PRIDES. The FELINE
PRIDES initially consist of (A) 27,600,000 units (referred to as "Income
PRIDES") with a stated amount per Income PRIDES of $50 (the "Stated Amount")
and (B) 2,300,000 units (referred to as "Growth PRIDES") with a face amount per
Growth PRIDES equal to the Stated Amount. Each Income PRIDES initially consists
of a unit comprised of (a) a stock purchase contract (a "Purchase Contract")
under which (i) the holder will purchase from the Company on February 16, 2001
(The "Purchase Contract Settlement Date"), for an amount of cash equal to the
Stated Amount, a number of newly issued shares of common stock, $0.01 par value
per share (the "Common Stock"), of the Company, and (ii) the Company will pay
the holder unsecured contract adjustment payments ("Contract Adjustment
Payments") at the rate of 1.05% of the Stated Amount per annum and (b)
beneficial ownership of a Trust Preferred Security. Each Growth PRIDES
initially consists of a unit comprised of (a) a Purchase Contract under which
(i) the holder will purchase from the Company on the Purchase Contract
Settlement Date, for an amount in cash equal to the Stated Amount, a number of
newly issued shares of Common Stock of the Company, and (ii) the Company will
pay the holder Contract Adjustment Payments, at the rate of 1.3% of the Stated
Amount per annum and (b) a 1/20 undivided beneficial interest in a U.S.
Treasury Security in an amount equal to $1,000 payable on February 15, 2001.
The Company will, directly or indirectly, own all of the common securities of
the Trust (the "Common Securities" and, together with the Trust Preferred
Securities, the "Trust Securities") representing undivided beneficial interests
in the assets of the Trust. The Trust exists for the sole purpose of issuing
the Trust Securities and investing the proceeds thereof in an equivalent amount
of debentures of the Company due February 16, 2003 and initially bearing
interest at 6.45% per annum (the "Debentures").
The ability of the Trust to pay distributions on the Trust Preferred
Securities will be solely dependent on the receipt of interest payments from
the Company on the Debentures. The Company will have the right at any time,
and from time to time, to defer interest payments on the Debentures for
successive extension periods (the "Extension Periods") limited, in the
aggregate, to a period not extending beyond the maturity date of the
Debentures. During any such Extension Period, (a) the Company shall not
declare or pay dividends on, make distributions with respect to, or redeem,
purchase or acquire, or make a liquidation payment with respect to, any of its
capital stock (other than (i) purchases or acquisitions of capital stock of
the Company in connection with the satisfaction by the Company of its
obligations under any employee or agent benefit plans or the satisfaction by
the Company of its obligations pursuant to any contract or security
outstanding on the date of such event requiring the Company to purchase
capital stock of the Company, (ii) as a result of a reclassification of the
Company's capital stock or the exchange or conversion of one class or series
of the Company's capital stock for another class or series of the Company's
capital stock, (iii) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (iv)
dividends or distributions in capital stock of the Company (or rights to
acquire capital stock) or repurchases or redemptions of capital stock solely
from the issuance or exchange of capital stock or (v) redemptions or
repurchases of any rights outstanding under a shareholder rights plan), (b)
the Company shall not make any payment of interest, principal or premium, if
any, on or repay, repurchase or redeem any debt securities issued by the
Company that rank junior to the Debentures and (c) the Company shall not make
any guarantee payments with respect to the foregoing (other than payments
pursuant to the guarantees of the Trust Preferred Securities and the Common
Securities). Prior to the termination of any such Extension Period, the Company
may further extend the interest payment period; provided, that such Extension
Period may not extend beyond the stated maturity of the Debentures. Upon the
termination of any Extension Period and the payment of all amounts then due,
the Company may commence a new Extension Period subject to the above
requirements.
(SM) Service Mark of Merrill Lynch & Co., Inc.
ITEM 7. EXHIBITS
Exhibit
No. Description
- ------- -----------
1.1 Underwriting Agreement dated February 24, 1998, among Cendant
Corporation, Cendant Capital I, Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Chase Securities
Inc.
4.1 Amended and Restated Declaration of Trust of Cendant Capital I,
dated February 24, 1998.
4.2 Preferred Securities Guarantee Agreement, dated March 2, 1998,
between Cendant Corporation and Wilmington Trust Company.
4.3 Purchase Contract Agreement (including as Exhibit A the form of
the Income PRIDES and as Exhibit B the form of the Growth
PRIDES), dated as of March 2, 1998, between Cendant Corporation
and The First National Bank of Chicago.
4.4 Indenture, dated as of February 24, 1998, between Cendant
Corporation and The Bank of Nova Scotia Trust Company of
New York as Trustee.
4.5 First Supplemental Indenture, dated February 24, 1998, between
Cendant Corporation and The Bank of Nova Scotia Trust Company
of New York as Trustee.
4.6 Remarketing Agreement, dated March 2, 1998 among Cendant
Corporation, Cendant Capital I, The First National Bank of
Chicago, and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated.
5.1 Opinion of Eric J. Bock regarding the legality of the Securities
registered in the Registration Statement on Form S-3 of Cendant
Corporation as filed with the Commission on January 29, 1998, and
subsequently amended (File no. 333-45227).
5.2 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP regarding the
legality of the Securities of the Cendant Trusts registered in
the Registration Statement on Form S-3 of Cendant Corporation as
filed with the Commission on January 29, 1998, and subsequently
amended (File no. 333-45227).
8.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to tax
matters in connection with the Registration Statement on Form S-3
of Cendant Corporation as filed with the Commission on January
29, 1998, and subsequently amended (File No. 333-45227).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CENDANT CORPORATION
BY: /s/ James E. Buckman
James E. Buckman
Senior Executive Vice President
and General Counsel
Date: March 6, 1998
CENDANT CORPORATION
CURRENT REPORT ON FORM 8-K
REPORTED DATED MARCH 6, 1998 (FEBRUARY 24, 1998)
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
1.1 Underwriting Agreement dated February 24, 1998, among Cendant
Corporation, Cendant Capital I, Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Chase Securities
Inc.
4.1 Amended and Restated Declaration of Trust of Cendant Capital I,
dated February 24, 1998.
4.2 Preferred Securities Guarantee Agreement, dated March 2, 1998,
between Cendant Corporation and Wilmington Trust Company.
4.3 Purchase Contract Agreement (including as Exhibit A the form of
the Income PRIDES and as Exhibit B the form of the Growth
PRIDES), dated as of March 2, 1998, between Cendant Corporation
and The First National Bank of Chicago.
4.4 Indenture, dated as of February 24, 1998, between Cendant
Corporation and The Bank of Nova Scotia Trust Company of
New York as Trustee.
4.5 First Supplemental Indenture, dated February 24, 1998, between
Cendant Corporation and The Bank of Nova Scotia Trust Company
of New York as Trustee.
4.6 Remarketing Agreement, dated March 2, 1998 among Cendant
Corporation, Cendant Capital I, The First National Bank of
Chicago, and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated.
5.1 Opinion of Eric J. Bock regarding the legality of the Securities
registered in the Registration Statement on Form S-3 of Cendant
Corporation as filed with the Commission on January 29, 1998, and
subsequently amended (File no. 333-45227).
5.2 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP regarding the
legality of the Securities of the Cendant Trusts registered in
the Registration Statement on Form S-3 of Cendant Corporation as
filed with the Commission on January 29, 1998, and subsequently
amended (File no. 333-45227).
8.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to tax
matters in connection with the Registration Statement on Form S-3
of Cendant Corporation as filed with the Commission on January
29, 1998, and subsequently amended (File No. 333-45227).
EXECUTION COPY
CENDANT CORPORATION
(a Delaware Corporation)
CENDANT CAPITAL I
(a Delaware Business Trust)
26,000,000 FELINE PRIDES
consisting of
24,000,000 Income PRIDES
and
2,000,000 Growth PRIDES
2,000,000 TRUST ORIGINATED PREFERRED SECURITIES
UNDERWRITING AGREEMENT
Dated: February 24, 1998
CENDANT CORPORATION
(A DELAWARE CORPORATION)
CENDANT CAPITAL I
(A DELAWARE BUSINESS TRUST)
26,000,000 FELINE PRIDES(Service Mark)
(Stated Amount of $50 per FELINE PRIDES),
consisting of
24,000,000 Income PRIDES (SERVICE MARK)
each consisting of
a Purchase Contract of Cendant Corporation Requiring the Purchase on
February 16, 2001 (or earlier) of certain Shares of Common Stock of
Cendant Corporation
and
a 6.45% Trust Originated Preferred Security(Service Mark)
(TOPrS(Service Mark)) of Cendant Capital I
and
2,000,000 Growth PRIDES(Service Mark)
each consisting of
a Purchase Contract of Cendant Corporation Requiring the
Purchase on February 16, 2001 (or earlier) of certain
Shares of Common Stock of Cendant Corporation
and
a 1/20 Undivided Beneficial Interest in a Zero-Coupon U.S. Treasury Security
Having a Principal Amount Equal to $1,000 and maturing on February 15, 2001;
and
2,000,000 6.45% Trust Originated Preferred Securities (TOPrS)
of Cendant Capital (Liquidation Amount $50 per Trust Originated
Preferred Security (TOPrS)
- ----------------
(Service Mark) "FELINE PRIDES," "INCOME PRIDES," "GROWTH PRIDES,"
"TRUST ORIGINATED PREFERRED SECURITIES" AND "TOPRS" ARE SERVICE MARKS OF
MERRILL LYNCH & CO., INC.
UNDERWRITING AGREEMENT
February 24, 1998
To the Underwriters named in Schedule A
Ladies and Gentlemen:
Cendant Corporation, a Delaware corporation (the "Company"), and
Cendant Capital I, a Delaware statutory business trust (the "Trust" and,
together with the Company, the "Offerors"), confirm their agreement with the
several underwriters named in Schedule A hereto (collectively, the
"Underwriters", which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") serves as
representative (in such capacity, the "Representative"), with respect to the
sale to the Underwriters of (A) 26,000,000 FELINE PRIDESSM, of which (I)
24,000,000 will initially consist of a unit (referred to as Income PRIDESSM)
with a Stated Amount of $50 comprised of (a) a stock purchase contract (the
"Purchase Contract") under which (i) the holder will purchase from the Company
on February 16, 2001, a number of shares (the "Shares") of common stock, $0.01
par value per share, of the Company (the "Common Stock") equal to the
Settlement Rate as set forth in the Purchase Contract Agreement (defined below)
and (ii) the Company will pay to the holder contract adjustment payments, if
any, and (b) beneficial ownership of a 6.45% Trust Originated Preferred
SecuritySM of the Trust, having a liquidation amount of $50 (each an "Income
PRIDES Preferred Security"), and (II) 2,000,000 will initially consist of a
unit (referred to as Growth PRIDESSM) with a Stated Amount of $50 comprised of
(a) a Purchase Contract and (b) a 1/20 undivided beneficial interest in a
zero-coupon U.S. Treasury Security (CUSIP No. 912833 CD 0) (each a "Treasury
Security") maturing on February 15, 2001, and (B) 2,000,000 6.45% Trust
Originated Preferred Securities of the Trust, having a liquidation amount of
$50 (the "Separate Preferred Securities" and, together with the Income PRIDES
Preferred Securities, the "Preferred Securities"; such Income PRIDES, Growth
PRIDES and Separate Preferred Securities being referred to herein collectively
as the "Initial Securities") and with respect to the grant by the Offerors to
the Underwriters, acting severally and not jointly, of options to purchase up
to 3,600,000 additional Income PRIDES (the "Option Income PRIDES"), 300,000
additional Growth PRIDES (the "Option Growth PRIDES") and 300,000 additional
Separate Preferred Securities (the "Option Preferred Securities" and, together
with the Option Income PRIDES and the Option Growth PRIDES, the "Option
Securities"; the Option Securities together with the Initial Securities being
referred to herein as the "Securities") as described in Section 2(b) hereof. In
accordance with the terms of the Purchase Contract Agreement, to be dated as of
March 2, 1998, between the Company and The First National Bank of Chicago, as
Purchase Contract Agent (the "Purchase Contract Agent"), the Income PRIDES
Preferred Securities and the Treasury Securities will be pledged by the
Purchase Contract Agent, on behalf of the holders of Securities that are Income
PRIDES and Growth PRIDES, respectively, to The Chase Manhattan Bank, as
Collateral Agent, pursuant to the Pledge Agreement, to be dated as of March 2,
1998 (the "Pledge Agreement"), among the Company, the Purchase Contract Agent
and the Collateral
4
Agent, to secure such holders' obligation to purchase Common Stock under the
Purchase Contracts. The rights and obligations of (i) a holder of Income PRIDES
in respect of Preferred Securities, subject to the pledge thereof, and Purchase
Contracts, (ii) a holder of Growth PRIDES in respect of beneficial interest in
the Treasury Securities, subject to the pledge thereof, and Purchase Contracts
and (iii) a holder of Separate Preferred Securities will be evidenced by
Security Certificates (the "Security Certificates") to be issued pursuant to
the Purchase Contract Agreement.
The Preferred Securities will be guaranteed by the Company with
respect to distributions and payments upon liquidation, redemption and
otherwise (the "Preferred Securities Guarantee") pursuant to the Preferred
Securities Guarantee Agreement, to be dated as of March 2, 1998 (the "Preferred
Securities Guarantee Agreement"), executed and delivered by the Company and
Wilmington Trust Company, as trustee (the "Guarantee Trustee"), for the benefit
of the holders from time to time of the Preferred Securities, and certain
back-up undertakings of the Company. All, or substantially all, of the proceeds
from the sale of the Preferred Securities will be combined with the entire net
proceeds from the sale by the Trust to the Company of its common securities
(the "Common Securities" and, together with the Preferred Securities, the
"Trust Securities") that will be guaranteed by the Company with respect to
distributions and payments upon liquidation and redemption (the "Common
Securities Guarantee" and, together with the Preferred Securities Guarantee,
the "Guarantees") pursuant to the Common Securities Guarantee Agreement, to be
dated as of March 2, 1998 (the "Common Securities Guarantee Agreement" and,
together with the Preferred Securities Guarantee Agreement, the "Guarantee
Agreements"), executed and delivered by the Company for the benefit of the
holders from time to time of the Common Securities, and certain back-up
undertakings of the Company, and will be used by the Trust to purchase the
6.45% Debentures due February 16, 2003 (the "Debentures") of the Company. The
Preferred Securities and the Common Securities will be issued pursuant to the
amended and restated declaration of trust of the Trust, dated as of February
24, 1998 (the "Declaration"), among the Company, as Sponsor, Michael P. Monaco
and James E. Buckman (the "Regular Trustees"), and Wilmington Trust Company, as
the institutional trustee (the "Institutional Trustee"), and Wilmington Trust
Company, as the Delaware trustee (the "Delaware Trustee" and, together with the
Institutional Trustee and the Regular Trustees, the "Trustees"), and the
holders from time to time of undivided beneficial interests in the assets of
the Trust. The Debentures will be issued pursuant to the Indenture, dated as of
February 24, 1998 (the "Base Indenture"), between the Company and The Bank of
Nova Scotia Trust Company of New York, as Trustee (the "Debt Trustee"), as
supplemented by the First Supplemental Indenture, dated February 24, 1998 (the
Base Indenture, as supplemented and amended, being referred to as the
"Indenture"). Capitalized terms used herein without definition shall be used as
defined in the Prospectus (defined below).
Pursuant to a remarketing agreement (the "Remarketing Agreement") to
be dated as of March 2, 1998, among the Company, the Trust, the Purchase
Contract Agent and a
5
nationally recognized investment banking firm chosen by the Company, certain
Preferred Securities may be remarketed, subject to certain terms and
conditions.
Prior to the purchase and public offering of the Securities by the
several Underwriters, the Offerors and the Underwriters shall enter into an
agreement substantially in the form of Exhibit A hereto (the "Pricing
Agreement"). The Pricing Agreement may take the form of an exchange of any
standard form of written communication between the Offerors and the
Underwriters and shall specify such applicable information as is indicated in
Exhibit A hereto. The offering of the Securities will be governed by this
Agreement, as supplemented by the Pricing Agreement. From and after the date of
the execution and delivery of the Pricing Agreement, this Agreement shall be
deemed to incorporate the Pricing Agreement.
The Company and the Trust have filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-45227) and pre-effective amendments no. 1, no. 2 and no. 3 thereto covering
the registration of securities of the Company and the Trust, including the
Securities and the Purchase Contracts and Preferred Securities included in and
shares of Common Stock underlying, the Securities, under the Securities Act of
1933, as amended (the "1933 Act"), including the related preliminary prospectus
or prospectuses, and the offering thereof from time to time in accordance with
the rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations") and the Company has filed such pre- and post-effective amendments
thereto as may be required prior to the execution of the Pricing Agreement.
Such registration statement, as so amended, has been declared effective by the
Commission. Such registration statement, as so amended, including the exhibits
and schedules thereto, if any, and the information, if any, deemed to be a part
thereof pursuant to Rule 430A(b) of the 1933 Act Regulations (the "Rule 430A
Information") or Rule 434(d) of the 1933 Act Regulations (the "Rule 434
Information"), is referred to herein as the "Registration Statement"; and the
final prospectus relating to the offering of the Securities (including any base
prospectus and prospectus supplement), in the form first furnished to the
Underwriters by the Company for use in connection with the offering of the
Securities, are collectively referred to herein as the "Prospectus"; provided,
however, that all references to the "Registration Statement" and the
"Prospectus" shall be deemed to include all documents incorporated therein by
reference pursuant to the Securities Exchange Act of 1934, as amended (the
"1934 Act"), prior to the execution of the applicable Pricing Agreement;
provided, further, that if the Offerors file a registration statement with the
Commission pursuant to Section 462(b) of the 1933 Act Regulations (the "Rule
462(b) Registration Statement"), then after such filing, all references to
"Registration Statement" shall be deemed to include the Rule 462(b)
Registration Statement; and provided, further, that if the Offerors elect to
rely upon Rule 434 of the 1933 Act Regulations, then all references to
"Prospectus" shall be deemed to include the final or preliminary prospectus and
the applicable term sheet or abbreviated term sheet (the "Term Sheet"), as the
case may be, in the form first furnished to the Underwriters by the Company in
reliance upon Rule 434 of the 1933 Act Regulations, and all references in this
Underwriting Agreement to the date of the Prospectus shall mean the date of the
Term Sheet. A "preliminary
6
prospectus" shall be deemed to refer to any prospectus used before the
registration statement became effective and any prospectus that omitted, as
applicable, the Rule 430A Information, the Rule 434 Information or other
information to be included upon pricing in a form of prospectus filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations, that was used
after such effectiveness and prior to the execution and delivery of the
applicable Pricing Agreement. For purposes of this Agreement, all references to
the Registration Statement, any preliminary prospectus, the Prospectus or any
Term Sheet or any amendment or supplement to any of the foregoing shall be
deemed to include the electronically transmitted copy thereof filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information that is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information that is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the 1934 Act that is incorporated by reference in the
Registration Statement, such preliminary prospectus or the Prospectus, as the
case may be.
The Offerors understand that the Underwriters propose to make a public
offering of the Securities as soon as the Underwriters deem advisable after the
Registration Statement is declared effective, the Pricing Agreement has been
executed and delivered and the Declaration, the Indenture and the Preferred
Securities Guarantee Agreement have been qualified under the Trust Indenture
Act of 1939, as amended (the "1939 Act").
SECTION 1. Representations and Warranties. (a) The Offerors represent
and warrant to and agree with each Underwriter as of the date hereof, as of the
date of the Pricing Agreement (such later date being hereinafter referred to as
the "Representation Date") and on each Date of Delivery (as defined in Section
2(b) of this Agreement) that:
(i) No stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been
initiated or, to the knowledge of the Offerors, threatened by the
Commission.
(ii) The Company and the Trust meet, and at the respective times of
the commencement and consummation of the offering of the Securities will
meet, the requirements for the use of Form S-3 under the 1933 Act. Each of
the Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act. At the respective times the
Registration Statement, any Rule 462(b)
7
Registration Statement and any post-effective amendments thereto
became effective, at each Representation Date, at the Closing Time (as
defined herein) and at any Date of Delivery, the Registration Statement,
any Rule 462 Registration Statement and any amendments or supplements
thereto complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and the 1939 Act
and the rules and regulations of the Commission under the 1939 Act (the
"1939 Act Regulations") and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading. At the date of the Prospectus, at the Closing Time and at each
Date of Delivery, the Prospectus and any amendments and supplements thereto
did not and will not include an untrue statement of a material fact or omit
to state a material fact necessary, in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. If the Offerors elect to rely upon Rule 434 of the 1933 Act
Regulations, the Offerors will comply with the requirements of Rule 434.
Notwithstanding the foregoing, the representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished to the Offerors in writing by the
Underwriters through the Representative expressly for use in the
Registration Statement or the Prospectus.
Each preliminary prospectus and prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied as so
filed in all material respects with the 1933 Act Regulations and, if
applicable, each preliminary prospectus and the Prospectus delivered to the
Underwriters for use in connection with the offering of the Securities
will, at the time of such delivery, be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(iii) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement or the Prospectus, at the time they
were or hereafter are filed or last amended, as the case may be, with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act, and the rules and regulations of Commission
thereunder (the "1934 Act Regulations"), and at the time of filing or as of
the time of any subsequent amendment, did not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were or are made, not misleading; and any
additional documents deemed to be incorporated by reference in the
Registration Statement or the Prospectus will, if and when such documents
are filed with the Commission, or when amended, as appropriate, comply in
all material respects to the requirements of the 1934 Act and the 1934 Act
Regulations and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated
8
therein or necessary to make the statements therein not misleading;
provided, however, that the representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished to the Offerors in writing by the
Underwriters through the Representative expressly for use in the
Registration Statement or the Prospectus.
(iv) The accountants (individually an "Accountant" and together the
"Accountants") who have reported upon the audited financial statements and
schedules included or incorporated by reference in the Registration
Statement are each independent public accountants as required by the 1933
Act and the 1933 Act Regulations with respect to (i) the Company and (ii)
each corporation whose financial statements have been included in the
Registration Statement for each of the years reported on by such
Accountants.
(v) The consolidated financial statements of the Company included or
incorporated by reference in the Registration Statement and the Prospectus,
together with the related schedules and notes, present fairly the financial
position of the Company and its consolidated subsidiaries as at the dates
indicated and the results of their operations for the periods specified.
Except as otherwise stated therein such financial statements have been
prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, included or incorporated by reference in the
Registration Statement and the Prospectus present fairly in accordance with
GAAP the information required to be stated therein. The consolidated ratio
of earnings to fixed charges included in the Prospectus has been calculated
in compliance with Item 503(d) of Regulation S-K of the Commission. Any
selected financial information and summary financial data included in the
Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement and the Prospectus. Any
pro forma financial statements and the related notes thereto included in
the Registration Statement and the Prospectus present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described therein,
and the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions
and circumstances referred to therein.
(vi) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, and except as otherwise
stated therein, (A) there has been no material adverse change and no
development that could reasonably be expected to result in a material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiar-
9
ies, considered as one enterprise whether or not arising in the
ordinary course of business (a "Material Adverse Effect"), (B) there have
been no transactions entered into by the Company or any of its
subsidiaries, other than those arising in the ordinary course of business,
that are material with respect to the Company and its subsidiaries,
considered as one enterprise, (C) except for regular dividends on the
Common Stock in amounts per share that are consistent with past practice or
the applicable charter document or supplement thereto, respectively, there
has been no dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock.
(vii) The Company is duly organized and is validly existing in good
standing as a corporation under the laws of the State of Delaware, with
corporate power and corporate authority to own, lease and operate its
properties and to conduct its business as presently conducted and as
described in the Prospectus and to enter into and perform its obligations
under, or as contemplated under, this Agreement, the Pricing Agreement, the
Remarketing Agreement, the Purchase Contract Agreement, the Pledge
Agreement, the Indenture, the First Supplemental Indenture, the
Declaration, the Debentures and the Guarantee Agreements. The Company is
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good standing
would not have a Material Adverse Effect.
(viii) Each significant subsidiary (as such term is defined in clauses
(1) and (2) of Rule 1-02(w) of Regulation S-X promulgated under the 1933
Act), if any, of the Company (each, a "Significant Subsidiary") is set
forth on Schedule B hereto. Each Significant Subsidiary is duly organized
and is validly existing and in good standing under the laws of the
jurisdiction of its incorporation with corporate power and corporate
authority under such laws to own, lease and operate its properties and
conduct its business. Each Significant Subsidiary is duly qualified to
transact business as a foreign corporation and is in good standing in each
other jurisdiction in which it owns or leases property of a nature, or
transacts business of a type, that would make such qualification necessary,
except to the extent that the failure to so qualify or be in good standing
would not have a Material Adverse Effect. Except as otherwise stated in the
Registration Statement and the Prospectus, all of the outstanding shares of
capital stock of each Significant Subsidiary have been duly authorized and
validly issued and are fully paid and nonassessable and are owned by the
Company, directly or through one or more Significant Subsidiaries, free and
clear of any pledge, lien, security interest, charge, claim, equity or
encumbrance of any kind (each, a "Lien") except for such Liens as are not,
individually or in the aggregate, material to the Company and its
Significant Subsidiaries, considered as one enterprise.
10
(ix) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus; since the date indicated in the
Prospectus there has been no change in the consolidated capitalization of
the Company and its subsidiaries (other than changes in outstanding Common
Stock resulting from employee benefit plan or dividend reinvestment and
stock purchase plan transactions); all of the issued and outstanding
capital stock of the Company has been authorized and validly issued, is
fully paid and non-assessable and conforms to the descriptions thereof
contained in the Prospectus; and no holder thereof is or will be subject to
personal liability by reason of being such a holder.
(x) The Trust has been created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act (the
"Delaware Act") with the power and authority to own property and to conduct
its business as described in the Registration Statement and Prospectus and
to enter into and perform its obligations under this Agreement, the Pricing
Agreement, the Preferred Securities, the Common Securities and the
Declaration; the Trust is qualified to transact business as a foreign
company and is in good standing in each jurisdiction in which such
qualification is necessary, except where the failure to so qualify or be in
good standing would not have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business affairs or business
prospects of the Trust; the Trust is not a party to or otherwise bound by
any material agreement other than those described in the Prospectus; the
Trust is and will, under current law, be classified for United States
federal income tax purposes as a grantor trust and not as an association
taxable as a corporation.
(xi) This Agreement, the Pricing Agreement (if any) and the
Remarketing Agreement have been duly authorized, executed and delivered by
each of the Company and the Trust.
(xii) The Purchase Contract Agreement has been authorized by the
Company and at the Closing Time and at each Date of Delivery, when validly
executed and delivered by the Company and assuming due authorization,
execution and delivery of the Purchase Contract Agreement by the Purchase
Contract Agent, will constitute a legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms
except to the extent that enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws affecting
creditors' rights generally or by general principles of equity (regardless
of whether enforcement is considered in a proceeding at law or in equity)
(the "Bankruptcy Exceptions"), and will conform in all material respects to
the description thereof contained in the Prospectus.
(xiii) The Pledge Agreement has been authorized by the Company and, at
the Closing Time and at each Date of Delivery, when validly executed and
delivered by the
11
Company and assuming due authorization, execution and delivery of the
Pledge Agreement by the Collateral Agent and the Purchase Contract Agent,
will constitute a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms except to the
extent that enforcement thereof may be limited by the Bankruptcy
Exceptions, and will conform in all material respects to the description
thereof contained in the Prospectus.
(xiv) The Common Securities have been authorized by the Declaration
and, when issued and delivered by the Trust to the Company against payment
therefor as described in the Registration Statement and the Prospectus,
will be validly issued and will represent undivided beneficial interests in
the assets of the Trust and will conform in all material respects to the
description thereof contained in the Prospectus; the issuance of the Common
Securities is not subject to preemptive or other similar rights; and at the
Closing Time all of the issued and outstanding Common Securities of the
Trust will be directly owned by the Company free and clear of any material
security interest, mortgage, pledge, lien, encumbrance, claim or equitable
right.
(xv) The Declaration has been authorized by the Company and, at the
Closing Time, will have been executed and delivered by the Company and the
Trustees, and assuming due authorization, execution and delivery of the
Declaration by the Institutional Trustee and the Delaware Trustee, the
Declaration will, at the Closing Time, be a legal, valid and binding
obligation of the Company and the Regular Trustees, enforceable against the
Company and the Regular Trustees in accordance with its terms, except to
the extent that enforcement thereof may be limited by the Bankruptcy
Exceptions, and will conform in all material respects to the description
thereof contained in the Prospectus; the Declaration has been duly
qualified under the 1939 Act.
(xvi) Each of the Guarantee Agreements has been authorized by the
Company and, when validly executed and delivered by the Company, and, in
the case of the Preferred Securities Guarantee Agreement, assuming due
authorization, execution and delivery of the Preferred Securities Guarantee
by the Guarantee Trustee, will constitute a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms except to the extent that enforcement thereof may be limited
by the Bankruptcy Exceptions, and each of the Guarantees and the Guarantee
Agreements will conform in all material respects to the description thereof
contained in the Prospectus; the Guarantee Agreements have been duly
qualified under the 1939 Act.
(xvii) The Securities have been authorized for issuance and sale to
the Underwriters and, when issued and delivered against payment therefor as
provided herein, will be validly issued and fully paid and non-assessable
and will conform in all material respects to the description thereof
contained in the Prospectus; the issuance of the Securities is not subject
to preemptive or other similar rights.
12
(xviii) The Shares have been duly authorized and validly reserved for
issuance by the Company and, when issued and delivered in accordance with
the provisions of the Purchase Contract Agreement and the Pledge Agreement,
will be validly issued and fully paid and non-assessable and will conform
in all material respects to the description thereof contained in the
Prospectus; and the issuance of such Shares will not be subject to
preemptive or other similar rights. All corporate action required to be
taken for the authorization, issuance and delivery of the Shares has been
validly taken.
(xix) The Indenture has been authorized by the Company and qualified
under the 1939 Act and, at the Closing Time, will have been executed and
delivered and will constitute a legal, valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms
except to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions; the Indenture will conform in all material respects
to the description thereof contained in the Prospectus.
(xx) The Debentures have been authorized by the Company and, at the
Closing Time, will have been executed by the Company and, when
authenticated in the manner provided for in the Indenture and delivered
against payment therefor as described in the Prospectus, will constitute
legal, valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions, and will
be in the form contemplated by, and entitled to the benefits of, the
Indenture and will conform in all material respects to the description
thereof contained in the Prospectus.
(xxi) Each of the Regular Trustees of the Trust is an employee of the
Company and has been authorized by the Company to execute and deliver the
Declaration.
(xxii) Neither the Company nor any of its Significant Subsidiaries is
in violation of its charter or by-laws. The Trust is not in violation of
the Declaration or its certificate of trust filed with the State of
Delaware on February 5, 1998 (the "Certificate of Trust"); none of the
Company, any of its Significant Subsidiaries or the Trust is in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, note, lease, loan
or credit agreement or any other agreement or instrument (the "Agreements
and Instruments") to which the Company, any of its Significant Subsidiaries
or the Trust is a party or by which any of them may be bound, or to which
any of the property or assets of the Company, any Significant Subsidiary or
the Trust is subject, or in violation of any applicable law, rule or
regulation or any judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its Significant Subsidiaries or any of their respective
properties or assets, which violation or default would, singly or in the
aggregate, have a Material Adverse Effect.
13
(xxiii) The entry by the Company into the Purchase Contracts
underlying the Income PRIDES and the Growth PRIDES, the offer of the
Securities as contemplated herein and in the Prospectus, the issue of the
Shares and the sale of the Shares by the Company pursuant to the Purchase
Contracts; the execution, delivery and performance of this Agreement, the
Pricing Agreement, the Remarketing Agreement, the Purchase Contracts, the
Purchase Contract Agreement, the Pledge Agreement, the Declaration, the
Preferred Securities, the Common Securities, the Indenture, the Debentures,
the Guarantee Agreements and the Guarantees, and the consummation of the
transactions contemplated herein, therein and in the Registration Statement
(including the issuance and sale of the Securities and the use of proceeds
from the sale of the Securities as described in the Prospectus under the
caption "Use of Proceeds") and compliance by the Offerors with their
obligations hereunder and thereunder do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of any of the terms or provisions of, or constitute a
default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company, any subsidiary or the Trust pursuant to, the
Agreements and Instruments (except for such conflicts, breaches or defaults
or liens, charges or encumbrances that would not result in a Material
Adverse Effect), nor will such action result in any violation of any
applicable law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its Significant
Subsidiaries, or the Trust, or any of their assets, properties or
operations (except for such violations that would not result in a Material
Adverse Effect), nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any Significant
Subsidiary or the Declaration or Certificate of Trust. As used herein, a
"Repayment Event" means any event or condition that gives the holder of any
note, debenture or other evidence of indebtedness of the Company, any
Significant Subsidiary or the Trust (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of all
or a portion of such indebtedness by the Company, any Significant
Subsidiary or the Trust.
(xxiv) There is no action, suit, proceeding, inquiry or investigation
before or by any court or governmental agency or body, domestic or foreign,
now pending or to the knowledge of the Company threatened against or
affecting the Trust, the Company or any of its Significant Subsidiaries
that is required to be disclosed in the Registration Statement and the
Prospectus (other than as stated therein), or that might reasonably be
expected to result in a Material Adverse Effect, or that might be
reasonably expected to materially and adversely affect the consummation of
this Agreement, the Pricing Agreement, the Remarketing Agreement, the
Purchase Contracts, the Purchase Contract Agreement, the Pledge Agreement,
the Guarantee Agreements, the Indenture or the transactions contemplated
herein or therein. The aggregate of all pending legal or governmental
proceedings to which the Trust, the Company or any Significant Subsidiary
14
is a party or of which any of their respective properties or operations is
the subject that are not described in the Registration Statement and the
Prospectus, including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a Material Adverse
Effect.
(xxv) The Company and each Significant Subsidiary have good and
marketable title to all properties and assets, including, without
limitation, intangible property rights described in the Prospectus as owned
by it, free and clear of all liens, charges, encumbrances, restrictions
(other than as described in Section 1(a)(xxvi) hereof) or defects, except
such as (A) are described in (1) the Indenture dated as of October 1, 1994
between the Company and the Bank of America, Illinois, as trustee, (2) the
Indenture and Supplemental Indenture No. 1 dated as of February 28, 1996
between the Company and First Trust of Illinois, National Association, as
trustee, (3) the 364 Day Credit Agreement, dated as of March 4, 1997, among
PHH Corporation, PHH Vehicle Management Services Inc., the lenders
thereunder and The Chase Manhattan Bank, (4) the Five Year Credit
Agreement, dated as of March 4, 1997, among PHH Corporation, the lenders
thereunder and The Chase Manhattan Bank, (5) the Five Year Revolving Credit
and Competitive Advance Facility Agreement, dated as of October 2, 1996,
among the Company, the lenders thereunder and The Chase Manhattan Bank, (6)
the Indenture dated as of June 5, 1997 between PHH Corporation and The
First National Bank of Chicago and (8) the Amended and Restated Pooling and
Servicing Agreement, dated as of October 5, 1994, as amended, among Cendant
Mobility Funding Corporation, Cendant Mobility Services, Inc., Citicorp
North America, Inc. and Bankers Trust Company, the Amended and Restated
Purchase Agreement dated as of October 5, 1994, as amended, between Cendant
Mobility Services, Inc. and Cendant Mobility Funding Corporation and the
Amended and Restated Investor Funding Agreement, dated as of October 5,
1994, as amended, among Cendant Mobility Funding Corporation, Bankers Trust
Company, Citicorp North America, Inc., as agent, Bank of America, Illinois,
as co-agent, and the investors named therein, (B) are leases of real
property in which the Company or its Significant Subsidiaries have good
title and that would be marketable but for the requirement that the
landlord consent to an assignment of the lease or (B) are neither material
in amount nor materially significant in relation to the business of the
Company and its Significant Subsidiaries, considered as one enterprise; all
of the leases and subleases material to the business of the Company and the
Significant Subsidiaries, considered as one enterprise, and under which the
Company or any Significant Subsidiary holds properties described in the
Prospectus, are in full force and effect, and neither the Company nor any
Significant Subsidiary has any notice of any material claim of any sort
that has been asserted by anyone adverse to the rights of the Company or
any Significant Subsidiary under any such lease or sublease.
(xxvi) Subject to each of the franchise and license agreements entered
into by the Company or any of its Significant Subsidiaries, the Company and
each of the Significant
15
Subsidiaries own or have the unrestricted right to use such patents,
patent licenses, trademarks, trademark licenses, service marks, service
mark licenses and trade names and registrations thereof (collectively,
"Intellectual Property") as are necessary to carry on their respective
businesses as presently conducted, except where the failure to own or
possess any of the Marks (as defined below) or Ramada Marks (as defined
below) would not have a Material Adverse Effect. In addition to, and not
in, limitation of, anything else contained in this paragraph (xxvi), the
Company or a Significant Subsidiary (y) is the exclusive owner of all
rights, title and interest (subject to all existing franchise and license
agreements referred to above) in and to the Marks within the United States
and outside the United States is the owner of the registrations and
applications as are necessary to carry on its business as described in the
Prospectus and as currently conducted, except where the failure to be such
owner would not have a Material Adverse Effect and (z) is the exclusive
licensee in the United States of the Ramada Marks. The Intellectual
Property with respect to the Company's Century 21, Coldwell Banker and ERA,
Days Inns of America, Inc., Super 8 Motels, Inc., Villager Franchise
Systems, Inc., Knights Franchise Systems, Inc., Howard Johnson and
Travelodge Hotels, Inc. businesses (each as described in the Prospectus and
as currently conducted) is referred to herein as the "Marks" and the
Intellectual Property with respect to the Company's Ramada business (as
described in the Prospectus and as currently conducted) is referred to
herein as the "Ramada Marks".
(xxvii) To the best knowledge of the Company without having made any
inquiry or independent investigation, no labor problem exists with the
employees of any party that licenses a franchise, directly or indirectly,
from a Significant Subsidiary (a "Franchisee") or is imminent that could
reasonably be expected to have a Material Adverse Effect.
(xxviii) To the best knowledge of the Company, no dispute exists or is
imminent with any Franchisee or with the Franchisees that could reasonably
be expected to have a Material Adverse Effect.
(xxix) Each Franchisee is such by virtue of being a party to a
franchise contract with either the Company or a Significant Subsidiary and
assuming each such contract has been duly authorized, executed and
delivered by the parties thereto, other than the Company or a Significant
Subsidiary, each such contract constitutes a valid, legal and binding
obligation of each party thereto, enforceable against the Company or a
Significant Subsidiary in accordance with its terms, except (A) for any one
or more of such franchise contracts as would not have a Material Adverse
Effect, and (B) to the extent that enforcement thereof may be limited by
the Bankruptcy Exceptions.
(xxx) The Company and each Significant Subsidiary have complied and
are currently complying in all material respects with the rules and
regulations of the United
16
States Federal Trade Commission and the comparable laws, rules and
regulations of each state or state agency applicable to the franchising
business of the Company and such Significant Subsidiary in each state in
which the Company or such Significant Subsidiary is doing business. The
Company and each Significant Subsidiary have complied and are currently
complying in all material respects with the Federal Real Estate Settlement
Procedures Act and the real estate brokerage laws, rules and regulations of
each state or state agency applicable to the real estate franchising
business of the Company and such Significant Subsidiary in each state in
which the Company or such Significant Subsidiary is doing business.
(xxxi) No authorization, approval, consent, order, registration or
qualification of or with any court or governmental authority or agency is
required for the entry into the Purchase Contracts underlying the Income
PRIDES or the Growth PRIDES or in connection with the issuance and sale of
the Common Securities, the offering of the Securities and the issuance and
sale of the Shares by the Company pursuant to such Purchase Contracts,
except such as have been obtained and made under the federal securities
laws and such as may be required under state or foreign securities or Blue
Sky laws.
(xxxii) Neither of the Trust and the Company is, nor upon the issuance
and sale of the Securities as herein contemplated and the application of
the net proceeds therefrom as described in the Prospectus will be, an
"investment company" or an entity "controlled" by an "investment company"
as such terms are defined in the Investment Company Act of 1940, as amended
(the "1940 Act").
(xxxiii) None of the Company or its Significant Subsidiaries has taken
any action resulting in a violation of Regulation M under the 1934 Act, or
designed to cause or result in, or that has constituted or that reasonably
might be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of
the Securities or the Common Stock, in each case in violation of applicable
law.
(xxxiv) No "forward looking statement" (as defined in Rule 175 under
the 1933 Act) contained in the Registration Statement, any preliminary
prospectus or the Prospectus was made or reaffirmed without a reasonable
basis or was disclosed other than in good faith.
(b) Any certificate signed by any officer of the Company or a Trustee
of the Trust and delivered to the Underwriters or to counsel for the
Underwriters shall be deemed a representation and warranty by the Company or
the Trust, as the case may be, to the Underwriters as to the matters covered
thereby.
17
SECTION 2. Sale and Delivery to Underwriter; Closing. (a) On the basis
of the representations and warranties herein contained and subject to the terms
and conditions herein set forth, the Offerors agree to sell to each
Underwriter, and each Underwriter severally and not jointly agrees to purchase
from the Offerors, at the price per security set forth in the Pricing
Agreement, the number of Initial Securities set forth in Schedule A hereto
opposite the name of such Underwriter, plus any additional number of Initial
Securities that such Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof.
(1) If the Offerors have elected not to rely upon Rule 430A of the
1933 Act Regulations, the initial public offering prices per Security and
the purchase prices per Security to be paid by the several Underwriters for
the Securities have each been determined and set forth in the Pricing
Agreement, dated the date hereof, and any necessary amendments to the
Registration Statement and the Prospectus will be filed before the
Registration Statement becomes effective.
(2) If the Offerors have elected to rely upon Rule 430A of the 1933
Act Regulations, the purchase prices per Security to be paid by the several
Underwriters shall be an amount equal to the respective initial public
offering prices per Security, less an amount per such Security to be
determined by agreement between the Underwriters and the Offerors. The
initial public offering prices per Security shall be a fixed price for
Income PRIDES, Growth PRIDES and Separate Preferred Securities,
respectively, to be determined by agreement between the Underwriters and
the Offerors. The initial public offering prices and the purchase prices,
when so determined, shall be set forth in the Pricing Agreement. In the
event that such prices have not been agreed upon and the Pricing Agreement
has not been executed and delivered by all parties thereto by the close of
business on the fourteenth business day following the date of this
Agreement, this Agreement shall terminate forthwith, without liability of
any party to any other party, unless otherwise agreed to by the Offerors
and the Underwriters.
(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Offerors hereby grant options to the Underwriters, severally and not jointly,
to purchase at their election (x) up to 3,600,000 Option Income PRIDES, (y) up
to 300,000 Option Growth PRIDES and (z) up to 300,000 Option Preferred
Securities, in each case at the respective prices per Security set forth in the
Pricing Agreement. The options hereby granted will expire automatically at the
close of business on the 30th calendar day after (i) the later of the date the
Registration Statement and any Rule 462(b) Registration Statement becomes
effective, if the Offerors have elected not to rely upon Rule 430A under the
1933 Act Regulations, or (ii) the Representation Date, if the Offerors have
elected to rely upon Rule 430A under the 1933 Act Regulations, and may be
exercised in whole or in part from time to time only for the purpose of
covering overallotments that may be made in connection with the offering and
distribution of the Initial Securities upon notice by the Underwriters to the
Offerors setting forth the aggregate number of additional Option Securities to
18
be purchased and the time and date of delivery for the related Option
Securities. Any such time and date of delivery (a "Date of Delivery") shall be
determined by the Underwriters but shall not be later than seven full business
days after the exercise of such options, nor in any event before the Closing
Time, unless otherwise agreed upon by the Underwriters and the Offerors. If the
options are exercised as to all or any portion of the Option Income PRIDES, the
Option Growth PRIDES or the Option Preferred Securities, each of the
Underwriters, acting severally and not jointly, will purchase from the Company
the same percentage of the total number of such Option Securities as such
Underwriter is purchasing of the Income PRIDES, the Growth PRIDES or the
Separate Preferred Securities, as the case may be, as set forth in Schedule A
hereto (subject in each case to such adjustments as the Underwriters in their
discretion shall make to eliminate any fractional Option Securities).
(c) The Income PRIDES Preferred Securities and the Treasury Securities
will be pledged with the Collateral Agent to secure the obligations of holders
of the Income PRIDES and Growth PRIDES, as applicable, to purchase Common Stock
under the Purchase Contracts. Such pledge shall be effected by the transfer to
the Collateral Agent of the Income PRIDES Preferred Securities at the Closing
Time and appropriate Date of Delivery, if any, in accordance with the Pledge
Agreement.
(d) Delivery of certificates for the Initial Securities and the Option
Securities (if any of the options provided for in Section 2(b) hereof shall
have been exercised on or before the first business day prior to the Closing
Time) shall be made at the offices of the Underwriters in New York, against the
delivery to the Collateral Agent of the Income PRIDES Preferred Securities and
the Treasury Securities by such Underwriters or on their behalf, and payment of
the purchase price for such Securities shall be made at the offices of Skadden,
Arps, Slate, Meagher & Flom LLP, 919 Third Ave, New York 10022 or at such other
place as shall be agreed upon by the Underwriters and the Offerors, at 9:00
a.m. (New York time) on the third business day after the date the Registration
Statement becomes effective (or, if the Offerors have elected to rely upon Rule
430A, the third full business day after execution of the Pricing Agreement (or,
if pricing of the Securities occurs after 4:30 p.m., Eastern time, on the
fourth full business day thereafter)), or such other time not later than ten
business days after such date as shall be agreed upon by the Underwriters and
the Offerors (such time and date of payment and delivery being referred to
herein as the "Closing Time"). Payment for the Securities purchased by the
Underwriters shall be made by wire transfer of immediately available funds,
payable to the Company, against delivery to the respective accounts of the
Underwriters of the Securities to be purchased by it. Delivery of, and payment
for, the Securities shall be made through the facilities of the Depository
Trust Company. In addition, if the Underwriters purchase any or all of the
Option Securities, payment of the purchase price and delivery of certificates
for such Option Securities shall be made at the offices of Skadden, Arps,
Slate, Meagher & Flom LLP set forth above, or at such other place as shall be
agreed upon by the Underwriters and the Offerors, on each Date of Delivery as
specified in the relevant notice from the Underwriters to the Offerors.
19
Certificates for the Initial Securities and the Option Securities, if
any, shall be in such denominations and registered in such names as the
Underwriters may request in writing at least two full business days before the
Closing Time or any Date of Delivery, as the case may be. Merrill Lynch,
individually and not as representative of the Underwriters, may (but shall be
obligated to) make payment of the purchase price for the Securities, if any, to
be purchased by any Underwriter whose funds have not been received by the
Closing Time, or the Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder. The
certificates for the Initial Securities and the Option Securities, if any, will
be made available for examination by the Underwriters no later than 10:00 a.m.
(New York City time) on the last business day prior to the Closing Time or the
Date of Delivery, as the case may be.
(e) If settlement for the Option Securities occurs after the Closing
Time, the Offerors will deliver to the Underwriters on the relevant Date of
Delivery, and the obligations of the Underwriters to purchase the Option
Securities shall be conditioned upon the receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered at the Closing Time pursuant to Section 5(j) hereof.
SECTION 3. Covenants of the Offerors. The Offerors agree with the
Underwriters as follows:
(a) Promptly following the execution of this Agreement, the Offerors
will cause the Prospectus to be filed with the Commission pursuant to Rule
424 of the 1933 Act Regulations and the Offerors will promptly advise the
Underwriters when such filing has been made. Prior to the filing, the
Offerors will cooperate with the Underwriters in the preparation of such
Prospectus to assure that the Underwriters have no reasonable objection to
the form or content thereof when filed or mailed.
(b) The Offerors will comply with the requirements of Rule 430A of the
1933 Act Regulations and/or Rule 434 of the 1933 Act Regulations if and as
applicable, and will notify the Underwriters immediately (i) of the
effectiveness of any post-effective amendment to the Registration Statement
or the filing of any supplement or amendment to the Prospectus, (ii) the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment
or supplement to the Prospectus or for additional information, (iv) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the initiation of any proceedings for that
purpose and (v) of the issuance by any state securities commission or other
regulatory authority of any order suspending the qualification or the
exemption from qualification of the Securities or the Shares under state
securities or Blue Sky laws or the initiation or threatening of any
proceeding for such purpose. The Offerors will make all reasonable efforts
to prevent the
20
issuance of any stop order and, if any stop order is issued, to
promptly obtain the lifting thereof.
(c) The Offerors will give the Underwriters notice of its intention to
file or prepare any amendment to the Registration Statement (including any
post-effective amendment and any filing under Rule 462(b) of the 1933 Act
Regulations), any Term Sheet or any amendment, supplement or revision to
either the prospectus included in the Registration Statement at the time it
became effective or to the Prospectus, whether pursuant to the 1933 Act,
the 1934 Act or otherwise; will furnish the Underwriters with copies of any
such Rule 462(b) Registration Statement, Term Sheet, amendment, supplement
or revision a reasonable amount of time prior to such proposed filing or
use, as the case may be; and will not file any such Rule 462(b)
Registration Statement, Term Sheet, amendment, supplement or revision to
which the Underwriters or counsel for the Underwriters shall reasonably
object.
(d) The Company will deliver to Merrill Lynch and counsel for the
Underwriters, without charge, conformed copies of the Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein and documents
incorporated or deemed to be incorporated by reference therein) and
conformed copies of all consents and certificates of experts, and will also
deliver to Merrill Lynch, without charge, a conformed copy of the
Registration Statement as originally filed and of each amendment thereto
(without exhibits) for each of the Underwriters. If applicable, the copies
of the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(e) The Company has delivered to each Underwriter, without charge, as
many copies of each preliminary prospectus as such Underwriter reasonably
requested, and the Company hereby consents to the use of such copies for
purposes permitted by the 1933 Act. The Company will furnish to each
Underwriter, without charge, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such number of
copies of the Prospectus (as amended or supplemented) as such Underwriter
may reasonably request. If applicable, the Prospectus and any amendments or
supplements thereto furnished to the Underwriter will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(f) The Offerors will comply with the 1933 Act and the 1933 Act
Regulations and the 1934 Act and the 1934 Act Regulations so as to permit
the completion of the distribution of the Securities as contemplated in
this Agreement and in the Registration Statement and the Prospectus. If at
any time when the Prospectus is required by the 1933
21
Act or the 1934 Act to be delivered in connection with sales of the
Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters or
for the Offerors, to amend the Registration Statement in order that the
Registration Statement will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or to amend or
supplement the Prospectus in order that the Prospectus will not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel, at
any such time to amend the Registration Statement or amend or supplement
the Prospectus in order to comply with the requirements of the 1933 Act or
the 1933 Act Regulations, the Offerors will promptly prepare and file with
the Commission, subject to Section 3(c), such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and
the Offerors will furnish to the Underwriters, without charge, such number
of copies of such amendment or supplement as the Underwriters may
reasonably request.
(g) The Offerors will use their best efforts, in cooperation with the
Underwriters, to qualify the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions (domestic
or foreign) as the Representative may designate; provided, however, that
the Company shall not be obligated to qualify as a foreign corporation in
any jurisdiction in which it is not so qualified or subject itself to
taxation in respect of doing business in any jurisdiction in which it is
not otherwise so subject. In each jurisdiction in which the Securities have
been so qualified, the Offerors will file such statements and reports as
may be required by the laws of such jurisdiction to continue such
qualification in effect for so long as may be required in connection with
distribution of the Securities and the Shares.
(h) The Company will make generally available to its securityholders
as soon as practicable, but not later than 45 days (or 90 days, in the case
of a period that is also the Company's fiscal year) after the close of the
period covered thereby, an earnings statement of the Company and its
subsidiaries (in form complying with the provisions of Rule 158 of the 1933
Act Regulations) covering a twelve-month period beginning not later than
the first day of the Company's fiscal quarter next following the "effective
date" (as defined in said Rule 158) of the Registration Statement.
(i) The Company will use the net proceeds received by it from the sale
of the Securities in the manner specified in the Prospectus under "Use of
Proceeds."
(j) If, at the time that the Registration Statement became (or in the
case of a post-effective amendment becomes) effective, any information
shall have been omitted
22
therefrom in reliance upon Rule 430A or Rule 434 of the 1933 Act
Regulations, then immediately following the execution of the Pricing
Agreement, the Offerors will prepare, and file or transmit for filing with
the Commission in accordance with such Rule 430A or Rule 434 and Rule
424(b) of the 1933 Act Regulations, copies of an amended Prospectus or Term
Sheet, or, if required by such Rule 430A, a post-effective amendment to the
Registration Statement (including an amended Prospectus), containing all
information so omitted.
(k) If the Offerors elect to rely upon Rule 462(b), the Offerors shall
file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) and pay the applicable fees in accordance with Rule 111 of
the 1933 Act Regulations by the earlier of (i) 10:00 p.m. Eastern time on
the date of the Pricing Agreement and (ii) the time confirmations are sent
or given, as specified by Rule 462(b)(2).
(1) The Offerors, during the period when the Prospectus is required to
be delivered under the 1933 Act, will file all documents required to be
filed with the Commission pursuant to Section 13, 14 or 15 of the 1934 Act
within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(m) The Offerors will use their best efforts to effect the listing of
the Securities and the Shares on the New York Stock Exchange and to cause
the Securities to be registered under the 1934 Act.
(n) During a period of 90 days (or, in the case of debt securities
issued pursuant to any medium-term note program of the Company, 14 days)
from the date of the Pricing Agreement, neither the Trust nor the Company
will, without the prior written consent of Merrill Lynch, (A) directly or
indirectly, offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any
option for the sale of or otherwise transfer or dispose of any Securities,
Purchase Contracts, Preferred Securities or Common Stock or any security of
the Company similar to the Securities, Purchase Contracts, Preferred
Securities or Common Stock or any security convertible into or exchangeable
or exercisable for Securities, Purchase Contracts, Preferred Securities,
Common Stock or any equity securities substantially similar to the
Securities, Purchase Contracts, Preferred Securities or Common Stock;
provided, however, that such restriction shall not affect the ability of
the Offerors to take any such action (i) in connection with any employee
benefit, dividend reinvestment and stock option or stock purchase plans of
the Company or its subsidiaries; (ii) in connection with the offering of
the Securities, including the Preferred Securities issued pursuant to this
Agreement; (iii) in connection with any securities issued pursuant to or
sold in connection with any securities of the Company or its subsidiaries,
outstanding as of the date hereof, that are convertible into or
exchangeable or exercisable for any securities of the Company and its
subsidiaries; (iv) any securities issued pursuant to a merger or
23
acquisition; (v) the Growth PRIDES or Income PRIDES to be created or
recreated upon substitution of Pledged Securities, or shares of Common
Stock issuable upon early settlement of the Income PRIDES or Growth PRIDES;
(vi) upon exercise of stock options or (vii) any securities issued in the
ordinary course of business pursuant to any medium-term note program of PHH
Corporation; or (B) enter into any swap or any other agreement or any
transaction that transfers, or is the equivalent of transferring, in whole
or in part, directly or indirectly, the economic equivalent of ownership of
the Securities, Purchase Contracts, Preferred Securities or Common Stock,
any security convertible into or exchangeable into or exercisable for the
Securities, Purchase Contracts, Preferred Securities or Common Stock, or
equity securities substantially similar to the Securities, Purchase
Contracts, Preferred Securities or Common Stock, whether any such swap or
transaction is to be settled by delivery of Securities, Purchase Contracts,
Preferred Securities or Common Stock, or other securities, in cash or
otherwise.
(o) For a period of two years from the Closing Time, the Company will
furnish to the Representative copies of all annual reports, quarterly
reports and current reports filed with the Commission on Forms 10-K, 10-Q
and 8-K, or such similar forms as may be designated by the Commission, and
such other documents, reports and information as shall be furnished by the
Company to its stockholders or securityholders generally, provided,
however, that the Company shall not be required to provide the
Representative with any such reports or similar forms that have been filed
with the Commission by electronic transmission pursuant to EDGAR.
(p) The Company will reserve and keep available at all times, free of
preemptive or other similar rights and liens and adverse claims, sufficient
shares of Common Stock to satisfy any obligations to issue Shares upon
settlement of the Purchase Contracts and shall take all actions necessary
to keep effective the Registration Statement with respect to the Shares.
(q) Neither the Company nor its Significant Subsidiaries will take,
directly or indirectly, any action resulting in a violation of Regulation M
under the 1934 Act, or designed to cause or result in, or that reasonably
might be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of
the Securities or the Common Stock, in each case, in violation of
applicable law.
SECTION 4. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, the
Pricing Agreement, the Purchase Contracts, the Purchase Contract Agreement and
the Pledge Agreement, including, without limitation, expenses related to the
following, if incurred: (i) the preparation, delivery, printing and filing of
the Registration Statement and Prospectus as originally filed (including
financial statements and exhibits) and of each amendment thereto; (ii) the
printing and delivery
24
to the Underwriters of this Agreement, the Pricing Agreement, any Agreement
among Underwriters and such other documents as may be required in connection
with the offering, purchase, sale and delivery of the Securities; (iii) the
preparation, issuance and delivery of the certificates for the Securities and
the Shares; (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors or agents (including the transfer agents and
registrars), as well as fees and disbursements of the Trustees, the Purchase
Contract Agent, the Collateral Agent and any Depositary, and their respective
counsel; (v) the qualification of the Securities and the Shares under
securities laws in accordance with the provisions of Section 3(g), including
filing fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection therewith and in connection with the preparation of
the Blue Sky Survey and any Legal Investment Survey; (vi) the printing and
delivery to the Underwriters of copies of the Registration Statement as
originally filed and of each amendment thereto, of each preliminary prospectus,
any Term Sheet and of the Prospectus and any amendments or supplements thereto;
(vii) the printing and delivery to the Underwriters of copies of the Blue Sky
Survey and any Legal Investment Survey; (viii) any fees payable in connection
with the rating of the Securities by nationally recognized statistical rating
organizations; (ix) the filing fees incident to, and the fees and disbursements
of counsel to the Underwriters in connection with, the review, if any, by the
National Association of Securities Dealers, Inc. (the "NASD") of the terms of
the sale of the Securities; (x) any fees payable to the Commission; and (xi)
any fees payable or expenses incurred pursuant to any Uniform Commercial Code
related filings; and (xii) the fees and expenses incurred in connection with
the listing of the Securities and the Shares on the New York Stock Exchange.
If this Agreement is terminated by the Underwriters in accordance with
the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall
reimburse the Underwriters for all of their reasonable out-of-pocket expenses,
including the reasonable fees and disbursements of Shearman & Sterling, counsel
for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the Underwriters to purchase and pay for the Securities pursuant to this
Agreement are subject to the accuracy of the representations and warranties of
the Offerors herein contained or in certificates of any officer of the Company
or any subsidiary or the trustees of the Trust delivered pursuant to the
provisions hereof, to the performance by the Offerors of their obligations
hereunder, and to the following further conditions:
(a) The Registration Statement, including any Rule 462(b) Registration
Statement, shall have become effective under the 1933 Act not later than
5:30 p.m., New York City time, on the date hereof, and on the date hereof
and at the Closing Time and any Date of Delivery, no stop order suspending
the effectiveness of the Registration Statement or any part thereof shall
have been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission, and any request on the part of the Commission
for additional information shall have been complied with to the
satisfaction
25
of counsel to the Underwriters. A prospectus containing information
relating to the description of the Securities, the specific method of
distribution and similar matters shall have been filed with the Commission
in accordance with Rule 424(b)(1), (2), (3), (4) or (5), as applicable (or
any required post-effective amendment providing such information shall have
been filed and declared effective in accordance with the requirements of
Rule 430A), or, if the Company has elected to rely upon Rule 434 of the
1933 Act Regulations, a Term Sheet including the Rule 434 Information shall
have been filed with the Commission in accordance with Rule 424(b)(7).
(b) At the Closing Time the Underwriters shall have received:
(1) The favorable opinion, dated as of the Closing Time, of James
E. Buckman, Senior Executive Vice President and General Counsel of the
Company, in form and substance reasonably satisfactory to counsel for
the Underwriters as set forth on Exhibit B attached hereto.
(2) The favorable opinion, dated as of the Closing Time, of
Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the
Offerors, in form and substance satisfactory to counsel for the
Underwriters as set forth on Exhibit B attached hereto.
(3) The favorable opinion, dated as of the Closing Time of
Morris, James, Hitchens & Williams, counsel to Wilmington Trust
Company, as Delaware Trustee, and to Wilmington Trust Company, as
Institutional Trustee under the Declaration, and Guarantee Trustee
under the Preferred Securities Guarantee Agreement, in form and
substance satisfactory to counsel for the Underwriters, to the effect
that:
(i) Wilmington Trust Company is a Delaware banking association
with trust powers, duly organized, validly existing and in
good standing under the laws of Delaware with all
necessary corporate power and authority to execute,
deliver, and to carry out and perform its obligations
under the terms of, the Declaration and the Guarantee.
(ii) Wilmington Trust Company is a Delaware corporation, duly
organized, validly existing and in good standing, with
full corporate power and authority to execute and deliver,
and to carry out and perform its obligations under the
terms of, the Declaration.
26
(iii) The execution, delivery and performance by Wilmington
Trust Company of the Declaration, and the execution,
delivery and performance by Wilmington Trust Company, in
its capacity as the Guarantee Trustee, of the Preferred
Securities Guarantee, have been duly authorized by all
necessary corporate action on the part of Wilmington Trust
Company. The Declaration and the Preferred Securities
Guarantee have been duly executed and delivered by
Wilmington Trust Company in the case of the Declaration
and of Wilmington Trust Company, in its capacity as the
Guarantee Trustee, in the case of the Preferred Securities
Guarantee, and the Declaration constitutes the legal,
valid and binding obligation of Wilmington Trust Company
enforceable against Wilmington Trust Company in accordance
with its terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions.
(iv) The execution, delivery and performance by Wilmington
Trust Company of the Declaration, and the execution,
delivery and performance by Wilmington Trust Company, in
its capacity as the Guarantee Trustee, of the Preferred
Securities Guarantee, do not conflict with, or constitute
a breach of, Wilmington Trust Company's charter or bylaws.
(v) 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 Wilmington Trust Company of the
Declaration, or by Wilmington Trust Company, in its
capacity as the Guarantee Trustee, of the Preferred
Securities Guarantee.
(4) The favorable opinion, dated as of the Closing Time, of the
legal department of The First National Bank of Chicago, as Purchase
Contract Agent, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The First National Bank of Chicago is duly incorporated
and is validly existing as a national banking association
with trust powers under the laws of the United States with
all necessary power and authority to execute, deliver and
perform its obligations under the Purchase Contract
Agreement and the Pledge Agreement.
27
(ii) The execution, delivery and performance by the Purchase
Contract Agent of the Purchase Contract Agreement, the
Pledge Agreement and the Remarketing Agreement, and the
authentication and delivery of the Securities have been
duly authorized by all necessary corporate action on the
part of the Purchase Contract Agent. The Purchase Contract
Agreement, the Pledge Agreement and the Remarketing
Agreement have been duly executed and delivered by the
Purchase Contract Agent, and constitute the legal, valid
and binding obligations of the Purchase Contract Agent,
enforceable against the Purchase Contract Agent in
accordance with its terms, except to the extent that
enforcement thereof may be limited by the Bankruptcy
Exceptions.
(iii) The execution, delivery and performance of the Purchase
Contract Agreement, the Pledge Agreement and the
Remarketing Agreement by the Purchase Contract Agent does
not conflict with or constitute a breach of the charter or
by-laws of the Purchase Contract Agent.
(iv) No consent, approval or authorization of, or registration
with or notice to, any Illinois or federal governmental
authority or agency is required for the execution,
delivery or performance by the Purchase Contract Agent of
the Purchase Contract Agreement and the Pledge Agreement.
(5) The favorable opinion, dated as of the Closing Time, of
Shearman & Sterling, counsel for the Underwriters, in form and
substance satisfactory to the Underwriters, with respect to the
issuance and sale of the Securities, and other related matters as the
Underwriters may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters. In giving such
opinion, such counsel may rely, as to matters of Delaware law, upon
the opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special
counsel to the Offerors.
(c) Between the date of this Agreement and the Closing Time, no
material adverse change shall have occurred in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Trust or the Company and its Significant Subsidiaries, considered as
one enterprise, whether or not in the ordinary course of business.
28
(d) At the Closing Time, the Underwriters shall have received a
certificate of the President or a Vice-President of the Company and of the
Chief Financial Officer or Chief Accounting Officer of the Company and a
certificate of a Regular Trustee of the Trust, on behalf of the Company and
the Trust, respectively, and dated as of the Closing Time, to the effect
that (i) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Trust or the Company and its Significant Subsidiaries
considered as one enterprise, whether or not in the ordinary course of
business, (ii) the representations and warranties in Section 1 hereof are
true and correct as though expressly made at and as of the Closing Time,
(iii) the Company and the Trust have complied with all agreements and
satisfied all conditions on their part to be performed or satisfied at or
prior to the Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been initiated or, to the knowledge of
such officers, threatened by the Commission.
(e) At the time of the execution of this Agreement, the Underwriters
shall have received letters from Deloitte & Touche LLP, KPMG Peat Marwick
LLP and Ernst & Young LLP, dated such date and substantially in the form of
Exhibit D, Exhibit E and Exhibit F attached hereto, respectively.
(f) At the Closing Time, the Underwriters shall have received a letter
or letters from each Accountant that furnished a letter pursuant to
subsection (e) of this Section, dated as of the Closing Time, to the effect
that it reaffirms the statements made in the letter furnished pursuant to
subsection (e) of this Section, except that the specified date referred to
shall be a date not more than five days prior to the Closing Time.
(g) At the Closing Time, and at each Date of Delivery, if any, counsel
for the Underwriters shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon
the issuance and sale of the Securities as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions
herein contained; and all proceedings taken by the Offerors in connection
with the issuance and sale of the Securities as herein contemplated shall
be satisfactory in form and substance to the Underwriters and counsel for
the Underwriters.
(h) At the Closing Time, (i) the Securities shall be rated in one of
the four highest rating categories for preferred stock ("Investment Grade")
by at least one nationally recognized statistical rating agency, and the
Offerors shall have delivered to the Underwriters a letter, dated the
Closing Time, from such nationally recognized statistical rating agency, or
other evidence satisfactory to the Underwriters, confirming that the
Securities have Investment Grade ratings; (ii) there shall not have
occurred any decrease in the rating assigned to the Securities or any
securities of the Company by any "nation-
29
ally recognized statistical rating organization," as defined for purposes
of Rule 436(g)(2) under the 1933 Act Regulations since the date of this
Agreement, and (iii) no such organization shall have publicly announced
that it has under surveillance or review, without indicating an
improvement, its rating of the Securities or any securities of the Company.
(i) At the Closing Time, the Income PRIDES, the Growth PRIDES, the
Preferred Securities and the Shares shall have been approved for listing on
the New York Stock Exchange upon notice of issuance.
(j) In the event that the Underwriters exercise any or all of their
options provided in Section 2(b) hereof to purchase all or any portion of
the Option Securities, the representations and warranties of the Offerors
contained herein and the statements in any certificates furnished by the
Offerors hereunder shall be true and correct as of, and as if made on, each
Date of Delivery, and at the relevant Date of Delivery, the Underwriters
shall have received:
(1) A certificate, dated such Date of Delivery, of the President
or a Vice President of the Company and the Chief Financial Officer or
Chief Accounting Officer of the Company and a certificate of a Regular
Trustee of the Trust confirming that the certificate delivered at the
Closing Time pursuant to Section 5(d) hereof is true and correct as
of, and as if made on, such Date of Delivery.
(2) The favorable opinion of James E. Buckman, Senior Executive
Vice President and General Counsel of the Company, in form and
substance satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities and otherwise to
the same effect as the opinion required by Section 5(b)(1) hereof.
(3) The favorable opinion of Skadden, Arps, Slate, Meagher & Flom
LLP, special counsel and special tax counsel for the Offerors, in form
and substance satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities and otherwise to
the same effect as the opinion required by Section 5(b)(2) hereof.
(4) The favorable opinion of Morris, James, Hitchens & Williams,
counsel to Wilmington Trust Company, as Institutional Trustee and as
Delaware Trustee, in form and substance satisfactory to counsel for
the Underwriters, dated such Date of Delivery, relating to the Option
Securities and otherwise to the same effect as the opinion required by
Section 5(b)(3) hereof.
30
(5) The favorable opinion of the legal department of The First
National Bank of Chicago, as Purchase Contract Agent, in form and
substance satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities and otherwise to
the same effect as the opinion required by Section 5(b)(4) hereof.
(6) The favorable opinion of Shearman & Sterling, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities and otherwise to the same effect as the opinion required by
Section 5(b)(5) hereof.
(7) A letter from each Accountant that furnished a letter
pursuant to Section 5(e) hereof in form and substance satisfactory to
the Underwriters and dated such Date of Delivery, substantially the
same in form and substance as the letter furnished to the Underwriters
pursuant to Section 5(e) hereof, except that the "specified date" in
the letter furnished pursuant to this Section shall be a date not more
than five days prior to such Date of Delivery.
(8) At such Date of Delivery, (i) the Securities shall be rated
("Investment Grade") by at least one nationally recognized statistical
rating agency, and the Offerors shall have delivered to the
Underwriters a letter, dated such Date of Delivery, from such
nationally recognized statistical rating agency, or other evidence
satisfactory to the Underwriters, confirming that the Securities have
Investment Grade ratings; (ii) there shall not have occurred any
decrease in the rating assigned to the Securities or any securities of
the Company by any "nationally recognized statistical rating
organization," as defined for purposes of Rule 436(g)(2) under the
1933 Act Regulations since the date of the notice given by the
Underwriters to the Offerors of the Underwriters' intent to exercise
their options in accordance with Section 2(b) hereof, and (iii) no
such organization shall have publicly announced that it has under
surveillance or review, without indicating an improvement, its rating
of the Securities or any securities of the Company.
If any condition specified in this Section 5 shall not have been fulfilled when
and as required to be fulfilled, this Agreement, or, in the case of any
condition to the purchase of Option Securities on a Date of Delivery that is
after the Closing Time, the obligations of the several Underwriters to purchase
the relevant Option Securities, may be terminated by the Underwriters by notice
to the Company at any time at or prior to the Closing Time, or such Date of
Delivery, as the case may be, and such termination shall be without liability
of any party to any other party except as provided in Section 4 and except that
Sections 1, 6, 7 and 8 shall survive any such termination and remain in full
force and effect.
31
SECTION 6. Indemnification. (a) The Offerors agree to jointly and
severally indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information deemed to be part thereof, if applicable, or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading
or arising out of any untrue statement or alleged untrue statement of a
material fact included in any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, provided, that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Offerors; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Merrill Lynch, other than
as provided in Section 6(d) hereof), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Offerors by
any Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information deemed to be a part thereof, if applicable, or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) or (B) made in any preliminary prospectus supplement and corrected in
the Prospectus, as supplemented, where the person asserting any such loss,
liability, claim, damage or expense purchased the Securities that are the
subject
32
thereof, and it shall have been established (i) that there was not sent
or given, at or prior to the written confirmation of such sale, a copy of the
Prospectus (excluding documents incorporated by reference) in any case where
such delivery is required by the 1933 Act and (ii) the Company shall have
previously furnished copies thereof in sufficient quantities to such
Underwriter.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, the Trust and each of its Trustees who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information deemed to be a part thereof, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto) in reliance upon and in conformity with written
information furnished to the Offerors by such Underwriter through Merrill Lynch
expressly for use in the Registration Statement (or any amendment thereto) or
such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability that it may have otherwise
than on account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 6(a) above, counsel to the indemnified parties shall be
selected by Merrill Lynch, and, in the case of parties indemnified pursuant to
Section 6(b) above, counsel to the indemnified parties shall be selected by the
Company. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent
of the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified
party from all liability arising out of such litigation investigation,
33
proceeding or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement
at least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by Section 6(a)(ii)
affected without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent it considers
such request to be reasonable and (ii) provides written notice to the
indemnified party substantiating the unpaid balance as unreasonable, in each
case prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Offerors on the one hand, and the Underwriters, on the other hand, from the
offering of the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Offerors on the one hand,
and the Underwriters, on the other hand, in connection with the statements or
omissions that resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by Offerors on the one hand, and the
Underwriters, on the other hand, in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of such
Securities (before deducting expenses) received by the Offerors and the total
underwriting discount or commission received by the Underwriters, in each case
as set forth on the cover of the Prospectus, or, if Rule 434 is used, the
corresponding location on the Term Sheet bear to the aggregate initial public
offering price of such Securities as set forth on such cover.
The relative fault of the Offerors, on the one hand, and the
Underwriters, on the other hand, shall be determined by reference to, among
other things, whether the untrue or
34
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Offerors or by
the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Offerors and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter,
and each director of the Company, each officer of the Company and each Trustee
of the Trust who signed the Registration Statement, and each person, if any,
who controls the Company and the Trust within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Offerors. The Underwriters' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the number
or aggregate principal amount, as the case may be, of Initial Securities set
forth opposite their respective names in Schedule A to this Agreement, and not
joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement and the Pricing Agreement, or contained in certificates of officers
of the Company or its subsidiaries or trustees of the Trust submitted pursuant
hereto, shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or controlling person, or
35
by or on behalf of the Company, and shall survive delivery of and payment for
the Securities to the Underwriters.
SECTION 9. Termination of Agreement. (a) The Underwriters may
terminate this Agreement, by notice to the Company at any time at or prior to
the Closing Time, if (i) there has been, since the date of this Agreement or
since the respective dates as of which information is given in the Prospectus,
any material adverse change or any development that could reasonably be
expected to result in a prospective material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its Significant Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
there has occurred any material adverse change in the financial markets in the
United States or any outbreak of hostilities or escalation of hostilities or
other calamity or crisis, or any change or development involving a prospective
change in national or international political, financial or economic conditions
the effect of which is such as to make it, in the judgment of Merrill Lynch
impracticable to market the Income PRIDES, the Growth PRIDES or the Separate
Preferred Securities or to enforce contracts for the sale of the Income PRIDES,
the Growth PRIDES or the Separate Preferred Securities, or (iii) if trading in
the Common Stock or any other security of the Company has been suspended or
limited by the Commission, NASD or the New York Stock Exchange, or if trading
generally on either the American Stock Exchange, the New York Stock Exchange or
in the over-the-counter market has been suspended or limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by either of said exchanges or by such system or
by order of the Commission, NASD or any other governmental authority, or (iv)
if a banking moratorium has been declared by either Federal, New York, New
Jersey, or Delaware authorities.
(b) If this Agreement and the Pricing Agreement are terminated
pursuant to this Section 9, such termination shall be without liability of any
party to any other party except as provided in Section 4, and provided,
further, that Sections 1, 6, 7 and 8 shall survive such termination and remain
in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at the Closing Time or a Date of Delivery, as
the case may be, to purchase the Securities that it or they are obligated to
purchase under this Agreement and the Pricing Agreement (the "Defaulted
Securities"), Merrill Lynch shall have the right, within 24 hours thereafter,
to make arrangements for one or more of the non-defaulting Underwriters, or any
other underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, Merrill Lynch shall not have completed such arrangements
within such 24-hour period, then:
(a) if the number or aggregate principal amount, as the case may be,
of Defaulted Securities does not exceed 10% of the total number or
aggregate principal amount, as the case may be, of the Income PRIDES,
Growth PRIDES or Separate
36
Preferred Securities to be purchased on such date, the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the
full amount thereof in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) if the number or aggregate principal amount, as the case may be,
of Defaulted Securities exceeds 10% of the total number or aggregate
principal amount, as the case may be, of the Income PRIDES, Growth PRIDES
or Separate Preferred Securities to be purchased on such date, this
Agreement shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, or, in the case of a Date of Delivery that is
after the Closing Time, that does not result in a termination of the obligation
of the Underwriters to purchase and the Company to sell the relevant Option
Securities, as the case may be, either the Representative or the Company shall
have the right to postpone the Closing Time or the relevant Date of Delivery,
as the case may be, for a period not exceeding seven days in order to effect
any required changes in the Registration Statement or the Prospectus or in any
other documents or arrangements. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Underwriters c/o Merrill Lynch at Merrill
Lynch World Headquarters, World Financial Center, North Tower, New York, New
York 10281, Attention of David Johnson, Managing Director, with a copy to
Shearman & Sterling, Attention of Robert Evans III, Esq.; notices to the
Company shall be directed to it at Cendant Corporation, 6 Sylvan Way, P.O. Box
656, Parsippany, New Jersey 07054-0656, Attention of Eric J. Bock, Esq., Vice
President Legal.
SECTION 12. Parties. This Agreement and the Pricing Agreement shall
each inure to the benefit of and be binding upon the Offerors and the
Underwriters and their respective successors. Nothing expressed or mentioned in
this Agreement or the Pricing Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Underwriters and the
Offerors and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or
in respect of this Agreement or the Pricing Agreement or any provision herein
or therein contained. This Agreement and the Pricing Agreement and all
conditions and provisions hereof and thereof are intended to be for the sole
37
and exclusive benefit of the parties hereto and thereto and their respective
successors and legal representatives, and said controlling persons and officers
and directors and their heirs and legal representatives, and for the benefit of
no other person, firm or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT AND THE PRICING
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME UNLESS
OTHERWISE INDICATED.
SECTION 14. Effect of Headings. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
SECTION 15. Counterparts. This Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the executed
counterparts hereof shall constitute a single instrument.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, shall become a binding
agreement among the Company, the Trust and the Underwriters in accordance with
its terms.
Very truly yours,
CENDANT CORPORATION
By: /s/ James E. Buckman
------------------------------
Name: James E. Buckman
Title: Senior Executive Vice
President and General
Counsel
CENDANT CAPITAL I
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
Merrill Lynch & Co.
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
Chase Securities Inc.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
-------------------------------
Authorized Signatory
SCHEDULE A
Number of Number of Number of
Name of Underwriter Income PRIDES Growth PRIDES Preferred Securities
- ------------------- ------------- ------------- --------------------
Merrill Lynch, Pierce,
Fenner & Smith
Incorporated............ 21,600,000 1,800,000 1,800,000
Chase Securities Inc...... 2,400,000 200,000 200,000
---------- --------- ---------
TOTAL................. 24,000,000 2,000,000 2,000,000
========== ========= =========
SCHEDULE B
Significant Subsidiaries of the Company
---------------------------------------
Cendant Operations, Inc.
HFS Car Rental Holdings, Inc.
Cendant Car Rental, Inc.
Wizard Co. Inc.
PHH Corporation
Cendant Mobility Services Corp.
Cendant Mortgage Corporation
PHH Vehicle Management Corporation
RCI General Holdco 1, Inc.
RCI General Holdco 2, Inc.
Resort Condominiums International, LLC
RCI Holdings One, Inc.
TM Acquisition Corp.
Ideon Group, Inc.
FISI*Madison Financial Corporation
Benefit Consultants, Inc.
Entertainment Publications, Inc.
Cendant Membership Services, Inc. (incl. Comp-U-Card division)
Hebdo Mag Inc.
Cendant Software Corporation
Benefit Consultants Membership Inc.
Sierra-On-Line, Inc.
Davidson & Associates, Inc.
Advance Ross Corporation
Getko Group, Inc.
EXHIBIT A
CENDANT CORPORATION
(A DELAWARE CORPORATION)
CENDANT CAPITAL I
(A DELAWARE BUSINESS TRUST)
20,000,000 FELINE PRIDES(Service Mark)
(Stated Amount of $50 per FELINE PRIDES),
consisting of
26,000,000 Income PRIDES(Service Mark)
each consisting of
a Purchase Contract of Cendant Corporation Requiring the
Purchase on February 16, 2001 (or earlier) of certain
Shares of Common Stock of Cendant Corporation
and
a 6.45% Trust Originated Preferred Security(Service Mark)
(TOPrS(Service Mark)) of Cendant Capital I
and
2,000,000 Growth PRIDES(Service Mark)
each consisting of
a Purchase Contract of Cendant Corporation Requiring the
Purchase on February 16, 2001 (or earlier) of certain
Shares of Common Stock of Cendant Corporation
and
a 1/20 Undivided Beneficial Interest in a Zero-Coupon U.S. Treasury Security
Having a Principal Amount Equal to $1000 and maturing on February 15, 2001;
and
2,000,000 6.45% Trust Originated Preferred Securities (TOPrS)
of Cendant Capital I (Liquidation Amount $50 per Trust Originated
Preferred Security (TOPrS)
- --------------
(Service Mark) "FELINE PRIDES," "INCOME PRIDES," "GROWTH PRIDES," "TRUST
ORIGINATED PREFERRED SECURITIES" AND "TOPRS" ARE SERVICE MARKS OF MERRILL LYNCH
& CO. INC.
PRICING AGREEMENT
-----------------
February 24, 1998
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED, as representative of the
several Underwriters named in the within-
mentioned Underwriting Agreement
Merrill Lynch World Headquarters
World Financial Center
North Tower
New York, New York 10281
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated February 24,
1998 (the "Underwriting Agreement"), relating to the purchase by the Several
Underwriters named in Schedule A thereto of the above Income PRIDES (the
"Income PRIDES"), Growth PRIDES (the "Growth PRIDES") and Trust Originated
Preferred Securities (the "Separate Preferred Securities" and, together with
the Income PRIDES and Growth PRIDES, the "Securities") of Cendant Corporation
(the "Company"), and Cendant Capital I (the "Trust"). The Securities are being
issued and sold by the Company and the Trust to the Underwriters on the terms
and conditions set forth in the Underwriting Agreement and on Schedule I
hereto.
Pursuant to Section 2 of the Underwriting Agreement, the Company and
the Trust agree with each Underwriter as follows:
1. The initial public offering price per security for the Securities,
determined as provided in said Section 2, shall be (a) in the case of each
Income PRIDES, $50.00, (b) in the case of each Growth PRIDES, $42.52 and
(c) in the case of each Separate Preferred Security, $50.00.
2. The respective purchase prices per security for the Securities to
be paid by the several Underwriters shall be equal to the initial public
offering prices set forth in paragraph 1. above. The Company shall pay a
commission to the Underwriters equal, in the case of the Initial
Securities, $39.5 million dollars and, with respect to the Option
Securities, $1.50 per security in the case of Option Income PRIDES, $1.22
per security in the case of Option Growth PRIDES and less $0.50 per
security in the case of Option Preferred Securities.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Company and the Trust in accordance
with its terms.
Very truly yours,
CENDANT CORPORATION
By: /s/ James E. Buckman
-------------------------------
Name: James E. Buckman
Title: Senior Executive Vice
President and General
Counsel
CENDANT CAPITAL I
By: /s/ James E. Buckman
-------------------------------
Name: James E. Buckman
Title: Regular Trustee
By: /s/ Michael P. Monaco
-------------------------------
Name: Michael P. Monaco
Title: Regular Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
Merrill Lynch & Co.
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
Chase Securities Inc.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ David Johnson
-------------------------------
Authorized Signatory
Schedule I
TERMS OF THE SECURITIES
SECURITIES OFFERED
20,000,000 FELINE PRIDES, consisting of ,000,000 Income PRIDES and at least
2,000,000 Growth PRIDES, and at least 2,000,000 separate Trust Preferred
Securities. ,000,000 Trust Preferred Securities will be initially issued and
held as a component of the Income PRIDES.
ISSUERS
Cendant Corporation and Cendant Capital I.
STATED AMOUNT
$50 per FELINE PRIDES.
LISTING OF THE INCOME PRIDES, GROWTH PRIDES AND TRUST PREFERRED SECURITIES
Application will be made to list the Income PRIDES, the Growth PRIDES and the
Trust Preferred Securities on the NYSE, subject to official notice of issuance.
NYSE SYMBOL OF COMMON STOCK
"CD"
USE OF PROCEEDS
Substantially all of the proceeds from the sale of the Growth PRIDES will be
used to purchase the underlying Treasury Securities to be transferred to
holders of the Growth PRIDES pursuant to the terms thereof, and the Company
will receive no proceeds from the sale of the Growth PRIDES. All or
substantially all of the proceeds from the sale of the Income PRIDES, the Trust
Preferred Securities which are not components of Income PRIDES and the Common
Securities will be invested by the Trust in Debentures of the Company. The
Company currently anticipates using all of the net proceeds from the sale of
the Debentures, estimated to be approximately $ million, to repay outstanding
indebtedness under the Company's revolving credit facilities, including (i) $
million of outstanding indebtedness under the $1.25 billion 364-Day Competitive
Advance and Revolving Credit Agreement dated as of October 2, 1996, as amended
and restated, among the Company (as successor by Merger with HFS), the lenders
named therein (the "Lenders") and The Chase Manhattan Bank ("Chase"), as
Administrative Agent (the "364-Day Revolving Credit Facility") and (ii) $
million of outstanding indebtedness under the $750 million Five-Year
Competitive Advance and Revolving Credit Agreement dated as of October 2, 1996,
as amended
and restated, among the Company, the Lenders and Chase (the "Five Year
Revolving Credit Facility" and, together with the 364-Day Revolving Credit
Facility, the "Revolving Credit Facilities").
The 364-Day Revolving Credit Facility will mature on September 30, 1998,
provided that the Company is entitled to annually request a 364-day extension
of such maturity date, and the Five Year Revolving Credit Facility will mature
on October 1, 2001.
The 364-Day Revolving Credit Facility and the Five Year Revolving Credit
Facility provide for revolving loans which bear interest, at the option of the
Company, at rates based on competitive bids of Lenders participating in such
facilities, at a prime rate or at LIBOR plus a margin approximating 22.5 basis
points. The proceeds of such loans have been used for general corporate
purposes, primarily for business acquisitions.
FELINE PRIDES
Components of FELINE PRIDES
The 20,000,000 FELINE PRIDES offered hereby will initially consist of (A)
,000,000 units referred to as Income PRIDES and (B) at least 2,000,000 units
referred to as Growth PRIDES. Each Income PRIDES will initially consist of a
unit comprised of (a) a Purchase Contract under which (i) the holder will
purchase from the Company on the Purchase Contract Settlement Date, for an
amount of cash equal to the Stated Amount, a number of newly issued shares of
Common Stock of the Company equal to the Settlement Rate, and (ii) the Company
will pay Contract Adjustment Payments at the rate of % of the Stated Amount
per annum to the holder, and (b) either beneficial ownership of a % Trust
Originated Preferred Security, having a stated liquidation amount equal to the
Stated Amount, representing a preferred, undivided beneficial interest in the
assets of the Trust or upon the occurrence of a Tax Event Redemption prior to
the Purchase Contract Settlement Date, the appropriate the Applicable Ownership
Interest in the Treasury Portfolio. The purchase price of each Income PRIDES
will be allocated between the related Purchase Contract and the related Trust
Preferred Security in proportion to their respective fair market values at the
time of purchase. Each Growth PRIDES will initially consist of a unit comprised
of (a) a Purchase Contract under which (i) the holder will purchase from the
Company on the Purchase Contract Settlement Date, for an amount in cash equal
to the Stated Amount, a number of newly issued shares of Common Stock of the
Company, equal to the Settlement Rate, and (ii) the Company will pay Contract
Adjustment Payments at the rate of % of the Stated Amount per annum and (b)
a 1/20 undivided beneficial interest in a % Treasury Security having a
principal amount of $1,000 and maturing on , 2001. The purchase price
of each Growth PRIDES will be allocated between the related Purchase Contract
and the related interest in the Treasury Security in proportion to their
respective fair market values at the time of purchase.
The applicable distribution rate on the Trust Preferred Securities and the
interest rate on the related Debentures that remain outstanding on and after
the Purchase Contract Settlement Date will be reset on the third Business Day
immediately preceding the Purchase Contract Settlement
Date to the Reset Rate, to be determined by a nationally recognized investment
banking firm chosen by the Company (the "Reset Agent").
The Company will have the right at any time to dissolve the Trust and, after
satisfaction of liabilities to creditors of the Trust, if any, to cause the
Debentures to be distributed to the holders of the Trust Preferred Securities.
References herein to Trust Preferred Securities, unless the context otherwise
requires, mean (i) the Trust Preferred Securities or (ii) the Debentures which
have been delivered to the holders of the Trust Preferred Securities upon
dissolution of the Trust. In addition, as described below, upon the occurrence
of a Tax Event (as defined herein) prior to the Purchase Contract Settlement
Date, the Company may at its option cause the Debentures (and, thus, the Trust
Preferred Securities) to be redeemed at the Redemption Price and the Treasury
Portfolio will be substituted for the redeemed Trust Preferred Securities in
the manner described herein to secure the Income PRIDES holders' obligations
under their related Purchase Contracts. The distribution rate and the payment
dates for the Trust Preferred Securities will correspond to the interest rate
and the payment dates for the Debentures, which will be the sole assets of the
Trust. As long as a FELINE PRIDES is in the form of an Income PRIDES or Growth
PRIDES, the related Trust Preferred Securities, Treasury Securities or the
Treasury Portfolio, as applicable, will be pledged pursuant to a pledge
agreement, to be dated as of February , 1998 (the "Pledge Agreement"), between
the Company and The Chase Manhattan Bank, as collateral agent for the Company
(together with any successor thereto in such capacity, the "Collateral Agent"),
to secure the holder's obligation to purchase Common Stock under the related
Purchase Contract.
Purchase Contract Agreement
The FELINE PRIDES will be issued under a Purchase Contract Agreement, to be
dated as of February , 1998 (the "Purchase Contract Agreement"), between the
Company and The First National Bank of Chicago, as agent for the holders of the
FELINE PRIDES (together with any successor thereto in such capacity, the
"Purchase Contract Agent").
Substitution of Pledged Securities
Each holder of an Income PRIDES will have the right, on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, to
substitute for the related Trust Preferred Securities held by the Collateral
Agent zero-coupon U.S. Treasury Securities in an amount per Income PRIDES equal
to the Stated Amount per Trust Preferred Security. Such Treasury Securities
will be substituted for the Trust Preferred Securities and will be pledged with
the Collateral Agent to secure the holder's obligation to purchase Common Stock
under the related Purchase Contracts. Because Treasury Securities are issued in
integral multiples of $1,000, holders of Income PRIDES may make such
substitutions only in integral multiples of 20 Income PRIDES; provided,
however, if a Tax Event Redemption has occurred prior to the Purchase Contract
Settlement Date and the Treasury Portfolio has become a component of the Income
PRIDES, holders of Income PRIDES may make such substitutions only in integral
multiples of 32,000 Income PRIDES (but obtaining the release of the appropriate
Applicable Ownership Interest of the Treasury Portfolio rather than the Trust
Preferred Securities) at any time on or prior to the second
Business Day immediately preceding the Purchase Contract Settlement Date. In
the event that Contract Adjustment Payments are at a higher rate for Growth
PRIDES than for Income PRIDES, holders of Income PRIDES wishing to create
Growth PRIDES will also be required to deliver cash in an amount equal to the
excess of the Contract Adjustment Payments that would have accrued since the
last Payment Date through the date of substitution on the Growth PRIDES being
created by such holders, over the Contract Adjustment Payments that have
accrued over the same time period on the related Income PRIDES.
Each holder of Growth PRIDES will have the right, on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, to
create Income PRIDES by delivering 20 Growth PRIDES to the Purchase Contract
Agent plus 20 Trust Preferred Securities to the Collateral Agent in exchange
for 20 Income PRIDES and the release of the related Treasury Security to such
holder; provided, however, if a Tax Event Redemption has occurred prior to the
Purchase Contract Settlement Date and the Treasury Portfolio has become a
component of the Income PRIDES, holders of Growth PRIDES may make such
substitution (but using the Treasury Portfolio rather than Trust Preferred
Securities) only in integral multiples of 32,000 Growth PRIDES at any time on
or prior to the second Business Day immediately preceding the Purchase Contract
Settlement Date. Such Trust Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, will be
pledged with the Collateral Agent to secure the holder's obligation to purchase
Common Stock under the related Purchase Contracts. In the event that Contract
Adjustment Payments are at a higher rate for Income PRIDES than for Growth
PRIDES, holders of Growth PRIDES wishing to create Income PRIDES will also be
required to deliver cash in an amount equal to the excess of the Contract
Adjustment Payments that would have accrued since the last Payment Date through
the date of substitution on the Income PRIDES being created by such holders,
over the Contract Adjustment Payments that have accrued over the same time
period on the related Growth PRIDES.
Holders who elect to substitute Pledged Securities (as defined in "Description
of the Purchase Contracts -- Pledged Securities and Pledge Agreement"), will be
responsible for any fees or expenses payable in connection therewith.
Recreating Income PRIDES or Growth PRIDES
On or prior to the fifth Business Day immediately preceding the Purchase
Contract Settlement Date, a holder of Growth PRIDES will have the right to
recreate Income PRIDES by delivering 20 Growth PRIDES to the Purchase Contract
Agent plus 20 Trust Preferred Securities to the Collateral Agent in exchange
for 20 Income PRIDES and the release of the related Treasury Security to such
holder; provided, however, if a Tax Event Redemption has occurred prior to the
Purchase Contract Settlement Date and the Treasury Portfolio has become a
component of the Income PRIDES, holders of Growth PRIDES may make such
substitution (but using the Treasury Portfolio rather than Trust Preferred
Securities) only in integral multiples of 32,000 Growth PRIDES at any time on
or prior to the second Business Day immediately preceding the Purchase Contract
Settlement Date. Such Trust Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, will be
pledged with the
Collateral Agent to secure the holder's obligation to purchase Common Stock
under the related Purchase Contracts. In the event that Contract Adjustment
Payments are at a higher rate for Income PRIDES than for Growth PRIDES, holders
of Growth PRIDES wishing to recreate Income PRIDES will also be required to
deliver cash in an amount equal to the excess of the Contract Adjustment
Payments that would have accrued since the last Payment Date through the date
of substitution on the Income PRIDES being recreated by such holders, over the
Contract Adjustment Payments that have accrued over the same time period on the
related Growth PRIDES.
On or prior to the fifth Business Day immediately preceding the Purchase
Contract Settlement Date, a holder of Income PRIDES will have the right to
subsequently recreate Growth PRIDES by delivering 20 Income PRIDES to the
Purchase Contract Agent plus a Treasury Security to the Collateral Agent in
exchange for 20 Growth PRIDES and the release of the 20 related Trust Preferred
Securities to such Income PRIDES, holder; provided, however, if a Tax Event
Redemption has occurred and the Treasury Portfolio has become a component of
the Income PRIDES, holders of Income PRIDES may make such substitutions only in
integral multiples of 32,000 Income PRIDES. In the event that Contract
Adjustment Payments are at a higher rate for Growth PRIDES than for Income
PRIDES, holders of Income PRIDES wishing to recreate Growth PRIDES will also be
required to deliver cash in an amount equal to the excess of the Contract
Adjustment Payments that would have accrued since the last Payment Date through
the date of substitution on the Growth PRIDES being recreated by such holders,
over the Contract Adjustment Payments that have accrued over the same time
period on the related Income PRIDES.
Current Payments
Holders of Income PRIDES will be entitled to receive aggregate cash
distributions at a rate of % of the Stated Amount per annum from and after
16, 1998, payable quarterly in arrears, consisting of cumulative cash
distributions on the related Trust Preferred Securities or the Treasury
Portfolio, as applicable, payable at the rate of % of the Stated Amount per
annum, and Contract Adjustment Payments, payable by the Company at the rate of
% of the Stated Amount per annum, subject (in the case of both the
distributions on the Trust Preferred Securities and of the Contract Adjustment
Payments), to the Company's right to defer the payment of such amounts. The
ability of the Trust to make the quarterly distributions on the related Trust
Preferred Securities will be solely dependent upon the receipt of corresponding
interest payments from the Company on the Debentures. The Company's obligations
with respect to the Debentures will be senior and unsecured and will rank on a
parity in right of payment with all other senior unsecured obligations of the
Company.
If a Tax Event Redemption has occurred prior to the Purchase Contract
Settlement Date as described herein and the Treasury Portfolio has become a
component of the Income PRIDES, quarterly distributions on the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as a portion of the
cumulative quarterly distribution to the holders of Income PRIDES, will not be
deferred.
Holders of Growth PRIDES will be entitled to receive quarterly cash
distributions of Contract Adjustment Payments, payable by the Company at the
rate of % of the Stated Amount per annum, subject to the Company's rights of
deferral described herein. In addition, OID would continue to accrue on the
related Treasury Securities.
Contract Adjustment Payments
Contract Adjustment Payments will be fixed at a rate per annum of % of the
Stated Amount per Purchase Contract in the case of Income PRIDES, and % of the
Stated Amount per Purchase Contract, in the case of Growth PRIDES. The Contract
Adjustment Payments, if any, will be subordinated and junior in right of
payment to the Senior Indebtedness.
Option to Extend Distribution Payment Periods
The Company has the right at any time, and from time to time, limited to a
period not extending beyond the maturity date of the Debentures, to defer the
interest payments due on the Debentures. As a consequence of such deferral, the
corresponding quarterly distributions to holders of Trust Preferred Securities
and Income PRIDES would be deferred (but despite such deferral, would continue
to accumulate quarterly and would accrue interest thereon compounded quarterly
at the rate of % per annum through and including 15, 2001, and at
the Reset Rate thereafter). The Company also has the right to defer the payment
of Contract Adjustment Payments on the related Purchase Contracts until no
later than the Purchase Contract Settlement Date; however, such deferred
Contract Adjustment Payments will bear additional Contract Adjustment Payments
at the rate of % per annum (the higher of (i) the rate which would accrue on
Income PRIDES for such payments and (ii) the rate which would accrue on Growth
PRIDES for such payments) (such deferred Contract Adjustment Payments together
with such additional Contract Adjustment Payments shall be referred to as the
"Deferred Contract Adjustment Payments"). If interest payments on the
Debentures or the Contract Adjustment Payments are deferred, the Company has
agreed, among other things, not to declare or pay any dividend on or repurchase
its capital stock (subject to certain exceptions) during the period of such
deferral. If a Tax Event Redemption has occurred prior to the Purchase Contract
Settlement Date and the Treasury Portfolio has become a component of the Income
PRIDES, quarterly distributions on the appropriate Applicable Ownership
Interest Treasury Portfolio as a portion of the cumulative quarterly
distributions to the holders of Income PRIDES will not be deferred.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the related Purchase Contracts until the Purchase
Contract Settlement Date, each holder of the related Income PRIDES or Growth
PRIDES will receive on the Purchase Contract Settlement Date in respect of such
Deferred Contract Adjustment Payments, in lieu of a cash payment, a number of
shares of Common Stock equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to such holder divided by (y) the Applicable Market
Value (as defined herein).
Payment Dates
Subject to the deferral provisions described herein, the current payments
described above in respect of the Income PRIDES will be payable quarterly in
arrears on February 16, May 16, August 16 and November 16 of each year,
commencing 16, 1998, through and including (i) in the case of the Contract
Adjustment Payments, the earlier of the Purchase Contract Settlement Date or
the most recent such quarterly date on or prior to any early settlement of the
related Purchase Contracts and (ii) in the case of Trust Preferred Securities,
the most recent such quarterly date on or prior to the earlier of the Purchase
Contract Settlement Date and the date the liquidation amount of a Trust
Preferred Security, together with all accumulated and unpaid distributions
thereon (each, a "Payment Date").
Remarketing
Unless a Tax Event Redemption has occurred, pursuant to a remarketing agreement
(the "Remarketing Agreement") dated as of , 1998, among the Company,
the Trust, the Purchase Contract Agent and a nationally recognized investment
banking firm chosen by the Company (the "Remarketing Agent"), and subject to
the terms of a Remarketing Underwriting Agreement to be dated as of the third
Business Day immediately preceding the Purchase Contract Settlement Date among
such parties (the "Remarketing Underwriting Agreement"), the Trust Preferred
Securities of such Income PRIDES holders who have failed to notify the Purchase
Contract Agent, on or prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date, of their intention to settle the related
Purchase Contracts with separate cash, will be remarketed on the third Business
Day immediately preceding the Purchase Contract Settlement Date. The
Remarketing Agent will use its reasonable efforts to remarket such Trust
Preferred Securities (bearing the Reset Rate) on such date for settlement on
the Purchase Contract Settlement Date at a price of approximately 100.5% of the
aggregate stated liquidation amount of such Trust Preferred Security, plus
accrued and unpaid distributions (including any deferred distributions), if
any, thereon. The portion of the proceeds from such remarketing equal to the
aggregate stated liquidation amount of such Trust Preferred Securities will be
automatically applied to satisfy in full such Income PRIDES holders'
obligations to purchase Common Stock under the related Purchase Contracts. In
addition, after deducting as the Remarketing Fee an amount not exceeding 25
basis points (.25%) of the aggregate stated liquidation amount of the
remarketed securities from any amount of such proceeds in excess of the
aggregate stated liquidation amount of the remarketed Trust Preferred
Securities plus any accrued and unpaid distributions (including any deferred
distributions), the Remarketing Agent will remit the remaining portion of the
proceeds, if any, for the benefit of such holder. Income PRIDES holders, whose
Trust Preferred Securities are so remarketed will not otherwise be responsible
for any Remarketing Fee in connection therewith. If, despite using its
reasonable efforts, the Remarketing Agent cannot remarket the related Trust
Preferred Securities of such holders of Income PRIDES at a price not less than
100% of the aggregate stated liquidation amount of such Trust Preferred
Securities plus accrued and unpaid distributions, including deferred
distributions, if any, resulting in a Failed Remarketing, the Company will
exercise its rights as a secured party to dispose of the Trust Preferred
Securities in accordance with applicable law and to satisfy in full, from the
proceeds of such disposition, such holder's obligation to purchase Common Stock
under the related Purchase Contracts, provided, that if the Company exercises
such rights as a secured party with respect to such Trust Preferred
Securities, any accrued and unpaid distributions (including any deferred
distributions) on such Trust Preferred Securities will be paid in cash by the
Company to the holder of record of such Trust Preferred Securities. The Company
will cause a notice of such Failed Remarketing to be published on the second
Business Day immediately preceding the Purchase Contract Settlement Date. It is
currently anticipated that Merrill Lynch, Pierce, Fenner & Smith Incorporated
will be the Remarketing Agent.
Purchase Contract Settlement Date
16, 2001.
Settlement of Purchase Contracts
On the Business Day immediately preceding the Purchase Contract Settlement
Date, unless a holder of Income PRIDES or Growth PRIDES (i) has settled the
related Purchase Contracts through the early delivery of cash to the Purchase
Contract Agent in the manner described herein, (ii) in the case of Income
PRIDES, has settled the related Purchase Contracts with separate cash on the
Business Day prior to the Purchase Contract Settlement Date pursuant to prior
notification to the Purchase Contract Agent, (iii) has had the Trust Preferred
Securities related to such holder's Purchase Contracts remarketed in the manner
described herein in connection with settling such Purchase Contracts, or (iv)
an event described in the Prospectus under the heading "Description of the
Purchase Contracts -- Termination" has occurred, (A) in the case of Income
PRIDES (unless a Tax Event Redemption has occurred), the Company will exercise
its rights as a secured party to dispose of the related Trust Preferred
Securities in accordance with the applicable law, and (B) in the case of Growth
PRIDES or Income PRIDES (if a Tax Event Redemption has occurred) the principal
amount of the related Treasury Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as applicable, when paid at
maturity, will automatically be applied, pursuant to the exercise of such
rights by the Company to satisfy in full such holder's obligation to purchase
Common Stock under the related Purchase Contracts.
In the event that a holder of either Income PRIDES or Growth PRIDES effects the
early settlement of the related Purchase Contracts through the delivery of cash
or, in the case of an Income PRIDES, settles such Purchase Contracts with cash
on the Business Day immediately preceding the Purchase Contract Settlement
Date, the related Trust Preferred Securities, the appropriate Applicable
Ownership Interest of the Treasury Portfolio or the Treasury Securities, as the
case may be, will be released to such holder as described herein.
Settlement Rate
The number of newly issued shares of Common Stock issuable upon settlement of
each Purchase Contract on the Purchase Contract Settlement Date (the
"Settlement Rate") will be calculated as follows (subject to adjustment under
certain circumstances): (a) if the Applicable Market Value is equal to or
greater than $ (the "Threshold Appreciation Price," which is
approximately % above the last reported sale price of the Common Stock set
forth on the cover page of the final Prospectus
Supplement (the "Reference Price")), the Settlement Rate (which will be equal
to the Stated Amount divided by the Threshold Appreciation Price) will be ;
accordingly, if, between the date of the final Prospectus Supplement and the
period during which the Applicable Market Value is measured, the market price
for the Common Stock increases to an amount that is higher than the Threshold
Appreciation Price, the aggregate market value of the shares of Common Stock
issued upon settlement of each Purchase Contract (assuming that such market
value is the same as the Applicable Market Value of such Common Stock) will be
higher than the Stated Amount, and if such market price is the same as the
Threshold Appreciation Price, the aggregate market value of such shares
(assuming that such market value is the same as the Applicable Market Value of
such Common Stock) will be equal to the Stated Amount; (b) if the Applicable
Market Value is less than the Threshold Appreciation Price but greater than the
Reference Price, the Settlement Rate will be equal to the Stated Amount divided
by the Applicable Market Value; accordingly, if the market price for the Common
Stock increases between the date of the final Prospectus Supplement and the
period during which the Applicable Market Value is measured but such market
price is less than the Threshold Appreciation Price, the aggregate market value
of the shares of Common Stock issued upon settlement of each Purchase Contract
(assuming that such market value is the same as the Applicable Market Value of
such Common Stock) will be equal to the Stated Amount; and (c) if the
Applicable Market Value is less than or equal to the Reference Price, the
Settlement Rate (which will be equal to the Stated Amount divided by the
Reference Price) will be ; accordingly, if the market price for the Common
Stock decreases between the date of the final Prospectus Supplement and the
period during which the Applicable Market Value is measured, the aggregate
market value of the shares of Common Stock issued upon settlement of each
Purchase Contract (assuming that such market value is the same as the
Applicable Market Value of such Common Stock) will be less than the Stated
Amount, and if such market price stays the same, the aggregate market value of
such shares (assuming that such market value is the same as the Applicable
Market Value of such Common Stock) will be equal to the Stated Amount.
"Applicable Market Value" means the average of the Closing Price (as defined
herein) per share of Common Stock on each of the twenty consecutive Trading
Days (as defined herein) ending on the third Trading Day immediately preceding
the Purchase Contract Settlement Date.
Early Settlement
A holder of Income PRIDES (unless a Tax Event Redemption has occurred) may
settle the related Purchase Contracts on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date in the manner
described herein, but only in integral multiples of 20 Income PRIDES; provided,
however, if a Tax Event Redemption has occurred prior to the Purchase Contract
Settlement Date and the Treasury Portfolio has become a component of the Income
PRIDES, holders of Income PRIDES may settle early only in integral multiples of
32,000 Income PRIDES at any time on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date. A holder of Growth
PRIDES may settle the related Purchase Contracts on or prior to the second
Business Day immediately preceding the Purchase Contract Settlement Date in the
manner described herein (in either case, an "Early Settlement"). Upon such
Early Settlement, (a) the holder will pay to the Company through the Purchase
Contract Agent in immediately available funds an amount equal to the Stated
Amount for each Purchase Contract to
be settled and deliver the Income PRIDES or Growth PRIDES, as the case may be,
to the Purchase Contract Agent, (b) the related Trust Preferred Securities, the
appropriate Applicable Ownership Interest of the Treasury Portfolio or the
Treasury Securities, as the case may be, within three Business Days of the date
of Early Settlement, will be transferred to the holder free and clear of the
Company's security interest therein, and (c) the Company, within three Business
Days of the date of Early Settlement, will deliver newly issued shares of
Common Stock an amount equal to the Stated Amount divided by the Threshold
Appreciation Price) to the holder for each Purchase Contract so settled. Upon
Early Settlement, (i) the holder's rights to receive Deferred Contract
Adjustment Payments, if any, on the Purchase Contracts being settled will be
forfeited, (ii) the holder's right to receive additional Contract Adjustment
Payments, if any, in respect of such Purchase Contracts will terminate and
(iii) no adjustment will be made to or for the holder on account of Deferred
Contract Adjustment Payments, or any amount accrued in respect of Contract
Adjustment Payments.
Termination
The Purchase Contracts and the rights and obligations of The Company and the
holders of the FELINE PRIDES thereunder(including the right thereunder to
receive accrued or Deferred Contract Adjustment Payments, if any, and the
obligation to purchase Common Stock) will automatically terminate upon the
occurrence of certain events of bankruptcy, insolvency or reorganization with
respect to the Company. Upon such termination, the Collateral Agent will
release the related Trust Preferred Securities, the appropriate Applicable
Ownership Interest of the Treasury Portfolio or Treasury Securities, as the
case may be, held by it to the Purchase Contract Agent for distribution to the
holders, subject in the case of the Treasury Portfolio to the Purchase Contract
Agent's disposition of the subject securities for cash, and the payment of such
cash to the holders, to the extent that the holder would otherwise have been
entitled to receive less than $1,000 of any such security. Upon such
termination, there may be a delay before such release and distribution. In the
event that the Company becomes the subject of a case under the United States
Bankruptcy Code of 1978, as amended (the "Bankruptcy Code"), such delay may
occur as a result of the automatic stay under the Bankruptcy Code and continue
until such automatic stay has been lifted. The Company expects any such delay
to be limited.
Voting and Certain Other Rights
Holders of Trust Preferred Securities will not be entitled to vote to appoint,
remove or replace, or to increase or decrease the number of Regular Trustees
(as defined herein) and will generally have no voting rights except in the
limited circumstances described under "Description of Trust Preferred
Securities --Voting Rights." Holders of Purchase Contracts forming part of the
Income PRIDES or Growth PRIDES in their capacities as such holders will have no
voting or other rights in respect of the Common Stock.
TRUST PREFERRED SECURITIES
The Trust
The Trust is a Delaware statutory business trust. The sole assets of the Trust
will consist of the Debentures. The Company will directly or indirectly own all
of the Common Securities representing common undivided beneficial ownership
interests in the assets of the Trust.
Trust Preferred Securities
% Trust Preferred Securities (liquidation amount $50 per Trust Preferred
Security), representing preferred, undivided beneficial ownership interests in
the assets of the Trust.
Distributions
Distributions on the Trust Preferred Securities, which will constitute all or a
portion of the distributions on the Income PRIDES, will be cumulative, will
accrue from the first date of issuance of the Trust Preferred Securities and
will be payable initially at the annual rate of % of the liquidation amount of
$50 per Trust Preferred Security to but excluding the Purchase Contract
Settlement Date, and in the case of Trust Preferred Securities that remain
outstanding on and after the Purchase Contract Settlement Date, from the
Purchase Contract Settlement Date to but excluding 16, 2003, at the
Reset Rate, in each case, when, as and if funds are available for payment.
Subject to the distribution deferral provisions, distributions will be payable
quarterly in arrears on each February 16, May 16, August 16 and November 16,
commencing 16, 1998.
Market Rate Reset
The applicable quarterly distribution rate on the Trust Preferred Securities
and the interest rate on the Debentures on and after the Purchase Contract
Settlement Date, will be reset on the third Business Day immediately preceding
the Purchase Contract Settlement Date to the Reset Rate, determined by the
Reset Agent as the rate the Trust Preferred Securities should bear in
order for a Trust Preferred Security to have an approximate market value of
100.5% of the Stated Amount on the third Business Day immediately preceding the
Purchase Contract Settlement Date, provided, that the Company may limit such
Reset Rate to be no higher than the rate on the Two-Year Benchmark Treasury
plus 200 basis points (2%). Such market value may be less than 100.5% if the
Reset Spread is limited to a maximum of 2%. It is currently anticipated that
Merrill Lynch, Pierce, Fenner & Smith Incorporated will be the Reset Agent.
Optional Remarketing
Pursuant to the Remarketing Agreement and subject to the terms of Remarketing
Underwriting Agreement, on or prior to the Business Day immediately preceding
the Purchase Contract Settlement Date, but no earlier than the Business Day
immediately preceding the Purchase Contract Settlement Date, holders of
separate Trust Preferred Securities which are not components of Income PRIDES
may elect to have their Trust Preferred Securities remarketed, by delivering
their Trust Preferred Securities along with a notice of such election to the
Collateral Agent. Holders of Trust Preferred Securities electing to have their
Trust Preferred Securities remarketed will also have the right to withdraw such
election on or prior to the Business Day immediately
preceding the Purchase Contract Settlement Date. On the fourth Business Day
immediately preceding the Purchase Contract Settlement Date, the Collateral
Agent will deliver such Trust Preferred Securities to the Remarketing Agent for
remarketing. The Remarketing Agent will use its reasonable efforts to remarket
such Trust Preferred Securities (bearing the Reset Rate) on the third Business
Day immediately preceding the Purchase Contract Settlement Date at a price of
approximately 100.5% of the aggregate stated liquidation amount of such Trust
Preferred Securities, plus accrued and unpaid distributions (including deferred
distributions), if any, thereon. The portion of the proceeds from such
remarketing equal to the aggregate stated liquidation amount of such Trust
Preferred Securities will be remitted by the Remarketing Agent to the
Collateral Agent for the benefit of such Trust Preferred Securities holders. In
addition, after deducting as the Remarketing Fee an amount not exceeding 25
basis points (.25%) of the aggregate stated liquidation amount of the
remarketed securities from any amount of such proceeds in excess of the
aggregate stated liquidation amount of the remarketed Trust Preferred
Securities plus any accrued and unpaid distributions (including any deferred
distributions), the Remarketing Agent will remit to the Collateral Agent the
remaining portion of the proceeds, if any, for the benefit of such holder of
Trust Preferred Securities. If, despite using its reasonable efforts, the
Remarketing Agent cannot remarket the Trust Preferred Securities of such
holders of Trust Preferred Securities at a price not less than 100% of the
aggregate stated liquidation amount of such Trust Preferred Securities plus
accrued and unpaid distributions, including deferred distributions, if any,
resulting in a Failed Remarketing, the Remarketing Agent will return such Trust
Preferred Securities to the Collateral Agent to return such Trust Preferred
Securities to such holders. The Company will cause a notice of such Failed
Remarketing to be published on the second Business Day immediately preceding
the Purchase Contract Settlement Date. It is currently anticipated that Merrill
Lynch, Pierce, Fenner & Smith Incorporated will be the Remarketing Agent.
The ability of the Trust to pay distributions on the Trust Preferred Securities
will be solely dependent on the receipt of interest payments from the Company
on the Debentures. The Company will have the right at any time, and from time
to time, to defer the interest payments due on the Debentures for successive
extension periods (the "Extension Periods") limited, in the aggregate, to a
period not extending beyond the maturity date of the Debentures. The
corresponding quarterly distributions on the Trust Preferred Securities would
be deferred by the Trust (but would continue to accumulate quarterly and would
accrue interest, compounded quarterly, at the rate of % per annum through and
including 15, 2001, and at the Reset Rate thereafter) until the end
of any such Extension Period. If a deferral of an interest payment occurs, the
holders of the Trust Preferred Securities will be required to accrue interest
income for United States federal income tax purposes in advance of the receipt
of any corresponding cash distribution with respect to such deferred interest
payment.
Rights Upon Deferral of Distribution
During any period in which interest payments on the Debentures are deferred,
interest will accrue on the Debentures (compounded quarterly) and the
corresponding quarterly distributions on the
Trust Preferred Securities will continue to accumulate with interest thereon at
the rate of % per annum through and including 15, 2001, and at the
Reset Rate thereafter, compounded quarterly.
Liquidation Preference
In the event of any liquidation of the Trust, and after satisfaction of
liabilities to creditors of the Trust, if any, holders will be entitled to
receive Debentures in an aggregate principal amount equal to the aggregate
stated liquidation amount of the Trust Preferred Securities.
Put Option
If a Failed Remarketing has occurred, holders of Trust Securities (including,
following the distribution of the Debentures upon a dissolution of the Trust as
described herein, such Debenture holders), holding such Trust Securities or
Debentures, as the case may be, following the Purchase Contract Settlement Date
will have the right, in the case of Trust Securities, to require the Trust to
put to the Company the related Debentures, or in the case of Debentures, to put
such Debentures directly to the Company on , 2001, upon at least
three Business Days' prior notice, at a price equal to the principal amount,
plus accrued and unpaid interest (including deferred interest), if any,
thereon. Upon the repurchase of such Debentures the proceeds of such repurchase
shall simultaneously be applied (in the case of Trust Securities) to redeem
such Trust Securities of such holder in an aggregate stated liquidation amount
equal to the aggregate principal amount of the Debentures so repurchased and
(ii) any accrued and unpaid distributions (including deferred distributions)
with respect to such Trust Securities will be paid to such holder in cash.
Distribution of Debentures
In certain circumstances involving an Investment Company Event, the Trust would
be dissolved, with the result that, after satisfaction of liabilities to
creditors of the Trust, if any, Debentures with an aggregate principal amount
equal to the aggregate stated liquidation amount of the Trust Preferred
Securities would be distributed to the holders of the Trust Preferred
Securities on a pro rata basis including the Collateral Agent. In such event an
Income PRIDES would thereafter consist of beneficial ownership of a Debenture
with a principal amount equal to the Stated Amount of such Income PRIDES and
the related Purchase Contract, and such Debenture would be otherwise treated as
if it were a Trust Preferred Security.
Tax Event Redemption
The Debentures (and, thus, the Trust Securities) are redeemable, at the option
of the Company, on not less than 30 days or more than 60 days prior written
notice in whole but not in part upon the occurrence and continuation of a Tax
Event under the circumstances described herein at a Redemption Price equal to,
for each Debenture, the Redemption Amount together with accrued and unpaid
distributions (including deferred distributions). If the Company so redeems all
of the Debentures, the Trust must redeem all of the Trust Securities and pay in
cash such Redemption Price to the holders of such Trust Securities. If such Tax
Event Redemption occurs prior to the
Purchase Contract Settlement Date, the Redemption Price payable in liquidation
of any Income PRIDES holders' interest in the Trust, will be distributed to the
Collateral Agent, who in turn will apply an amount equal to the Redemption
Amount of such Redemption Price to purchase the Treasury Portfolio on behalf of
the holders of Income PRIDES and remit the remaining portion, if any, of such
Redemption Price to the Purchase Contract Agent for payment to holders of such
Income PRIDES. The Treasury Portfolio will be substituted for the Trust
Preferred Security and will be pledged with the Collateral Agent to secure such
Income PRIDES holders' obligations to purchase the Common Stock under their
Purchase Contracts.
Other than in the event of a Tax Event Redemption, the Company will not have
the ability to redeem the Debentures prior to their stated maturity date.
The Company will irrevocably and unconditionally guarantee (the "Guarantee"),
generally on a senior unsecured basis, the payment in full of (i) distributions
on the Trust Preferred Securities to the extent the Trust has funds available
therefor, (ii) the redemption price of Trust Preferred Securities in respect of
which the related Debentures have been repurchased by the Company on the
Purchase Contract Settlement Date, to the extent the Trust has funds available
therefor, and (iii) generally, the liquidation amount of the Trust Preferred
Securities or the Redemption Price upon a Tax Event Redemption, to the extent
the Trust has assets available for distribution to holders of Trust Preferred
Securities in the event of a dissolution of the Trust. The Company's
obligations under the Guarantee will be a senior unsecured obligation of the
Company and will rank on a parity with all of the Company's other senior
unsecured obligations.
Debentures
Unless a Tax Event Redemption has occurred, the Debentures will mature on
16, 2003, and will bear interest initially at the rate of % per
annum, payable quarterly in arrears on each February 16, May 16, August 16 and
November 16, commencing 16, 1998. The interest rate on the
Debentures, and the distribution rate on the Trust Preferred Securities, that
remain outstanding after the Purchase Contract Settlement Date will be reset on
the third Business Day immediately preceding the Purchase Contract Settlement
Date to the Reset Rate determined by the Reset Agent. Interest payments on the
Debentures may be deferred from time to time by the Company for successive
Extension Periods not extending, in the aggregate, beyond the stated maturity
date of the Debentures. During any Extension Period, interest at the rate of
% per annum through and including 15, 2001, and at the Reset Rate
thereafter would continue to accrue and compound quarterly. Upon the
termination of any Extension Period and the payment of all amounts then due,
the Company may commence a new Extension Period, provided such new Extension
Period does not extend beyond the stated maturity date of the Debentures. No
interest shall be due during an Extension Period until the end of such period.
During an Extension Period, the Company will be prohibited (subject to certain
exceptions) from paying dividends on or purchasing any of its capital stock and
making certain other restricted payments until quarterly interest payments are
resumed and all amounts then due on the Debentures are paid. The Debentures
will be senior unsecured obligations of the Company and will rank on a parity
with all of the Company's other senior unsecured obligations.
Provided the Company does not exercise its right to defer interest on the
Debentures, a beneficial owner of Income PRIDES and Trust Preferred Securities
will include in gross income its pro rata share of the stated interest on the
Debentures when such interest income is paid or accrued in accordance with its
regular method of tax accounting. The Company intends to report the Contract
Adjustment Payments as income to holders of Income PRIDES and Growth PRIDES,
but holders should consult their tax advisors concerning the possibility that
the Contract Adjustment Payments may be treated as loans, purchase price
adjustments, rebates or option premiums rather than being includible in income
on a current basis. A beneficial owner of Growth PRIDES will be required to
include in gross income its allocable share of any OID with respect to the
Treasury Securities as it accrues on a constant yield to maturity basis. If a
Tax Event Redemption has occurred, a beneficial owner of Income PRIDES will be
required to include in gross income its allocable share of OID on the Treasury
Portfolio as it accrues on a constant yield to maturity basis.
Exhibit B
FORM OF OPINION OF JAMES E. BUCKMAN, SENIOR EXECUTIVE VICE
PRESIDENT AND GENERAL COUNSEL OF THE COMPANY
Based upon and subject to the limitations, qualifications, exceptions
and assumptions set forth above, I am of the opinion that:
(i) The Company has been incorporated and is validly existing as a
corporation under the laws of the State of Delaware.
(ii) The Company has corporate power and authority (i) to own, lease
and operate its properties and to conduct its business as described in the
Prospectus and (ii) to enter into this Agreement, the Pricing Agreement,
the Remarketing Agreement, the Purchase Contract Agreement, the Pledge
Agreement, each Guarantee Agreement, the Indenture, the First Supplemental
Indenture, the Debentures and the Declaration and to perform its
obligations under, or as contemplated under, each thereof.
(iii) The Company is qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, except where the failure to so qualify or be in
good standing would not result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus (except for subsequent issuances,
if any, pursuant to incentive compensation plan, employee benefit plan or
dividend reinvestment and stock purchase plan transactions), and the shares
of issued and outstanding capital stock of the Company have been authorized
and validly issued and are fully paid and non-assessable; no holder thereof
is or will be subject to personal liability by reason of being such a
holder.
(v) Each Significant Subsidiary (as such term is defined in clauses
(1) and (2) of Rule 1-02(w) of Regulation S-X promulgated under the 1933
Act) is forth on Schedule B to the Underwriting Agreement. Each Significant
Subsidiary is duly organized and is validly existing and in good standing
under the laws of the jurisdiction of its incorporation with corporate
power and corporate authority under such laws to own, lease and operate its
properties and conduct its business. Each Significant Subsidiary is duly
qualified to transact business as a foreign corporation and is in good
standing in each other jurisdiction in which it owns or leases property of
a nature, or transacts business of a type, that would make such
qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a Material Adverse Effect.
Except as otherwise stated in the Registration Statement and the
Prospectus, all of the outstanding shares of capital stock of each
Significant Subsidiary have been duly authorized and validly issued and are
fully paid and nonassessable and are owned by the Company, directly or
through one or more Significant Subsidiaries, free and clear of any Lien,
except for such Liens as are not,
individually or in the aggregate, material to the Company and its
Significant Subsidiaries, considered as one enterprise.
(vi) Each of the documents incorporated by reference in the
Registration Statement or the Prospectus at the time they were filed or
last amended (other than the financial statements and the notes thereto,
the financial schedules, and any other financial data included or
incorporated by reference therein, as to which I need express no belief),
complied as to form in all material respects with the requirements of the
1934 Act and the 1934 Act Regulations, as applicable.
(vii) The Securities have been authorized for issuance and sale to the
Underwriters pursuant to this Agreement and, when issued and delivered by
the Company pursuant to this Agreement against payment of the consideration
set forth in the Pricing Agreement, will be validly issued and fully paid
and non-assessable.
(viii) The Shares subject to the Purchase Contract Agreement have been
validly authorized and reserved for issuance and, when issued and delivered
by the Company in accordance with the provisions of the Purchase Contract
Agreement, the Purchase Contracts and the Pledge Agreement, will be fully
paid and non-assessable; the issuance of such Shares will not be subject to
preemptive or other similar rights arising by law or otherwise.
(ix) The issuance of the Securities is not subject to preemptive or
other similar rights arising by law or otherwise.
(x) All of the issued and outstanding Common Securities of the Trust
are directly owned by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equitable right.
(xi) This Agreement, the Pricing Agreement and the Remarketing
Agreement have been duly authorized, executed and delivered by the Company.
(xii) The entry by the Company into the Purchase Contracts underlying
the Securities that are FELINE PRIDES, the offer of the Securities as
contemplated herein and in the Prospectus, the issue of the Shares and the
sale of the Shares by the Company pursuant to the Purchase Contracts; the
execution, delivery and performance of this Agreement, the Pricing
Agreement, the Remarketing Agreement, the Purchase Contracts, the Purchase
Contract Agreement, the Pledge Agreement, the Declaration, the Preferred
Securities, the Common Securities, the Indenture, the Debentures and the
Guarantee Agreements, and the consummation of the transactions contemplated
herein, therein and in the Registration Statement (including the issuance
and sale of the Securities and the use of proceeds from the sale of the
Securities as described in the Prospectus under the caption "Use of
Proceeds") and compliance by the Offerors with their obligations hereunder
and
B-2
thereunder have been authorized by all necessary action (corporate or
trust) and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a breach of
any of the terms or provisions of, or constitute a default or Repayment
Event under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company, any Significant
Subsidiary or the Trust pursuant to, the Agreements and Instruments (except
for such conflicts, breaches or defaults or liens, charges or encumbrances
that would not result in a Material Adverse Effect), nor will such action
result in any violation of any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company, any Significant Subsidiary or the Trust or any of their assets,
properties, or operations (except for such violations that would not result
in a Material Adverse Effect), nor will such action result in any violation
of the provisions of the charter or by-laws of the Company or any
Significant Subsidiary or the Declaration or Certificate of Trust.
(xiii) There are no statutes required to be described in or
incorporated by reference in the Registration Statement that are not
described or incorporated by reference; and there are no legal or
governmental proceedings pending or, to my knowledge, threatened that are
required to be disclosed or incorporated by reference in the Registration
Statement, other than those disclosed or incorporated by reference therein.
(xiv) There are no contracts, indentures, mortgages, agreements,
notes, leases or other instruments required to be described or referred to
or incorporated by reference in the Registration Statement or to be filed
as exhibits thereto other than those described or referred to or
incorporated by reference therein or filed as exhibits thereto; and the
descriptions thereof or references thereto are true and correct in all
material respects.
Moreover, nothing has come to my attention that causes me to believe
that the Registration Statement, including any information provided pursuant to
Rule 430A or Rule 434, on the original effective date of the Registration
Statement, on the effective date of the most recent post-effective amendment
thereto, if any, on the date of the filing of any annual report on Form 10-K
after the filing of the Registration Statement, on the date of the Underwriting
Agreement or on any Representation Date, contained an untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, or that the
Prospectus, or any amendment or supplement thereto, at the time the Prospectus
Supplement was issued at the time any such amended or supplemented Prospectus
was issued or at the date hereof, contained or contains an untrue statement of
a material fact or omitted or omits to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that I express no opinion or belief with
respect to the financial statements, schedules and other financial data
included therein or excluded therefrom.
B-3
Exhibit C
FORM OF OPINION OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
Based upon and subject to the limitations, qualifications, exceptions
and assumptions set forth above, we are of the opinion that:
(i) The Registration Statement is effective under the 1933 Act; any
required filing of the Prospectus pursuant to Rule 424(b) under the
Securities Act has been made in the manner and within the time period
required by such Rule 424(b); and, to our knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued
under the 1933 Act, and no proceedings therefor have been initiated or, to
the best of our knowledge, threatened by the Commission.
(ii) The Registration Statement as of its effective date and the
Prospectus and each amendment or supplement thereto as of its issue date
and as of the date hereof (in each case, other than the financial
statements and the notes thereto, the financial schedules, and any other
financial data included or incorporated by reference therein or the
Statements of Eligibility on Form T-1, as to which we express no belief),
complied as to form in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations; and the Declaration, the Indenture
and the Preferred Securities Guarantee Agreement complied as to form in all
respects with the requirements of the 1939 Act and the 1939 Act
Regulations.
(iii) The Securities have been authorized for issuance and sale to the
Underwriters pursuant to this Agreement and, when issued and delivered by
the Company pursuant to this Agreement against payment of the consideration
set forth in the Pricing Agreement, will be validly issued and fully paid
and non-assessable; the Common Stock and the Securities are each registered
under the 1934 Act, and the FELINE PRIDES issuable at the Closing Time and
the Shares issuable by the Company pursuant to the Purchase Contracts have
been authorized for listing on the New York Stock Exchange, upon official
notice of issuance.
(iv) The Shares subject to the Purchase Contract Agreement have been
validly authorized and reserved for issuance and, when issued and delivered
by the Company in accordance with the provisions of the Purchase Contract
Agreement, the Purchase Contracts and the Pledge Agreement, will be fully
paid and non-assessable; the issuance of such Shares will not be subject to
preemptive or other similar rights arising by law or, to our knowledge,
otherwise.
(v) The issuance of the Securities is not subject to preemptive or
other similar rights arising by law or, to our knowledge, otherwise.
(vi) All of the issued and outstanding Common Securities of the Trust
are directly owned by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equitable right.
(vii) This Agreement, the Pricing Agreement and the Remarketing
Agreement have been duly authorized, executed and delivered by the Trust.
(viii) The Purchase Contract Agreement has been duly authorized by the
Company and, assuming due authorization, execution and delivery of the
Purchase Contract Agreement by the Purchase Contract Agent, constitutes a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions.
(ix) The Pledge Agreement has been duly authorized by the Company and,
assuming due authorization, execution and delivery of the Pledge Agreement
by the Collateral Agent and the Purchase Contract Agent, constitutes a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions.
(x) Each of the Guarantee Agreements has been duly authorized,
executed and delivered by the Company; the Preferred Securities Guarantee
Agreement, assuming it is duly authorized, executed, and delivered by the
Guarantee Trustee, constitutes a legal, valid and binding obligation of the
Company and the Guarantee Trustee, enforceable against the Company and the
Guarantee Trustee in accordance with its terms, except to the extent that
enforcement thereof may be limited by Bankruptcy Exceptions; and the
Preferred Securities Guarantee Agreement has been duly qualified under the
1939 Act.
(xi) The Indenture has been executed and delivered by the Company and,
assuming authorization, execution, and delivery thereof by the Debt
Trustee, is a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except to the
extent that enforcement thereof may be limited by the Bankruptcy
Exceptions; and the Indenture has been duly qualified under the 1939 Act.
(xii) The Debentures are in the form contemplated by the Indenture,
have been duly authorized, executed and delivered by the Company and, when
authenticated by the Debt Trustee in the manner provided for in the
Indenture and delivered against payment therefor by the Trust, will
constitute legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except to the extent
that enforcement thereof may be limited by the Bankruptcy Exceptions.
(xiii) The entry by the Company into the Purchase Contracts underlying
the Securities that are FELINE PRIDES, the offer of the Securities as
contemplated herein and in the Prospectus, the issue of the Shares and the
sale of the Shares by the Company
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pursuant to the Purchase Contracts; the execution, delivery and
performance of this Agreement, the Pricing Agreement, the Remarketing
Agreement, the Purchase Contracts, the Purchase Contract Agreement, the
Pledge Agreement, the Declaration, the Preferred Securities, the Common
Securities, the Indenture, the Debentures and the Guarantee Agreements, and
the consummation of the transactions contemplated herein, therein and in
the Registration Statement (including the issuance and sale of the
Securities and the use of proceeds from the sale of the Securities as
described in the prospectus under the caption "Use of Proceeds") and
compliance by the Offerors with their obligations hereunder and thereunder
have been authorized by all necessary action (corporate or trust) and do
not and will not, whether with or without the giving of notice or passage
of time or both, conflict with or constitute a breach of any of the terms
or provisions of, or constitute a default or Repayment Event under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company, any Significant Subsidiary or
the Trust pursuant to, any agreement or other instrument binding on the
Company or any of its Significant Subsidiaries that is listed as an exhibit
to (a) the Registration Statement, (b) the Company's Annual Report on Form
10-K for the fiscal year ended January 31, 1997, (c) the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 1997
or (d) the Annual Report on Form 10-K of HFS Incorporated for the fiscal
year ended December 31, 1996, nor will such action result in any violation
of any applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company, any Significant Subsidiary
or the Trust or any of their assets, properties, or operations (except for
such violations that would not result in a Material Adverse Effect), nor
will such action result in any violation of the provisions of the charter
or by-laws of the Company or any Significant Subsidiary or the Declaration
or Certificate of Trust.
(xiv) When issued in accordance with the terms of the Purchase
Contract Agreement and delivered against payment therefor as provided in
the Underwriting Agreement, the holders of the FELINE PRIDES will be
entitled to the rights and subject to the obligations specified in the
Purchase Contract Agreement.
(xv) The provisions of the Pledge Agreement are effective to create in
favor of the Collateral Agent for the benefit of the Company a valid
security interest under the UCC in all "securities entitlements" (as
defined in Section 8-102(a)(17) of the UCC and the Federal Book-Entry
Regulations) now or hereafter credited to the Collateral Account and
relating to the Preferred Securities or the Treasury Securities (the
"Pledged Securities Entitlements"); and the provisions of the Pledge
Agreement are effective under the UCC and the Federal Book-Entry
Regulations to perfect the security interest of the Collateral Agent for
the benefit of the Company in the Pledged Securities Entitlements.
(xvi) The Security Certificates are in a form contemplated by the
Purchase Contract Agreement.
C-3
(xvii) The information in the Prospectus under the captions
"Description of the FELINE PRIDES," "Description of the Purchase
Contracts," "Certain Provisions of the Purchase Contract Agreement and the
Pledge Agreement," "Description of the Trust Preferred Securities,"
"Description of the Guarantee," "Description of the Debentures" and
"General Description of Capital Stock--Description of Common Stock," to the
extent that they involve matters of law, summaries of legal matters,
documents or proceedings, or legal conclusions, has been reviewed by us and
is correct in all material respects.
(xviii) No authorization, approval, consent, order, registration or
qualification of or with any court or governmental authority or agency is
required (a) for the execution, delivery and performance by the Company or
the Trust, as the case may be, of this Agreement, the Pricing Agreement,
the Remarketing Agreement, the Purchase Contract Agreement, the Purchase
Contracts, the Pledge Agreement, the Indenture, the Debentures, the
Guarantee Agreements, the Declaration and the Securities or (b) in
connection with the issuance and sale of the Common Securities, the
offering of the Securities and the issuance and sale of the Shares by the
Company pursuant to the Purchase Contracts, except such as have been
obtained and made under the federal securities laws and such as may be
required under state or foreign securities or Blue Sky laws.
(xix) Neither the Trust nor the Company or any of its subsidiaries is,
and upon the issuance and sale of the Securities as herein contemplated and
the application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xx) The Trust has been created and is validly existing in good
standing as a business trust under the Delaware Act, and has the business
trust power and authority to conduct its business as described in the
Prospectus.
(xxi) Assuming the due authorization, execution and delivery of the
Declaration by Wilmington Trust Company, the Declaration has been
authorized, executed and delivered by the Company and the Regular Trustees
and is a legal, valid and binding obligation of the Company, enforceable
against the Company and each of the Regular Trustees in accordance with its
terms, except as enforcement thereof may be limited by the Bankruptcy
Exceptions; and the Declaration has been duly qualified under the 1939 Act.
(xxii) Under the Delaware Act and the Declaration, the Trust has the
power and authority to (a) execute and deliver, and to perform its
obligations under, this Agreement and the Pricing Agreement and (b) issue,
and perform its obligations under, the Trust Securities.
(xxiii) Under the Delaware Act and the Declaration, the execution and
delivery by the Trust of this Agreement and the Pricing Agreement, and the
performance by the Trust
C-4
of its obligations hereunder and under the Pricing Agreement, have
been authorized by all necessary action on the part of the Trust.
(xxiv) The Preferred Securities have been authorized by the
Declaration and, when executed by the Trust and delivered against payment
therefor in accordance with the terms of this Agreement, will be validly
issued and, subject to qualifications hereinafter expressed, fully paid and
nonassessable undivided beneficial interests in the assets of the Trust;
the Holders of the Preferred Securities, as beneficial owners of the Trust,
will 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; said counsel may note that the
holders of the Preferred Securities may be obligated to make payments as
set forth in the Declaration.
(xxv) The Common Securities have been authorized by the Declaration
and, when issued, executed and authenticated in accordance with the terms
of the Declaration, and delivered and paid for as set forth in the
Prospectus, will be validly issued, undivided beneficial interests in the
assets of the Trust.
(xxvi) Under the Delaware Act and the Declaration, the issuance of the
Trust Securities is not subject to preemptive or other similar rights.
(xxvii) None of the execution and delivery by the Trust of, or the
performance by the Trust of its obligations under, this Agreement, the
issuance and sale of the Preferred Securities by the Trust in accordance
with the terms of this Agreement and the Pricing Agreement, or the
consummation by the Trust of the other transactions contemplated thereby,
will violate any provisions of applicable Delaware law or Dela- ware
administrative regulations or the Certificate of Trust or the Declaration.
(xxviii) No authorization, approval, consent or order of any Delaware
court or Delaware state governmental authority or Delaware state agency is
required to be obtained by the Trust solely as a result of the issuance and
sale by the Trust of the Securities, except such as has been obtained and
made under the federal securities laws or such as may be required under
state or foreign securities or blue sky laws.
(xxix) Under current U.S. federal income tax law: (a) the Trust will
be classified as a grantor trust and not as an association taxable as a
corporation; (b) the Debentures will be classified as indebtedness of the
Company and (c) the discussion in the Prospectus under the caption "Certain
Federal Income Tax Consequences" is a fair and accurate summary of the
matters addressed therein, based upon current law and the assumptions
stated or referred to therein. The opinion expressed in clause (c) may be
conditioned on the initial and continuing accuracy of the facts, financial
and other information, covenants and representations set forth in
certificates of officers of the Company and the Trust and other documents
deemed necessary for such opinion.
C-5
(xxx) The issuance and sale of the Income PRIDES and the Growth PRIDES
do not violate the Commodity Exchange Act or the regulations of the
Commodity Futures Trading Commission thereunder.
We have been orally advised by the Commission that the Registration
statement was declared effective under the 1933 Act at 2:30 p.m. on February
23, 1998 and, we have been advised by the Commission that no stop order
suspending the effectiveness of the Registration Statement under the 1933 Act
has been issued and, to the best of our knowledge, no proceedings for that
purpose have been initiated or are pending or threatened by the Commission.
In addition, we have participated in conferences with officers and
representatives of the Company, representatives of the independent accountants
of the Company, and you and your counsel at which the contents of the
Registration Statement and the Prospectus and related matters were discussed
and, although we are not passing upon and do not assume any responsibility for,
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus and we have made no independent check
or verification thereof, except as set forth in numbered paragraph (xvii)
above, on the basis of the foregoing, no facts have come to our attention that
have led us to believe that the Registration Statement, at the time it became
effective, contained an untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, as of the date of
the Prospectus Supplement or as of the date hereof, contained or contains an
untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that we
express no opinion or belief with respect to the financial statements,
schedules and other financial data included therein or excluded therefrom,
including any Forms T-1.
Very truly yours,
C-6
Exhibit D
LETTER OF DELOITTE & TOUCHE LLP
Exhibit E
LETTER OF KPMG PEAT MARWICK LLP
Exhibit F
LETTER OF ERNST & YOUNG LLP
AMENDED AND RESTATED DECLARATION
OF TRUST
Cendant Capital I
Dated as of February 24, 1998
TABLE OF CONTENTS
Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 DEFINITIONS..................................................... 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION................................ 9
SECTION 2.2 LISTS OF HOLDERS OF SECURITIES.................................. 9
SECTION 2.3 REPORTS BY THE INSTITUTIONAL TRUSTEE............................ 9
SECTION 2.4 PERIODIC REPORTS TO INSTITUTIONAL TRUSTEE....................... 9
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT............... 10
SECTION 2.6 EVENTS OF DEFAULT; WAIVER...................................... 10
SECTION 2.7 EVENT OF DEFAULT; NOTICE....................................... 11
ARTICLE III
ORGANIZATION
SECTION 3.1 NAME........................................................... 12
SECTION 3.2 OFFICE......................................................... 12
SECTION 3.3 PURPOSE........................................................ 12
SECTION 3.4 AUTHORITY...................................................... 13
SECTION 3.5 TITLE TO PROPERTY OF THE TRUST................................. 13
SECTION 3.6 POWERS AND DUTIES OF THE REGULAR TRUSTEES...................... 13
SECTION 3.7 PROHIBITION OF ACTIONS BY THE TRUST AND
THE TRUSTEES................................................... 16
SECTION 3.8 POWERS AND DUTIES OF THE INSTITUTIONAL TRUSTEE................. 16
SECTION 3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF
THE INSTITUTIONAL TRUSTEE...................................... 18
SECTION 3.10 CERTAIN RIGHTS OF INSTITUTIONAL TRUSTEE........................ 20
SECTION 3.11 DELAWARE TRUSTEE............................................... 21
SECTION 3.12 EXECUTION OF DOCUMENTS......................................... 22
SECTION 3.13 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE
OF SECURITIES.................................................. 22
SECTION 3.14 DURATION OF TRUST.............................................. 22
SECTION 3.15 MERGERS........................................................ 22
ARTICLE IV
SPONSOR
SECTION 4.1 SPONSOR'S PURCHASE OF COMMON SECURITIES........................ 24
SECTION 4.2 RIGHTS AND RESPONSIBILITIES OF THE SPONSOR..................... 24
i
SECTION 4.3 RIGHT TO PROCEED............................................... 24
SECTION 4.4 EXPENSES....................................................... 25
ARTICLE V
TRUSTEES
SECTION 5.1 NUMBER OF TRUSTEES............................................. 25
SECTION 5.2 DELAWARE TRUSTEE............................................... 26
SECTION 5.3 INSTITUTIONAL TRUSTEE; ELIGIBILITY............................. 26
SECTION 5.4 CERTAIN QUALIFICATIONS OF REGULAR TRUSTEES AND
DELAWARE TRUSTEE GENERALLY..................................... 27
SECTION 5.5 REGULAR TRUSTEES............................................... 27
SECTION 5.6 APPOINTMENT, REMOVAL AND RESIGNATION
OF TRUSTEES.................................................... 28
SECTION 5.7 VACANCIES AMONG TRUSTEES....................................... 29
SECTION 5.8 EFFECT OF VACANCIES............................................ 29
SECTION 5.9 MEETINGS....................................................... 29
SECTION 5.10 DELEGATION OF POWER............................................ 30
SECTION 5.11 MERGER, CONVERSION, CONSOLIDATION OR
SUCCESSION TO BUSINESS......................................... 30
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 DISTRIBUTIONS.................................................. 30
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 GENERAL PROVISIONS REGARDING SECURITIES........................ 31
SECTION 7.2 PAYING AGENT................................................... 31
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 TERMINATION OF TRUST........................................... 32
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 TRANSFER OF SECURITIES......................................... 32
SECTION 9.2 TRANSFER OF CERTIFICATES....................................... 33
SECTION 9.3 DEEMED SECURITY HOLDERS........................................ 33
SECTION 9.4 BOOK ENTRY INTERESTS........................................... 33
SECTION 9.5 NOTICES TO CLEARING AGENCY..................................... 34
SECTION 9.6 APPOINTMENT OF SUCCESSOR CLEARING AGENCY....................... 34
ii
SECTION 9.7 DEFINITIVE PREFERRED SECURITY CERTIFICATES................... 34
SECTION 9.8 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES............ 35
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 LIABILITY.................................................... 35
SECTION 10.2 EXCULPATION.................................................. 36
SECTION 10.3 FIDUCIARY DUTY............................................... 36
SECTION 10.4 INDEMNIFICATION.............................................. 37
SECTION 10.5 OUTSIDE BUSINESSES........................................... 39
ARTICLE XI
ACCOUNTING
SECTION 11.1 FISCAL YEAR.................................................. 40
SECTION 11.2 CERTAIN ACCOUNTING MATTERS................................... 40
SECTION 11.3 BANKING...................................................... 40
SECTION 11.4 WITHHOLDING.................................................. 41
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 AMENDMENTS................................................... 41
SECTION 12.2 MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY
WRITTEN CONSENT.............................................. 43
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.1 REPRESENTATIONS AND WARRANTIES OF
INSTITUTIONAL TRUSTEE........................................ 44
SECTION 13.2 REPRESENTATIONS AND WARRANTIES OF
DELAWARE TRUSTEE............................................. 44
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 NOTICES...................................................... 45
SECTION 14.2 GOVERNING LAW................................................ 46
SECTION 14.3 INTENTION OF THE PARTIES..................................... 46
SECTION 14.4 HEADINGS..................................................... 47
SECTION 14.5 SUCCESSORS AND ASSIGNS....................................... 47
SECTION 14.6 PARTIAL ENFORCEABILITY....................................... 47
SECTION 14.7 COUNTERPARTS................................................. 47
iii
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
Cendant Capital I
February 24, 1998
AMENDED AND RESTATED DECLARATION OF TRUST (the "Declaration") dated
and effective as of February 24, 1998, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the Holders (as defined herein), from time
to time, of the securities representing undivided beneficial interests in the
assets of the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established Cendant Capital I
(the "Trust"), a trust under the Business Trust Act (as defined herein)
pursuant to a Declaration of Trust dated as of February 5, 1997 (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on February 5, 1998, for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in certain Debentures of
the Debenture Issuer (as defined herein);
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original
Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust,
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the Trust and Holders, from time to time, of the
securities representing undivided beneficial interests in the assets of the
Trust issued hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 DEFINITIONS
Unless the context otherwise requires:
(a) capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and Exhibits
to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration or
unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"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.
"Applicable Ownership Interest" has the meaning set forth in Annex I
hereto.
"Applicable Principal Amount" has the meaning set forth in Annex I
hereto.
"Authorized Newspaper" means a daily newspaper, in the English
language, customarily published on each day that is a Business Day in The City
of New York, whether or not published on days that are Legal Holidays, and of
general circulation in The City of New York. The Authorized Newspaper for the
Purposes of the Reset Spread Announcement Date, is currently anticipated to be
The Wall Street Journal.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than Saturday, Sunday or any day on
which banking institutions in Wilmington, Delaware, 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 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 Preferred Securities and in whose name or in the name of a
nominee of that organization shall be registered a Global Certificate and which
shall undertake to effect book entry transfers and pledges of the 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 the "Closing Time" and each "Date of Delivery"
under the Purchase Agreement.
2
"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 7.1.
"Common Securities Guarantee" means the guarantee agreement
to be dated as of March 2, 1998 of the Sponsor in respect of the Common
Securities.
"Common Security Certificate" means a definitive certificate
in fully registered form representing a Common Security substantially in the
form of Exhibit A-2.
"Company Indemnified Person" means (a) any Regular Trustee;
(b) any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Regular Trustee; or (d) any officer, employee or agent of the Trust or its
Affiliates.
"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 Declaration is
located at Rodney Square North, 1100 North Market Street, Wilmington, Delaware
19890-0001.
"Covered Person" means: (a) any officer, director,
shareholder, partner, member, representative, employee or agent of (i) the
Trust or (ii) the Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Cendant Corporation, a Delaware
corporation, in its capacity as issuer of the Debentures under the Indenture.
"Debenture Trustee" means The Bank of Nova Scotia Trust
Company 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 6.45% Debentures to be
issued by the Debenture Issuer under the Indenture, a specimen certificate for
such series of Debentures being Exhibit B.
"Debenture Repayment Price" means, with respect to any
Debentures put to the Sponsor on March 2, 2001, an amount per Debenture equal
to $50, plus accumulated and unpaid interest (including deferred interest, if
any).
"Definitive Preferred Security Certificates" has the meaning
set forth in Section 9.4.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Direction" by a Person means a written direction signed:
(a) if the Person is a natural person, by that
Person; or
3
(b) in any other case, in the name of such Person
by one or more Authorized Officers of that Person.
"Direct Action" has the meaning specified in Section 3.8(e).
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 6.1.
"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) has occurred and is continuing
in respect of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"Failed Remarketing" has the meaning specified in Section
5.4(b) of the Purchase Contract Agreement.
"Fiduciary Indemnified Person" has the meaning set forth in
Section 10.4(b).
"Global Certificate" has the meaning set forth in Section
9.4.
"Holder" or "holder" means a Person in whose name a
Certificate representing a Security is registered, such Person being a
beneficial owner within the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of February 24,
1998, among the Debenture Issuer and the Debenture Trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued.
"Institutional Trustee" means the Trustee meeting the
eligibility requirements set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in
Section 3.8(c).
"Investment Company" means an investment company as defined
in the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in
Annex I hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
4
"Majority in liquidation amount of the Securities" means,
except as provided in the terms and conditions of the Preferred Securities set
forth in Annex I hereto or by the Trust Indenture Act, Holder(s) of outstanding
Securities voting together as a single class or, as the context may require,
Holders of outstanding Preferred Securities or Holders of outstanding Common
Securities voting separately as a class, who are the record owners of more than
50% of the aggregate liquidation amount (including the stated amount that would
be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Securities of the relevant class.
"Ministerial Action" has the meaning set forth in the terms
of the Securities as set forth in Annex I.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by an Authorized Officer of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that the officers signing the Officers'
Certificate have read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by the officer in rendering the
Officers' Certificate;
(c) a statement that such officers have made such
examination or investigation as, in such officers' opinion, is necessary to
enable such officers to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of such
officers, such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 7.2.
"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.
"Pledge Agreement" means the Pledge Agreement dated as of
March 2, 1998 among the Sponsor, The Chase Manhattan Bank, as collateral agent
(the "Collateral Agent"), and The First National Bank of Chicago, as purchase
contract agent (the "Purchase Contract Agent").
"Preferred Securities Guarantee" means the guarantee
agreement to be dated as of March 2, 1998 of the Sponsor in respect of the
Preferred Securities.
"Preferred Security" has the meaning specified in Section
7.1.
"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
5
Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate
representing a Preferred Security substantially in the form of Exhibit A-1.
"Pricing Agreement" means the pricing agreement between the
Trust, the Debenture Issuer, and the underwriters designated by the Regular
Trustees with respect to the offer and sale of the Preferred Securities.
"Primary Treasury Dealer" has the meaning set forth in Annex
I hereto.
"Purchase Contract Agreement" means the Purchase Contract
Agreement dated as of March 2, 1998 among The First National Bank of Chicago,
as Purchase Contract Agent, and the Sponsor.
"Purchase Contract Settlement Date" means February 16, 2001.
"Put Option" has the meaning set forth in Annex I hereto.
"Quorum" means a majority of the Regular Trustees or, if
there are only two Regular Trustees, both of them.
"Quotation Agent" has the meaning set forth in Annex I
hereto.
"Redemption Amount" has the meaning set forth in Annex I
hereto.
"Redemption Price" has the meaning set forth in Annex I
hereto.
"Regular Trustee" has the meaning set forth in Section 5.1.
"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.
"Reset Agent" means a nationally recognized investment
banking firm chosen by the Sponsor to determine the Reset Rate. It is currently
anticipated that Merrill Lynch & Co. will act in such capacity.
"Reset Announcement Date" means the tenth (10) Business Day
immediately preceding the Purchase Contract Settlement Date.
"Reset Rate" means the distribution rate per annum (to be
determined by the Reset Agent), equal to the sum of (X) the Reset Spread and
(Y) the rate of interest on the Two-Year Benchmark Treasury in effect on the
third Business Day immediately preceding the Purchase Contract Settlement Date,
that the Preferred Securities should bear in order for the Preferred Securities
to have an approximate market value of 100.5% of their aggregate liquidation
amount on the third Business Day immediately preceding the
6
Purchase Contract Settlement Date; provided, that the Sponsor may limit such
Reset Spread to be no higher than 200 basis points (2%).
"Reset Spread" means a spread amount to be determined by the
Reset Agent on the tenth (10) Business Day immediately preceding the Purchase
Contract Settlement Date.
"Responsible Officer" means, with respect to the
Institutional Trustee, any officer within the Corporate Trust Office of the
Institutional Trustee, including, without limitation, 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 assigned by the Institutional Trustee to administer its corporate trust
matters 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.
"Rule 3a-5" means Rule 3a-5 under the Investment Company
Act.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Guarantees" means the Common Securities
Guarantee and the Preferred Securities Guarantee.
"Securities Act" means the Securities Act of 1933, as
amended from time to time, or any successor legislation.
"Sponsor" means Cendant Corporation, a Delaware corporation,
or any successor entity in a merger or consolidation, in its capacity as
sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in
Section 5.7(b)(ii).
"Successor Entity" has the meaning set forth in Section
3.15(b)(i).
"Successor Institutional Trustee" has the meaning set forth
in Section 3.8(f)(ii).
"Super Majority" has the meaning set forth in Section
2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I hereto.
"Tax Event Redemption" has the meaning set forth in Annex I
hereto.
"Tax Event Redemption Date" has the meaning set forth in
Annex I hereto.
"10% in liquidation amount of the Securities" means, except
as provided in the terms of the Preferred Securities or by the Trust Indenture
Act, Holder(s) of outstanding Securities voting together as a single class or,
as the context may require, Holders of outstanding Preferred Securities or
Holders of outstanding Common Securities voting separately as a class, who are
the record owners of 10% or more of the aggregate liquidation amount (including
the stated amount that would be paid on repayment, liquidation
7
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.
"Termination Event" has the meaning set forth in Section 1
of the Purchase Contract Agreement.
"Treasury Portfolio" has the meaning set forth in Annex I
hereto.
"Treasury Portfolio Purchase Price" has the meaning set
forth in Annex I hereto.
"Treasury Regulations" means the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Treasury Securities" has the meaning set forth in Section 1
of the Purchase Contract Agreement.
"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.
"Two-Year Benchmark Treasury" means direct obligations of
the United States (which may be obligations traded on a when-issued basis only)
having a maturity comparable to the remaining term to maturity of the Preferred
Securities, as agreed upon by the Sponsor and the Reset Agent. The rate for the
Two-Year Benchmark Treasury will be the bid side rate displayed at 10:00 A.M.,
New York City time, on the third Business Day immediately preceding the
Purchase Contract Settlement Date in the Telerate system (or if the Telerate
system is (a) no longer available on the third Business Day immediately
preceding the Purchase Contract Settlement Date or (b) in the opinion of the
Reset Agent (after consultation with the Sponsor) no longer an appropriate
system from which to obtain such rate, such other nationally recognized
quotation system as, in the opinion of the Reset Agent (after consultation with
the Sponsor) is appropriate). If such rate is not so displayed, the rate for
the Two-Year Benchmark Treasury shall be, as calculated by the Reset Agent, the
yield to maturity for the Two-Year Benchmark Treasury, expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis, and computed by taking the arithmetic mean of the
secondary market bid rates, as of 10:30 A.M., New York City time, on the third
Business Day immediately preceding the Purchase Contract Settlement Date of
three leading United States government securities dealers selected by the Reset
Agent (after consultation with the Sponsor) (which may include the Reset Agent
or an Affiliate thereof).
"Underwriting Agreement" means the Underwriting Agreement
for the offering and sale of Preferred Securities.
8
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration 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 ss.ss. 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) Any 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 Regular Trustees, 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 Regular Trustees, on behalf of the Trust,
shall be obligated to provide such List of Holders at any time the List of
Holders does not differ from the most recent List of Holders given to the
Institutional Trustee by the Sponsor and the Regular Trustees on behalf of the
Trust, and (ii) at any other time, within 30 days of receipt by the Trust of a
written request by the Institutional Trustee for 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 the 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
ss.ss. 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, commencing May 15, 1998, the
Institutional Trustee shall provide to the Holders of the Preferred Securities
such reports as are required by ss.313 of the Trust Indenture Act, if any, in
the form and in the manner provided by ss.313 of the Trust Indenture Act. The
Institutional Trustee shall also comply with the requirements of ss.313(d) of
the Trust Indenture Act.
SECTION 2.4 PERIODIC REPORTS TO INSTITUTIONAL TRUSTEE.
Each of the Sponsor and the Regular Trustees, on behalf of the Trust,
shall provide to the Institutional Trustee such documents, reports and
information as required by ss.314 (if any) and the compliance certificate
9
required by ss.314 of the Trust Indenture Act in the form, in the manner and at
the times required by ss.314 of the Trust Indenture Act.
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Sponsor and the Regular Trustees, 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 ss. 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to ss.
314(c) (1) may be given in the form of an Officers' Certificate.
SECTION 2.6 EVENTS OF DEFAULT; WAIVER.
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of
Default under 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 of the Holders
of at least the proportion in liquidation amount of the Preferred
Securities that the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of ss. 316(a)
(1)(B) of the Trust Indenture Act and such ss. 316(a) (1) (B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Preferred Securities, as permitted by the Trust Indenture Act. Upon such
waiver, any such default shall cease to exist, and any Event of Default with
respect to the Preferred Securities arising therefrom shall be deemed to have
been cured, for every purpose of this Declaration, but no such waiver shall
extend to any subsequent or other default or an Event of Default with respect
to the Preferred Securities or impair any right consequent thereon. Any waiver
by the Holders of the Preferred Securities of an Event of Default with respect
to the Preferred Securities shall also be deemed to constitute a waiver by the
Holders of the Common Securities of any such Event of Default with respect to
the Common Securities for all purposes of this Declaration without any further
act, vote, or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such Event
of Default under this Declaration as provided below in this Section
2.6(b), the Event of Default under this Declaration shall also not be
waivable; or
10
(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 2.6(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, each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Securities and its consequences until all Events of Default with respect
to the Preferred Securities have been cured, waived or otherwise eliminated,
and until such Events of Default have been so cured, waived or otherwise
eliminated, the Institutional Trustee will be deemed to be acting solely on
behalf of the Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Institutional Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
Section 2.6(b) shall be in lieu of ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act and such ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Subject to the foregoing
provisions of this Section 2.6(b), upon such waiver, any such default shall
cease to exist and any Event of Default with respect to the Common Securities
arising therefrom shall be deemed to have been cured for every purpose of this
Declaration, but no such waiver shall extend to any subsequent or other default
or Event of Default with respect to the Common Securities or impair any right
consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee at the direction of the Holders of the Preferred
Securities constitutes a waiver of the corresponding Event of Default with
respect to the Preferred Securities under this Declaration. Any waiver of an
Event of Default under the Indenture by the Institutional Trustee at the
direction of the Holders of the Preferred Securities shall also be deemed to
constitute a waiver by the Holders of the Common Securities of the
corresponding Event of Default under this Declaration with respect to the
Common Securities for all purposes of this Declaration without further act,
vote or consent of the Holders of the Common Securities. The foregoing
provisions of this Section 2.6(c) shall be in lieu of ss. 316(a)(1)(B) of the
Trust Indenture Act and such ss. 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 a
Responsible Officer of the Institutional Trustee obtains actual knowledge of
the occurrence of an Event of Default, actually known to such Responsible
Officer of the Institutional Trustee, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of all such defaults with
respect to the Securities, unless such defaults have been cured before the
giving of such notice (the term "defaults" for the purposes of this Section
2.7(a) being hereby defined to be an Event of Default as defined in the
Indenture, not including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein); provided that,
except for a default in the payment of principal of (or premium, if any) or
interest on any of the Debentures, 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.
11
(b) The Institutional Trustee shall not be deemed to have
knowledge of any default except:
(i) a default under Sections 501(1) and 501(2) of the
Indenture; or
(ii) any 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.
The Sponsor and the Administrative Trustee shall file
annually with the Institutional Trustee a certification as to whether or not
they are in compliance with all the conditions applicable to them under this
Declaration.
ARTICLE III
ORGANIZATION
SECTION 3.1 NAME.
The Trust is named "Cendant Capital I," as such name may be modified
from time to time by the Regular Trustees following written notice to the
Delaware Trustee, the Institutional Trustee and Holders of the Securities. The
Trust's activities may be conducted under the name of the Trust or any other
name deemed advisable by the Regular Trustees.
SECTION 3.2 OFFICE.
The address of the principal office of the Trust is c/o Cendant
Corporation, 6 Sylvan Way, Parsippany, New Jersey 07054-0656. On ten Business
Days written notice to the Institutional Trustee and Holders of the Securities,
the Regular Trustees may designate another principal office.
SECTION 3.3 PURPOSE.
The exclusive purposes and functions of the Trust are (a) to issue and
sell the Securities and use the gross proceeds from such sale to acquire the
Debentures, and (b) except as otherwise set forth herein, to engage in only
those other activities necessary, appropriate, convenient 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. It
is the intent of the parties to this Declaration for the Trust to be classified
as a grantor trust for United States federal income tax purposes under Subpart
E of Subchapter J of the Code, pursuant to which the owners of the Preferred
Securities and the Common Securities will be the owners of the Trust for United
States federal income tax purposes, and such owners will include directly in
their gross income the income, gain, deduction or loss of the Trust as if the
Trust did not exist. By the acceptance of this Trust neither the Trustees, the
Sponsor nor the Holders of the Preferred Securities or Common Securities will
take any position for United States federal income tax purposes which is
contrary to the classification of the Trust as a grantor trust.
12
SECTION 3.4 AUTHORITY.
Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers
shall constitute the act of and serve to bind the Trust. In dealing with the
Trustees acting on behalf of the Trust, no Person shall be required to inquire
into the authority of the Trustees to bind the Trust. Persons dealing with the
Trust are entitled to rely conclusively on the power and authority of the
Trustees as set forth in this Declaration.
SECTION 3.5 TITLE TO PROPERTY OF THE TRUST.
Except as provided in Section 3.8 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. A Holder
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6 POWERS AND DUTIES OF THE REGULAR TRUSTEES.
The Regular Trustees shall have the exclusive power, duty and
authority and are hereby authorized and directed to cause the Trust to engage
in the following activities:
(a) to execute, deliver, issue and sell the Preferred Securities and
the Common Securities in accordance with this Declaration; provided, however,
that the Trust may issue no more than one series of Preferred Securities and no
more than one series of Common Securities, and, provided further, that there
shall be no interests in the Trust other than the Securities, and the issuance
of Securities shall be limited to a simultaneous issuance of both Preferred
Securities and Common Securities on each Closing Date;
(b) in connection with the issue and sale of the Preferred Securities,
at the direction of the Sponsor, to:
(i) execute and file with the Commission the registration
statement and the prospectus relating to the registration statement on
Form S-3 prepared by the Sponsor, including any amendments or
supplements, thereto, pertaining to the Preferred Securities and to
take any other action relating to the registration and sale of the
Preferred Securities under federal and state securities laws;
(ii) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be necessary in order
to qualify or register all or part of the FELINE PRIDES in any State
in which the Sponsor has determined to qualify or register such FELINE
PRIDES for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the New York Stock Exchange, Inc. or any other national
stock exchange or the Nasdaq Stock Market's National Market
for listing upon notice of issuance of any Preferred Securities;
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(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto, prepared by
the Sponsor, relating to the registration of the Preferred Securities
under Section 12(b) of the Exchange Act;
(v) execute and enter into and deliver the Underwriting
Agreement and Pricing Agreement providing for the sale of the FELINE
PRIDES; and
(vi) execute and deliver letters, documents or instruments
with DTC and other Clearing Agencies relating to the Preferred
Securities.
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that the
Regular Trustees shall cause legal title to the Debentures to be held of record
in the name of the Institutional Trustee for the benefit of the Trust and the
Holders of the Preferred Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written
notice of the occurrence of a Tax Event or an Investment Company Event;
provided that the Regular Trustees shall consult with the Sponsor before taking
or refraining from taking any Ministerial Action in relation to a Tax Event or
Investment Company Event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of ss.316(c) of the Trust Indenture Act, Distributions,
voting rights, repayments, redemptions and exchanges, and to issue relevant
notices to the Holders of Preferred Securities and Holders of Common Securities
as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Securities and this
Declaration;
(g) to the fullest extent permitted by law, to bring or defend, pay,
collect, compromise, arbitrate, resort to legal action, or otherwise adjust
claims or demands of or against the Trust ("Legal Action"), unless pursuant to
Section 3.8(e) the Institutional Trustee has the exclusive power to bring such
Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be executed
by any Regular Trustee;
(k) to incur expenses that are necessary, appropriate, convenient or
incidental to carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
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(m) to give prompt written notice to the Institutional Trustee and 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;
(n) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes for which the Trust
was created;
(o) to take any action, not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in their discretion to
be necessary or desirable in carrying out the activities of the Trust,
including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that
the Debentures will be treated as indebtedness of the Debenture Issuer
for United States federal income tax purposes, provided that such
action relating to this clause (iii) does not adversely affect the
interests of Holders;
(p) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Regular Trustees, on behalf of the
Trust;
(q) if applicable, to solicit holders of Securities which form a part
of the Income PRIDES to timely instruct the Purchase Contract Agent in order to
enable the Purchase Contract Agent to vote such Securities; and
(r) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary, appropriate, convenient or incidental to the foregoing.
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Institutional Trustee set forth in Section
3.8. No permissive power or authority available to the Regular Trustees shall
be construed to be a duty.
Any expenses incurred by the Regular Trustees pursuant to this Section
3.6 shall be reimbursed by the Sponsor.
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SECTION 3.7 PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES.
(a) The Trust shall not, the Trustees shall not and the Regular
Trustees shall cause the Trust not to, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust shall not,
the Trustees shall not and the Regular Trustees shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding
the Debentures, but shall distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness for borrowed
money, 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,
(A) direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures,
(B) waive any past default that is waivable under the Indenture, (C)
exercise any right to rescind or annul any declaration that the
principal of all the Debentures shall be due and payable, or (D)
consent to any amendment, modification or termination of the Indenture
or the Debentures where such consent shall be required unless the
Trust shall have received an opinion of counsel to the effect that
such modification will not cause more than an insubstantial risk that
for United States federal income tax purposes the Trust will not be
classified as a grantor trust.
SECTION 3.8 POWERS AND DUTIES OF THE INSTITUTIONAL TRUSTEE.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Institutional Trustee in trust for the benefit of the
Trust and the Holders of the Securities. The right, title and interest of the
Institutional Trustee to the Debentures shall vest automatically in each Person
who may hereafter be appointed as Institutional Trustee in accordance with
Section 5.6. Such vesting and cessation of title shall be effective whether or
not conveyancing documents with regard to the Debentures have been executed and
delivered.
(b) The Institutional Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
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(i) 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 Trust and 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 Preferred
Securities and Holders of the Common Securities from the Institutional
Trustee Account in accordance with Section 6.1. 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 rated at least "A"
or above by a "nationally recognized statistical rating organization",
as that term is defined for purposes of Rule 436(g)(2) under the
Securities Act;
(ii) engage in such ministerial activities as shall be
necessary, appropriate, convenient or incidental to effect the
repayment of the Preferred Securities and the Common Securities to the
extent the Debentures mature or are redeemed or the Put Option is
exercised; and
(iii) upon written notice of distribution issued by the
Regular Trustees in accordance with the terms of the Securities,
engage in such ministerial activities as shall be necessary,
appropriate, convenient or incidental to effect the distribution of
the Debentures to Holders of Securities upon the occurrence of certain
special events (as may be defined in the terms of the Securities)
arising from a change in law or a change in legal interpretation or
other specified circumstances pursuant to the terms of the Securities.
(d) 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 and this Declaration.
(e) The Institutional Trustee shall take any Legal Action which arises
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, the Business Trust Act
or the Trust Indenture Act; provided, however, that if the Institutional
Trustee fails to enforce its rights under the Debentures after a Holder of
Preferred Securities has made a written request, such Holder of Preferred
Securities may, to the fullest extent permitted by applicable law, institute a
legal proceeding against the Debenture Issuer without first instituting any
legal proceeding against the Institutional Trustee or any other person or
entity. Notwithstanding the foregoing, 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 on or principal of 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 Preferred Securities may 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 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
Common Securities will be subrogated to the rights of such Holders of Preferred
Securities. In connection with such Direct Action, the Debenture Issuer shall
be subrogated to the rights of such Holder of Preferred Securities with respect
to payments on the Preferred Securities under this Declaration to the extent of
any payment made by the Debenture Issuer to such Holder of Preferred Securities
in such Direct Action. 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.
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(f) The Institutional Trustee shall continue to serve as a Trustee
until either:
(i) the Trust has been completely liquidated and the proceeds
of the liquidation distributed to the Holders of Securities pursuant
to the terms of the Securities; or
(ii) a Successor Institutional Trustee has been appointed
and has accepted that appointment in accordance with Section 5.6.
(g) 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, the Institutional
Trustee shall, for the benefit of Holders of the Securities, enforce its rights
as holder of the Debentures subject to the rights of the Holders pursuant to
the terms of such Securities and this Declaration.
(h) The Property Trustee shall be authorized to undertake any actions
set forth in ss. 317(a) of the Trust Indenture Act.
(i) Subject to this Section 3.8, the Institutional Trustee shall have
none of the duties, liabilities, powers or the authority of the Regular
Trustees set forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust
set out in Section 3.3.
SECTION 3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF THE INSTITUTIONAL TRUSTEE.
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing or waiver 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 (that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, 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
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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 on their face they conform
to the requirements of this Declaration;
(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 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 fiduciary accounts generally, subject to the
protections and limitations on liability afforded to the Institutional
Trustee under this Declaration, the Business Trust Act 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 3.8(c)(i) and except to the extent
otherwise required by law; and
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall
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the Institutional Trustee be liable for any default or misconduct of
the Regular Trustees or the Sponsor.
SECTION 3.10 CERTAIN RIGHTS OF INSTITUTIONAL TRUSTEE.
(a) Subject to the provisions of Section 3.9:
(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) any direction or act of the Sponsor or the Regular
Trustees contemplated by this Declaration shall be sufficiently
evidenced by a Direction or an Officers' Certificate;
(iii) 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 which,
upon receipt of such request, shall be promptly delivered by the
Sponsor or the Regular Trustees;
(iv) the Institutional Trustee shall have no duty to see
to any recording, filing or registration of any instrument (including
any financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel 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 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;
(vi) 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, unless such
Holder shall have provided to the Institutional Trustee security and
indemnity, reasonably satisfactory to the Institutional Trustee,
against the costs, expenses (including 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)(vi) 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;
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(vii) the Institutional Trustee shall be under no obligation
to conduct an investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document, but the
Institutional Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit;
(viii) 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 Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder;
(ix) 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;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder, the Institutional Trustee (i) may request
instructions from the Holders of the Securities which instructions may
only be given by the Holders of the same proportion in liquidation
amount of the Securities as would be entitled to direct the
Institutional Trustee under the terms of the Securities in respect of
such remedy, right or action, (ii) may refrain from enforcing such
remedy or right or taking such other action until such instructions
are received, and (iii) shall be protected in conclusively relying on
or acting in or accordance with such instructions;
(xi) 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
(xii) the Institutional Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith,
without negligence, and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the 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.
SECTION 3.11 DELAWARE TRUSTEE.
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Trustees (except as required under the Business Trust Act) described in
this
21
Declaration. Except as set forth in Section 5.2, the Delaware Trustee shall be
a Trustee for the sole and limited purpose of fulfilling the requirements of
ss. 3807 of the Business Trust Act. In the event that the Delaware Trustee
shall at any time be required to take any action or perform any duty hereunder,
the Delaware Trustee shall be entitled to the benefits of Section
3.9(b)(ii)(viii) and Section 3.10. No implied covenants or obligations shall be
read into this Declaration against the Delaware Trustee.
SECTION 3.12 EXECUTION OF DOCUMENTS.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, a majority of or, if there are
only two, any Regular Trustee or, if there is only one, such Regular Trustee is
authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b)(i),
including any amendments thereto, shall be signed by all of the Regular
Trustees.
SECTION 3.13 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 DURATION OF TRUST.
The Trust, unless terminated pursuant to the provisions of Article
VIII hereof, shall dissolve on February 24, 2005.
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 corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the
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 if the Trust is not the surviving entity:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of
the Trust under the Securities; or
(B) substitutes for the Preferred Securities other
securities having substantially the same terms as the
Preferred Securities (the "Successor Securities"), so long
as the Successor Securities rank the same as the Preferred
Securities rank with respect to
22
Distributions and payments upon liquidation, redemption,
repayment and otherwise and substitutes for the Common
Securities other securities having substantially the same
terms as the Common Securities (the "Successor Common
Securities"), so long as the Successor Common Securities
rank the same as the Common Securities rank with respect to
Distributions and payments upon liquidation, redemption,
repayment and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee
of the Successor Entity that possesses the same powers and duties as
the Institutional Trustee as the holder of the Debentures;
(iii) if necessary, the Preferred Securities or any Successor
Securities will be listed, or any Successor Securities will be listed
upon notification of issuance, on any national securities exchange or
with another organization on which the Preferred Securities are then
listed or quoted;
(iv) such merger, consolidation, amalgamation or
replacement does not cause the Preferred Securities (including any
Successor Securities) to be downgraded by any nationally recognized
statistical rating organization;
(v) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities and
any Successor Common Securities) in any material respect (other than
with respect to any dilution of such Holders' interests in the new
entity);
(vi) such Successor Entity has a purpose identical to that of
the Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a nationally
recognized 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 rights, preferences
and privileges of the Holders of the Securities (including
any Successor Securities) in any material respect (other than
with respect to any dilution of the Holders' interest in the
new entity);
(B) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor the
Successor Entity will be required to register as an
Investment Company; and
(C) following such merger, consolidation,
amalgamation or replacement, the Trust (or the Successor
Entity) will continue to be classified as a grantor trust for
United States federal income tax purposes;
(viii) the Sponsor guarantees the obligations of such
Successor Entity under the Successor Securities at least to the extent
provided by the Securities Guarantees; and
(ix) there shall have been furnished to the Institutional
Trustee an Officer's Certificate and an Opinion of Counsel, each to
the extent that all conditions precedent in this Declaration to such
transaction have been satisfied.
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(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 IV
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 amount at least equal to 3.0% of the
capital of the Trust, at the same time as the Preferred Securities are sold.
SECTION 4.2 RIGHTS AND RESPONSIBILITIES OF THE SPONSOR.
In connection with the issue, sale and, if necessary, the remarketing
of the Preferred Securities, the Sponsor shall have the exclusive right and
responsibility to engage in the following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Preferred Securities,
including any amendments thereto;
(b) if necessary, to determine the States in which to take appropriate
action to qualify or register for sale all or part of the FELINE PRIDES 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;
(c) if necessary, to prepare for filing by the Trust of an application
to the New York Stock Exchange or any other national stock exchange or the
Nasdaq National Market for listing upon notice of issuance of any Preferred
Securities;
(d) if necessary, to prepare for filing by the Trust with the
Commission of a registration statement on Form 8-A relating to the registration
of the Preferred Securities under Section 12(b) of the Exchange Act, including
any amendments thereto; and
(e) to negotiate the terms of the Remarketing Agreement, the
Remarketing Underwriting Agreement, the Underwriting Agreement and the Pricing
Agreement providing for the sale of the FELINE PRIDES.
SECTION 4.3 RIGHT TO PROCEED.
The Sponsor acknowledges the rights of Holders to institute a Direct
Action as set forth in Section 3.8(e) hereto.
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SECTION 4.4 EXPENSES.
In connection with the offering, sale and issuance of the Debentures
to the Institutional Trustee and in connection with the sale of the Securities
by the Trust, the Sponsor, in its capacity as borrower with respect to the
Debentures, shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Debentures, including commissions to the underwriters payable
pursuant to the Underwriting Agreement and Pricing Agreement and compensation
of the Trustee under the Indenture in accordance with the provisions of the
Indenture;
(b) be responsible for and shall pay all debts and obligations (other
than with respect to the Securities) and all costs and expenses of the Trust
(including, but not limited to, costs and expenses relating to the
organization, maintenance and dissolution of the Trust, the offering, sale and
issuance of the Securities (including commissions to the underwriters in
connection therewith), the fees and expenses (including reasonable counsel fees
and expenses) of the Institutional Trustee, the Delaware Trustee and the
Regular Trustees (including any amounts payable under Article X of this
Declaration), the costs and expenses relating to the operation of the Trust,
including, without limitation, costs and expenses of accountants, attorneys,
statistical or bookkeeping services, expenses for printing and engraving and
computing or accounting equipment, paying agent(s), registrar(s), transfer
agent(s), duplicating, travel and telephone and other telecommunications
expenses and costs and expenses incurred in connection with the acquisition,
financing, and disposition of Trust assets and the enforcement by the
Institutional Trustee of the rights of the Holders of the Securities;
(c) be primarily liable for any indemnification obligations arising
under Section 10.4 with respect to this Declaration; and
(d) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and
expenses with respect to such taxes of the Trust.
The Sponsor's obligations under this Section 4.4 shall be for the
benefit of, and shall be enforceable by, any person to whom such debts,
obligations, costs, expenses and taxes are owed (a "Creditor") whether or not
such Creditor has received notice hereof. Any such Creditor may enforce the
Sponsor's obligations under this Section 4.4 directly against the Sponsor and
the Sponsor irrevocably waives any right or remedy to require that any such
Creditor take any action against the Trust or any other Person before
proceeding against the Sponsor. The Sponsor agrees to execute such additional
agreements as may be necessary or desirable in order to give full effect to the
provisions of this Section 4.4.
ARTICLE V
TRUSTEES
SECTION 5.1 NUMBER OF TRUSTEES.
The number of Trustees initially shall be four (4), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees; and
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(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the holders of a majority in liquidation
amount of the Common Securities voting as a class at a meeting of the Holders
of the Common Securities; provided, however, that, the number of Trustees shall
in no event be less than two (2), provided further that (1) one Trustee, shall
meet the requirements of Section 5.2 (a) and (b); (2) there shall be at least
one Trustee who is an employee or officer of, or is affiliated with the Sponsor
(a "Regular Trustee"); and (3) one Trustee shall be the Institutional Trustee
for so long as this Declaration is required to qualify as an indenture under
the Trust Indenture Act, and such Institutional Trustee may also serve as
Delaware Trustee if it meets the applicable requirements.
SECTION 5.2 DELAWARE TRUSTEE.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements of
applicable law, provided that, if the 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.
(c) The initial Delaware Trustee shall be:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
SECTION 5.3 INSTITUTIONAL TRUSTEE; ELIGIBILITY.
(a) There shall at all times be one Trustee which shall act as
Institutional Trustee for so long as this Declaration is required to qualify as
an Indenture under the Trust Indenture Act, which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted
by the Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 200 million
U.S. dollars ($200,000,000), and subject to supervision or examination
by Federal, State, Territorial or District of Columbia authority. If
such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the supervising or examining
authority referred to above, then for the purposes of this Section
5.3(a)(ii), the combined capital and surplus of such corporation shall
be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
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(b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in Section
5.6(c).
(c) If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of ss. 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 ss. 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of ss. 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee and the Indenture shall be
deemed to be specifically described in this Declaration and the Indenture for
purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.
(e) The initial Institutional Trustee shall be:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
SECTION 5.4 CERTAIN QUALIFICATIONS OF REGULAR TRUSTEES AND DELAWARE TRUSTEE
GENERALLY.
Each Regular Trustee 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 REGULAR TRUSTEES.
The initial Regular Trustees shall be:
Michael P. Monaco
James E. Buckman
(a) Except as otherwise expressly set forth in this Declaration and
except if a meeting of the Regular Trustees is called with respect to any
matter over which the Regular Trustees have power to act, any power of the
Regular Trustees may be exercised by, or with the consent of, any one such
Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, the registration statement referred to
in Section 3.6, including any amendments thereto, shall be signed by all of the
Regular Trustees; and
(c) a Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purposes of signing any documents that the Regular Trustees
have power and authority to cause the Trust to execute pursuant to Section 3.6.
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SECTION 5.6 APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the
Holders of a Majority in liquidation amount of the Common Securities
voting as a class at a meeting of the Holders of the Common
Securities.
(b) (i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.6(a) until a successor
Institutional Trustee possessing the qualifications to act as
Institutional Trustee under Sections 5.2 and 5.3 (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 Regular Trustees and the
Sponsor; and
(ii) The Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 5.6(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under
Sections 5.2 and 5.4 (a "Successor Delaware Trustee") has been
appointed and has accepted such appointment by written instrument
executed by such Successor Delaware Trustee and delivered to the
Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until such
Trustee's successor shall have been appointed or until such Trustee's death,
removal or resignation. Any Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing signed by the
Trustee and delivered to the Sponsor and the Trust, which resignation shall
take effect upon such delivery or upon such later date as is specified therein;
provided, however, that:
(i) no such resignation of the Trustee that acts as the
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 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 all reasonable
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 5.6.
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(e) If no Successor Institutional Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.6 within 60 days after delivery to the Sponsor and the Trust of an
instrument of resignation, the resigning Institutional Trustee or Delaware
Trustee, 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 and prescribe, 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) At the time or resignation of removal of the Institutional Trustee
or the Delaware Trustee, the Sponsor shall pay to such Trustee any amounts that
may be owed to such Trustee pursuant to Section 10.4.
SECTION 5.7 VACANCIES AMONG TRUSTEES.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees
is increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two Regular Trustees, a majority of the Regular Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.6.
SECTION 5.8 EFFECT OF VACANCIES.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee
shall not operate to dissolve, terminate or annul the Trust. Whenever a vacancy
among the Regular Trustees shall occur, until such vacancy is filled by the
appointment of a Regular Trustee in accordance with Section 5.6, the Regular
Trustees in office, regardless of their number, shall have all the powers
granted to the Regular Trustees and shall discharge all the duties imposed upon
the Regular Trustees by this Declaration.
SECTION 5.9 MEETINGS.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than
48 hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 24 hours before a meeting. Notices shall contain a brief
statement of the time, place and anticipated purposes of the meeting. The
presence (whether in person or by telephone) of a Regular Trustee at a meeting
shall constitute a waiver of notice of such meeting except where a Regular
Trustee attends a meeting for the express purpose of objecting to the
transaction of any activity on the ground that the meeting has not been
lawfully called or convened. Unless provided otherwise in this Declaration, any
action of the Regular Trustees may be taken at (i) a meeting by vote of a
majority of the Regular Trustees present (whether in person or by telephone)
and eligible to vote with respect to such matter, provided that a Quorum is
present, or (ii) without a meeting by
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the unanimous written consent of the Regular Trustees. In the event there is
only one Regular Trustee, any and all action of such Regular Trustee shall be
evidenced by a written consent of such Regular Trustee.
SECTION 5.10 DELEGATION OF POWER.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
SECTION 5.11 MERGER, CONVERSION. CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the 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 corporation 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 corporation 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 corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 DISTRIBUTIONS.
Holders shall receive Distributions (as defined herein) in accordance
with the applicable terms of the relevant Holder's Securities. Distributions
shall be made on the Preferred Securities and the Common Securities in
accordance with the preferences set forth in their respective terms. If and to
the extent that the Debenture Issuer makes 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 it has
actually received such funds which are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
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ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 GENERAL PROVISIONS REGARDING SECURITIES.
(a) The Regular Trustees shall, on behalf of the Trust, issue one
class of preferred securities representing undivided beneficial interests in
the assets of the Trust having such terms as are set forth in Annex I (the
"Preferred Securities") and one class of 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
Preferred Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual or facsimile signature of
any present or any future Regular Trustee. In case any Regular Trustee who
shall have signed any of the Securities shall cease to be such Regular Trustee
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 Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Certificate, shall be the Regular Trustees of the Trust,
although at the date of the execution and delivery of the Declaration any such
person was not such a Regular Trustee. Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their execution
thereof, and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements as the Regular Trustees may deem
appropriate, or as may be required to comply with any law or with any rule or
regulation of any stock exchange on which Securities may be listed, or to
conform to usage.
(c) 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.
(d) 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.
(e) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and
shall be bound by, this Declaration.
SECTION 7.2 PAYING AGENT.
In the event that the Preferred Securities are not in book-entry only
form, the Trust shall maintain an office or agency where the Preferred
Securities may be presented for payment ("Paying Agent"), and any such Paying
Agent shall comply with Section 317(b) of the Trust Indenture Act. The Trust
may appoint the Paying Agent and may appoint one or more additional paying
agents in such other locations as it shall determine. The term "Paying Agent"
includes any additional paying agent. The Trust may change any Paying Agent
without prior notice to any Holder. The Trust shall notify the Institutional
Trustee of the name and address of any Paying Agent not a party to this
Declaration. If the Trust fails to appoint or maintain another entity as Paying
Agent, the Institutional Trustee shall act as such. The Trust or any of its
Affiliates (including
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the Sponsor) may act as Paying Agent. The Institutional Trustee at its
Corporate Trust Office shall initially act as Paying Agent for the Preferred
Securities and the Common Securities. The Trust shall maintain in Wilmington,
Delaware, an office or agency where Preferred Securities may be presented for
registration of transfer ("Registrar"). The Registrar shall keep a register of
the Preferred Securities and of their transfer. The Trust may appoint the
Registrar, the Paying Agent and the Exchange Agent and may appoint one or more
co-registrars, on or more additional paying agents and one or more additional
exchange agents in such other locations as it shall determine. The term
"Registrar" includes any additional registrar. The Trust may change any
Registrar or co-registrar without prior notice to any Holder. The Trust shall
notify the Institutional Trustee of the name and address of any Agent not a
party to this Declaration. If the Trust fails to appoint or maintain another
entity as Registrar, the Institutional Trustee shall act as such. The Trust or
any of its Affiliates may act as Registrar. The Trust shall act as Registrar
for the Common Securities.
Notwithstanding Sections 3.69b)(vi) and 3.6(l), the Trust initially
appoints the Institutional Trustee as Registrar for the Preferred Securities
and authorizes it to execute and deliver letters, documents and instruments
with DTC and other Clearing Agencies relating to the Preferred Securities.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 TERMINATION OF TRUST.
(a) The Trust shall terminate:
(i) upon a Termination Event;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor; 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 Holder of the Common Securities, the Sponsor or the Trust;
(iv) upon the occurrence and continuation of an Investment
Company Event pursuant to which the Trust shall have been dissolved in
accordance with the terms of the Securities and all of the Debentures
endorsed thereon shall have been distributed to the Holders of
Securities in exchange for all of the Securities;
(v) when all 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; or
(vi) with the consent of all of the Regular Trustees and the
Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a) and upon completion of the winding-up of the
Trust and its termination, the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
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(c) The provisions of Section 4.4 and Article X shall survive the
termination of the Trust.
ARTICLE IX
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) Subject to this Article IX, Preferred Securities shall be freely
transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party may
only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that, any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States
federal income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the
transferee would become an Investment Company.
SECTION 9.2 TRANSFER OF CERTIFICATES.
The Regular Trustees 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 Regular Trustees 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 Regular Trustees 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 satisfactory to the Regular Trustees
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 Regular Trustees. 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 SECURITY HOLDERS.
The Trustees may treat the Person in whose name any Certificate shall
be registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
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SECTION 9.4 BOOK ENTRY INTERESTS.
The Preferred Securities Certificates, on original issuance, in
addition to being issued in the form of one or more definitive, fully
registered Preferred Securities Certificate (each a "Definitive Preferred
Securities Certificate") registered initially in the books and records of the
Trust in the name of The First National Bank of Chicago, as Purchase Contract
Agent, will be issued in the form of one or more, fully registered, global
Preferred Security Certificates (each a "Global Certificate"), to be delivered
to DTC, the initial Clearing Agency, by, or on behalf of, the Trust. Such
Global Certificate(s) shall initially be registered on the books and records of
the Trust in the name of Cede & Co., the nominee of DTC, and no Preferred
Security Beneficial Owner will receive a definitive Preferred Security
Certificate representing such Preferred Security Beneficial Owner's interests
in such Global Certificate(s), except as provided in Section 9.7. Except for
the Definitive Preferred Security Certificates as specified herein and the
definitive, fully registered Preferred Securities Certificates, if any, that
have been issued to the Preferred Security Beneficial Owners pursuant to
Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment of
Distributions on the Global Certificate(s) and receiving approvals, votes or
consents hereunder) as the Holder of the Preferred Securities and the sole
holder of the Global Certificate(s) and shall have no obligation to the
Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this Section
9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants to
receive and transmit payments of Distributions on the Global Certificates to
such Clearing Agency Participants. DTC will make book entry transfers among the
Clearing Agency Participants; provided, that, solely for the purposes of
determining whether the Holders of the requisite amount of Preferred Securities
have voted on any matter provided for in this Declaration, so long as
Definitive Preferred Security Certificates have not been issued, the Trustees
may conclusively rely on, and shall be protected in relying on, any written
instrument (including a proxy) delivered to the Trustees by the Clearing Agency
setting forth the Preferred Security Beneficial Owners' votes or assigning the
right to vote on any matter to any other Persons either in whole or in part.
SECTION 9.5 NOTICES TO CLEARING AGENCY.
Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, unless and until definitive fully
registered Preferred Security Certificates shall have been issued to the
Preferred Security Beneficial Owners pursuant to Section 9.7 or otherwise, the
Regular Trustees shall give all such notices and communications specified
herein to be given to the Preferred Security Holders to the Clearing Agency,
and shall have no notice obligations to the Preferred Security Beneficial
Owners.
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SECTION 9.6 APPOINTMENT OF SUCCESSOR CLEARING AGENCY.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency
with respect to such Preferred Securities.
SECTION 9.7 DEFINITIVE PREFERRED SECURITY CERTIFICATES.
If:
(a) a Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor to
terminate the book entry system through the Clearing Agency with respect to the
Preferred Securities, then:
(c) definitive fully registered Preferred Security Certificates shall
be prepared by the Regular Trustees on behalf of the Trust with respect to such
Preferred Securities; and
(d) upon surrender of the Global Certificate(s) by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees shall
cause definitive fully registered Preferred Securities Certificates to be
delivered to Preferred Security Beneficial Owners 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 fully registered Preferred Security
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to the Regular Trustees, as
evidenced by their execution thereof, and may have such letters, numbers or
other marks of identification or designation and such legends or endorsements
as the Regular Trustees 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 Preferred Securities may be
listed, or to conform to usage.
SECTION 9.8 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If:
(a) any mutilated Certificate should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security or
indemnity as may be required by them to keep each of them and the Trust
harmless,
then, in the absence of notice that such Certificate shall have been acquired
by a protected purchaser, any Regular Trustee 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 9.8,
the Regular Trustees may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
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Any duplicate Certificate issued pursuant to this Section 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.
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 LIABILITY.
(a) Except as expressly set forth in this Declaration, the Debentures,
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 ss. 3803(a) of the Business Trust Act, the Holders of
the Preferred Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 10.2 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable
care by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
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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; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest of
each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to consider such
interests and factors as it desires, including its own interests, and
shall have no duty or obligation to give any consideration to any
interest of or factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and shall
not be subject to any other or different standard imposed by this
Declaration or by applicable law.
SECTION 10.4 INDEMNIFICATION.
(a)(i) The Sponsor shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the Trust) by reason of the fact that he is or was a Company
Indemnified Person against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in
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or not opposed to the best interests of the Trust, and, with respect
to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit
or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the Company Indemnified Person did not act
in good faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the Trust, and, with respect to
any criminal action or proceeding, had reasonable cause to believe
that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Trust to procure a
judgment in its favor by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the
best interests of the Trust and except that no such indemnification
shall be made in respect of any claim, issue or matter as to which
such Company Indemnified Person shall have been adjudged to be liable
to the Trust unless and only to the extent that the Court of Chancery
of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such
expenses which such Court of Chancery or such other court shall deem
proper.
(iii) Any indemnification under paragraphs (i) and (ii) of
this Section 10.4(a) (unless ordered by a court) shall be made by the
Sponsor only as authorized in the specific case upon a determination
that indemnification of the Company Indemnified Person is proper in
the circumstances because he has met the applicable standard of
conduct set forth in paragraphs (i) and (ii). Such determination shall
be made (1) by the Regular Trustees by a majority vote of a quorum
consisting of such Regular Trustees who were not parties to such
action, suit or proceeding, (2) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees
so directs, by independent legal counsel in a written opinion, or (3)
by the Common Security Holder of the Trust.
(iv) Expenses (including attorneys' fees) incurred by a
Company Indemnified Person in defending a civil, criminal,
administrative or investigative action, suit or proceeding referred to
in paragraphs (i) and (ii) of this Section 10.4(a) shall be paid by
the Debenture Issuer in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on
behalf of such Company Indemnified Person to repay such amount if it
shall ultimately be determined that such person is not entitled to be
indemnified by the Debenture Issuer as authorized in this Section
10.4(a). Notwithstanding the foregoing, no advance shall be made by
the Debenture Issuer if a determination is reasonably and promptly
made (i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written
opinion or (iii) the Common Security Holder of the Trust, that, based
upon the facts known to the Regular Trustees, independent legal
counsel or Common Security Holder at the time such determination is
made, such 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
38
conduct was unlawful. In no event shall any advance be made in
instances where the Regular Trustees, independent legal counsel or
Common Security Holder reasonably determine that such person
deliberately breached such person's duty to the Trust or its Common or
Preferred Security Holders.
(v) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other paragraphs of this
Section 10.4(a) shall not be deemed exclusive of any other rights to
which those seeking indemnification and advancement of expenses may be
entitled under any agreement, vote of shareholders or disinterested
directors of the Sponsor or Preferred Security Holders of the Trust or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office. All rights to
indemnification under this Section 10.4(a) shall be deemed to be
provided by a contract between the Sponsor and each Company
Indemnified Person who serves in such capacity at any time while this
Section 10.4(a) is in effect. Any repeal or modification of this
Section 10.4(a) shall not affect any rights or obligations then
existing.
(vi) The Sponsor 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 Sponsor would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a).
(vii) For purposes of this Section 10.4(a), references to
"the Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any person
who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 10.4(a) with respect to the resulting or
surviving entity as such person would have with respect to such
constituent entity if its separate existence had continued.
(viii) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 10.4(a) shall,
unless otherwise provided when authorized or ratified, continue as to
a person who has ceased to be a Company Indemnified Person and shall
inure to the benefit of the successors, heirs, executors and
administrators of such a person.
(b) The Sponsor agrees to indemnify the (i) Institutional Trustee
including in its individual capacity, (ii) the Delaware Trustee (including in
its individual capacity), (iii) any Affiliate of the Institutional Trustee or
the Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Institutional Trustee or 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 to the extent incurred without gross negligence and, in the case of the
Institutional Trustee, pursuant to Section 3.9, negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
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 provisions of this
Section 10.4(b) shall survive the satisfaction and discharge
39
of this Declaration and any resignation or removal of the Institutional Trustee
or the Delaware Trustee, as the case may be.
SECTION 10.5 OUTSIDE BUSINESSES.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the
Trust, shall not be deemed wrongful or improper. No Covered Person, the
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
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
or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 FISCAL YEAR.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 CERTAIN ACCOUNTING MATTERS.
(a) At all times during the existence of the Trust, the Trust shall
keep, or cause to be kept, full books of account, records and supporting
documents, which shall reflect in reasonable detail, each transaction of the
Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes. The books of account and the records
of the Trust shall be examined by and reported upon as of the end of each
Fiscal Year of the Trust by a firm of independent certified public accountants
selected by the Regular Trustees.
(b) The Trust shall cause to be duly prepared and delivered to each of
the Holders of Securities, any annual United States federal income tax
information statement required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustee(s) on behalf of the Trust
shall endeavor to deliver all such statements within 30 days after the end of
each Fiscal Year of the Trust.
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(c) The Regular Trustees on behalf of the Trust 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 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 however, 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 shall be designated by the Regular Trustees; provided,
however, that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.
SECTION 11.4 WITHHOLDING.
The Regular Trustees on behalf of the Trust shall comply with all
withholding requirements under United States federal, state and local law. The
Trust shall request, and the Holders shall provide to the Trust, such forms or
certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably
be requested by the Trust to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Regular Trustees on behalf of the
Trust shall file required forms with applicable jurisdictions and, unless an
exemption from withholding is properly established by a Holder, shall remit
amounts withheld with respect to the Holder to applicable jurisdictions. To the
extent that the Trust is required to withhold and pay over any amounts to any
authority with respect to distributions or allocations to any Holder, the
amount withheld shall be deemed to be a distribution in the amount of the
withholding to the Holder. In the event of any claimed over withholding,
Holders shall be limited to an action against the applicable jurisdiction. If
the amount required to be withheld was not withheld from actual Distributions
made, the Trust may reduce subsequent Distributions by the amount of such
withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 AMENDMENTS.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by the Regular Trustees (or, if there
are more than two Regular Trustees, a majority of the Regular Trustees); and
(i) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, also by the
Institutional Trustee; and
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, also by the
Delaware Trustee;
(b) no amendment shall be made:
41
(i) unless, in the case of any proposed amendment, the
Institutional Trustee shall have first received an Officer's
Certificate from each of the Trust and the Sponsor that such amendment
is permitted by, and conforms to, the terms of this Declaration
(including the terms of the Securities);
(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or immunities of the
Institutional Trustee, the Institutional Trustee shall have first
received:
(A) an Officer's 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;
(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 such time after the Trust has issued any Securities that remain
outstanding, any amendment that would materially and adversely affect the
rights, privileges or preferences of any Holder of Securities may be effected
only with such additional requirements as may be set forth in the terms of such
Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended without
the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the Holders
of a Majority in liquidation amount of the Common Securities;
(f) the rights of the holders of the Common Securities under Article V
to increase or decrease the number of, and appoint and remove Trustees shall
not be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
42
(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;
(iv) to conform to any change in Rule 3a-5 or written change
in interpretation or application of Rule 3a-5 by any legislative body,
court, government agency or regulatory authority which amendment does
not have a material adverse effect on the right, preferences or
privileges of the Holders;
(v) to modify, eliminate and add to any provision of the
Declaration to such extent as may be necessary; and
(vi) cause the Trust to continue to be classified for United
States federal income tax purposes as a grantor trust.
SECTION 12.2 MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY WRITTEN CONSENT.
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms
of the Securities or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading. The Regular Trustees shall call
a meeting of the Holders of such class if directed to do so by the Holders of
at least 10% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing
the Security 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, the terms of the Securities or the
rules of any stock exchange on which the Preferred Securities are
listed or admitted for trading, such vote, consent or approval may be
given at a meeting of the Holders of Securities. Any action that may
be taken at a meeting of the Holders of Securities may be taken
without a meeting if a consent in writing setting forth the action so
taken is signed by the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount that would be
necessary to authorize or take such action at a meeting at which all
Holders of Securities having a right to vote thereon were present and
voting. Prompt notice of the taking of action without a meeting shall
be given to the Holders of Securities entitled to vote who have not
consented in writing. The Regular Trustees may specify that any
written ballot submitted to the Security Holder for the purpose of
taking any action without a meeting shall be returned to the Trust
within the time specified by the Regular Trustees;
43
(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 Regular Trustees or by such other Person that the
Regular Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the
terms of the Securities, the Trust Indenture Act or the listing rules
of any stock exchange on which the Preferred Securities are then
listed or trading otherwise provides, the Regular Trustees, in their
sole discretion, shall establish all other provisions relating to
meetings of Holders of Securities, including notice of the time, place
or purpose of any meeting at which any matter is to be voted on by any
Holders of Securities, waiver of any such notice, action by consent
without a meeting, the establishment of a record date, quorum
requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF 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 to the Trust and
the Sponsor at the time of the Successor Institutional Trustee's acceptance of
its appointment as Institutional Trustee, that:
(a) the Institutional Trustee is a banking corporation, a national
banking association or a bank with trust powers, duly organized, validly
existing and in good standing under the laws of the United States of America or
any State of the United States, with trust power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of, the
Declaration;
(b) the Institutional Trustee satisfies the requirements set forth in
Section 5.3(a);
(c) 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. The 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);
44
(d) the execution, delivery and performance of the Declaration by the
Institutional Trustee does not conflict with or constitute a breach of the
Articles of Organization or By-laws of the Institutional Trustee; and
(e) no consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Institutional Trustee, of the
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:
(a) The Delaware Trustee is a banking corporation or national banking
association, duly organized, validly existing and in good standing under the
laws of the State of Delaware or the United States, as the case may be, with
power and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration;
(b) the execution, delivery and performance by the Delaware Trustee of
the Declaration has been duly authorized by all necessary corporate action on
the part of the Delaware Trustee. The Declaration has been duly executed and
delivered by the Delaware Trustee, and it constitutes a legal, valid and
binding obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(c) No consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee of the Declaration;
and
(d) the execution, delivery and performance of the Declaration by the
Delaware Trustee does not conflict with or constitute a breach of the Articles
of Organization or By-laws of the Delaware Trustee; and
(e) The Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity which has its
principal place of business in the State of Delaware.
ARTICLE XIV
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 registered or certified mail, as follows:
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(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Holders of the Securities):
Cendant Capital I
c/o Cendant Corporation
6 Sylvan Way
P.O. Box 656
Parsippany, New Jersey 07054-0656
(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):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attn: Corporate Trust Administration
(c) if given to the Institutional Trustee, at its Corporate Trust
Office to the attention of Corporate Trust Administration (or such other
address as the Institutional Trustee may give notice of to the Holders of the
Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attn: Corporate Trust Administration
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice to the Trust):
Cendant Corporation
6 Sylvan Way
P.O. Box 656
Parsippany, New Jersey 07054-0656
Attn: 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.
SECTION 14.2 GOVERNING LAW.
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This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 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.
/s/ James E. Buckman
---------------------------------------
James E. Buckman, as Regular Trustee
/s/ Michael Monaco
---------------------------------------
Michael Monaco, as Regular Trustee
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By /s/ Emmett R. Harmon
-------------------------------------
Name Emmett R. Harmon
-----------------------------------
Title Vice President
----------------------------------
WILMINGTON TRUST COMPANY,
as Institutional Trustee
By /s/ Emmett R. Harmon
-------------------------------------
Name Emmett R. Harmon
-----------------------------------
Title Vice President
----------------------------------
CENDANT CORPORATION,
as Sponsor
By /s/ James E. Buckman
-------------------------------------
Name James E. Buckman
-----------------------------------
Title Senior Executive Vice
President and General Counsel
----------------------------------
ANNEX I
TERMS AND CONDITIONS OF
6.45% TRUST ORIGINATED PREFERRED SECURITIES
6.45% TRUST ORIGINATED COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of February 24, 1998 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities and the Common
Securities are set out below (each capitalized term used but not defined herein
has the meaning set forth in the Declaration or, if not defined in the
Declaration, as defined in the Prospectus referred to below):
1. Designation and Number.
(a) Preferred Securities. 29,900,000 Preferred Securities of
the Trust, with an aggregate liquidation amount with respect to the assets of
the Trust of 1.45 Billion Dollars ($1,450,000,000) and a liquidation amount
with respect to the assets of the Trust of $50 per preferred security, are
hereby designated for the purposes of identification only as "6.45% Trust
Originated Preferred Securities" (the "Preferred Securities"). The Preferred
Security Certificates evidencing the Preferred Securities shall be
substantially in the form of Exhibit A-1 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by applicable
law or the rules of any stock exchange on which the Preferred Securities are
listed or to conform to ordinary usage, custom or practice.
(b) Common Securities. Common Securities of the Trust, with
an aggregate liquidation amount with respect to the assets of the Trust of [ ]
Dollars ($__________) and a liquidation amount with respect to the assets of
the Trust of $50 per common security, are hereby designated for the purposes of
identification only as "6.45% Trust Originated Common Securities" (the "Common
Securities"). The Common Security Certificates evidencing the Common Securities
shall be substantially in the form of Exhibit A-2 to the Declaration, with such
changes and additions thereto or deletions therefrom as may be required by
applicable law or to conform to ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed
initially at a rate per annum of 6.45% (the "Coupon Rate") of the stated
liquidation amount of $50 per Security until February 15, 2001, and at the
Reset Rate thereafter, such rates being the rates 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 rate of 7.5% until February 15, 2001, and at the Reset Rate thereafter (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 consisting 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.
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(b) Distributions on the Securities will be cumulative, will
accrue from March 2, 1998, and will be payable quarterly in arrears, on
February 16, May 16, August 16 and November 16 of each year, commencing on May
16, 1998, except as otherwise described below. The Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not
extending, in the aggregate, beyond the maturity date of the Debentures (each
an "Extension Period"). During such Extension Period no interest shall be due
and payable on 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 at the rate of 7.5% until February 15,
2001, and at the Reset Rate thereafter, compounded quarterly during any such
Extension Period (to the extent permitted by applicable law). 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; provided that such Extension Period together with all such previous and
further extensions thereof may not exceed beyond the maturity date of the
Debentures.
(c) Distributions on the Securities will be payable to the
Holders thereof as they appear on the books and records of the Trust at the
close of business on the Business Day immediately preceding each of the
relevant payment dates on the Securities. Subject to any applicable laws and
regulations and the provisions of the Declaration, each such payment in respect
of the Preferred Securities will be made as described under the heading
"Description of the Trust Preferred Securities -- Book Entry Only Issuance -The
Depository Trust Company" in the Prospectus Supplement dated February 24, 1998
to the Prospectus dated February 24, 1998 (collectively, the "Prospectus") of
the Trust relating to the Registration Statement on Form S-3 (file no.
333-45227) of the Sponsor and the Trust. The relevant record dates for the
Common Securities shall be the same record date as for the Preferred
Securities. If the Preferred Securities shall not continue to remain in
book-entry only form or are not in book-entry only form at issuance, the
relevant record dates for the Preferred Securities, shall conform to the rules
of any securities exchange on which the securities are listed and, if none, as
shall be selected by the Regular Trustees, which dates shall be at least more
than one, but less than 60 Business Days before the relevant payment dates,
which payment dates correspond to the interest payment dates on the Debentures.
Distributions payable on any Securities that are not punctually paid on any
Distribution payment date, as a result of the Debenture Issuer having failed to
make a payment under the Debentures, will cease to be payable to the Person in
whose name such Securities are registered on the relevant record date, and such
defaulted Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other specified date
determined in accordance with the Indenture. If any date on which Distributions
are payable on the Securities is not a Business Day, then payment of the
Distribution payable on such date will be made on the next succeeding day that
is a Business Day (and without any 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. So
long as the Holder of any Preferred Securities is the Collateral Agent, the
payment of Distributions on such Preferred Securities held by the Collateral
Agent will be made at such place and to such account as may be designated by
the Collateral Agent.
(d) The Coupon Rate on the Securities (as well as the
interest rate on the Debentures) will be reset on the third Business Day
immediately preceding the Purchase Contract Settlement Date to the Reset Rate
(which reset Rate will be in effect on and after the Purchase Contract
Settlement Date). On the Reset Announcement Date, the Reset Spread and the
Two-Year Benchmark Treasury to be used to determine the Reset Rate will be
announced by the Sponsor. On the Business Day immediately following the Reset
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Announcement Date, the Holders of Securities will be notified of such Reset
Spread and Two-Year Benchmark Treasury by the Sponsor. Such notice shall be
sufficiently given to Holders of Securities if published in an Authorized
Newspaper.
(e) Not later than 10 calendar days nor more than 15
calendar days prior to the Reset Announcement Date, the Sponsor will notify DTC
(as defined herein) or its nominee (or any successor Clearing Agency or its
nominee) by first-class mail, postage prepaid, to notify the Preferred Security
Beneficial Owner or Clearing Agency Participants holding Preferred Securities,
Income PRIDES or Growth PRIDES, of such Reset Announcement Date and the
procedures to be followed by such Holders of Income PRIDES who intend to settle
their obligation under the Purchase Contract with separate cash.
(f) In the event that there is any money or other property
held by or for the Trust that is not accounted for hereunder, such property
shall be distributed Pro Rata (as defined herein) among the Holders of the
Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution of the Trust
(unless a Tax Event Redemption has occurred), the Holders of the Securities on
the date of the dissolution will be entitled to receive out of the assets of
the Trust, after satisfaction of liabilities to creditors, Debentures in an
aggregate principal amount equal to the aggregate stated liquidation amount of
such Securities, with an interest rate equal to the rate of 6.45%, if on or
prior to February 15, 2001, and the Reset Rate thereafter, and bearing accrued
and unpaid interest in an amount equal to the accrued and unpaid Distributions
on such Securities and which shall be distributed on a Pro Rata basis to the
Holders of the Securities in exchange for such Securities (such amount being
"Liquidation Distribution").
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 Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the redemption of the Debentures in whole (but not
in part), at maturity, the proceeds from such redemption shall, after
satisfaction of liabilities to creditors, be simultaneously applied to redeem
Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so redeemed at a redemption price of $50 per
Security plus an amount equal to accrued and unpaid Distributions thereon at
the date of the repayment, payable in cash.
(b) If an Investment Company Event (as defined herein) shall
occur and be continuing the Regular Trustees shall dissolve the Trust and,
after satisfaction of liabilities to creditors, cause Debentures held by the
Institutional Trustee, having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate the rate of
6.45%, if on or prior to February 15, 2001, and the Reset Rate thereafter, and
accrued and unpaid interest equal to accrued and unpaid Distributions on, and
having the same record date for payment as the Securities, to be distributed to
the Holders of the Securities in liquidation of such Holders' interests in the
Trust on a Pro Rata basis, within 90 days following the occurrence of such
Investment Company Event (the "90 Day Period"); provided, however, that, if at
the time there is available to the Trust the opportunity to eliminate, within
the 90 Day Period, the Investment Company Event by taking some ministerial
action, such as filing a form or making an election, or pursuing some other
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similar reasonable measure that will have no adverse effect on the Trust, the
Debenture Issuer, the Sponsor or the Holders of the Securities and will involve
no material cost ("Ministerial Action"), the Regular Trustees will pursue such
Ministerial Action in lieu of dissolution.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of independent counsel experienced in practice under the
Investment Company Act (an "Investment Company Event Opinion") to the effect
that, as a result of the occurrence of a change in law or regulation or a
written change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority (a "Change
in 1940 Act Law"), which Change in 1940 Act Law becomes effective on or after
the date of the Prospectus, there is a more than an insubstantial risk that the
Trust is or will be considered an Investment Company which is required to be
registered under the Investment Company Act.
(c) If a Tax Event shall occur and be continuing, the
Debentures are redeemable at the option of the Debenture Issuer, in whole but
not in part, on not less than 30 days nor more than 60 days notice ("Tax Event
Redemption"). If the Debenture Issuer redeems the Debentures upon the
occurrence and continuance of a Tax Event, the proceeds from such redemption
shall simultaneously be applied by the Trust to redeem the Securities having an
aggregate stated liquidation amount equal to the aggregate principal amount of
the Debentures so redeemed at a redemption price (the "Redemption Price"), per
Security, equal to the Redemption Amount plus any accumulated and unpaid
distributions thereon to the date of such redemption. If, following the
occurrence of a Tax Event, the Debenture Issuer exercises its option to redeem
the Debentures, the Debenture Issuer shall appoint the Quotation Agent to
assemble the Treasury Portfolio in consultation with the Company. To the extent
the Redemption Price is received by the Institutional Trustee, the
Institutional Trustee will distribute, to the record Holder of the Securities
the Redemption Price payable in liquidation of such Holder's interests in the
Trust.
"Tax Event" means the receipt by the Regular Trustees of an opinion of
a nationally recognized independent tax counsel experienced in such matters to
the effect that, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein affecting taxation, (b) any amendment to or change in an interpretation
or application of such laws or regulations by any legislative body, court,
governmental agency or regulatory authority or (c) any interpretation or
pronouncement that provides for a position with respect to such laws or
regulations that differs from the generally accepted position on the date the
Securities are issued, which amendment or change is effective or which
interpretation or pronouncement is announced on or after the date of issuance
of the Securities under the Declaration, there is more than an insubstantial
risk that (i) interest payable by the Debenture Issuer on the Debentures would
not be deductible, in whole or in part, by the Debenture Issuer for federal
income tax purposes or (ii) the Trust would be subject to more than a de
minimis amount of other taxes, duties or other governmental charges.
"Treasury Portfolio" means, with respect to the Applicable Principal
Amount of Debentures (a) if the Tax Event Redemption Date occurs prior to
February 16, 2001, a portfolio of zero-coupon U.S. Treasury Securities
consisting of (i) U.S. Treasury Securities each in the amount of $1,000 payable
on February 15, 2001 in an aggregate amount equal to the Applicable Principal
Amount and (ii) with respect to each scheduled interest payment date on the
Debentures that occurs after the Tax Event Redemption Date, principal or
interest strips of U.S. Treasury Securities which mature on or prior to such
date in an aggregate amount equal to the aggregate interest payment that would
be due on the Applicable Principal Amount of the
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Debentures on such date, and (b) if the Tax Event Redemption Date occurs after
February 16, 2001, a portfolio of zero-coupon U.S. Treasury Securities
consisting of (i) principal or interest strips of U.S. Treasury Securities
which mature on or prior to February 15, 2003 in an aggregate amount equal to
the Applicable Principal Amount and (ii) with respect to each scheduled
interest payment date on the Debentures that occurs after the Tax Event
Redemption Date, principal or interest strips of such U.S. Treasury Securities
which mature on or prior to such date in an aggregate amount equal to the
aggregate interest payment that would be due on the Applicable Principal Amount
of the Debentures on such date.
"Applicable Ownership Interest" means, with respect to an Income
PRIDES and the U.S. Treasury Securities in the Treasury Portfolio, (A) a 1/20,
or 5%, undivided beneficial ownership interest in a U.S. Treasury Security in
the amount of $1,000 included in such Treasury Portfolio payable on February
15, 2001 and (B) for each scheduled interest payment date on the Debentures
that occurs after the Tax Event Redemption Date, a [5]% undivided beneficial
ownership interest in a $1,000 face amount of such U.S. Treasury Security which
is a principal or interest strip maturing on such date.
"Applicable Principal Amount" means either (i) if the Tax Event
Redemption Date occurs prior to February 16, 2001, the aggregate principal
amount of the Debentures corresponding to the aggregate stated liquidation
amount of the Preferred Securities which are components of Income PRIDES on the
Tax Event Redemption Date or (ii) if the Tax Event Redemption occurs on or
after February 16, 2001, the aggregate principal amount of the Debentures
corresponding to the aggregate stated liquidation amount of the Preferred
Securities outstanding on such Tax Event Redemption Date.
"Redemption Amount" means for each Debenture, the product of (i) the
principal amount of such Debenture and (ii) a fraction whose numerator is the
Treasury Portfolio Purchase Price and whose denominator is the Applicable
Principal Amount.
"Treasury Portfolio Purchase Price" means the lowest aggregate price
quoted by a primary U.S. government securities dealer in New York City (a
"Primary Treasury Dealer") to the Quotation Agent on the third Business Day
immediately preceding the Tax Event Redemption Date for the purchase of the
Treasury Portfolio for settlement on the Tax Event Redemption Date.
"Quotation Agent" means (i) Merrill Lynch Government Securities, Inc.
and its respective successors, provided, however, that if the foregoing shall
cease to be a Primary Treasury Dealer, the Sponsor shall substitute therefor
another Primary Treasury Dealer and (ii) any other Primary Treasury Dealer
selected by the Sponsor.
On and from the date fixed by the Regular Trustees for a Tax Event
Redemption or any distribution of Debentures and dissolution of the Trust: (i)
the Securities will no longer be deemed to be outstanding, (ii) The Depository
Trust Company ("DTC") or its nominee (or any successor Clearing Agency or its
nominee) or the record Holder of the Preferred Securities, will receive a
registered global certificate or certificates representing the Debentures to be
delivered upon such distribution and any certificates representing Securities,
except for certificates representing Preferred Securities held by DTC or its
nominee (or any successor Clearing Agency or its nominee), will be deemed to
represent beneficial interests in the Debentures having an aggregate principal
amount equal to the aggregate stated liquidation amount of $50, with an
interest rate of 6.45% if on or prior to February 15, 2001, and at the Reset
Rate thereafter, and accrued and unpaid interest equal to accrued and unpaid
Distributions on such Securities until such certificates are presented to the
Debenture Issuer or its agent for transfer or reissue.
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5. Redemption or Distribution Procedures.
(a) Notice of any redemption (other then in connection with
the maturity of the Debentures) of, or notice of distribution of Debentures in
exchange for, the Securities (a "Redemption/Distribution Notice") will be given
by the Trust by mail to each Holder of Securities to be redeemed or exchanged
not fewer than 30 nor more than 60 days before the date fixed for redemption or
exchange thereof which, in the case of a redemption, will be the Tax Event
Redemption Date. For purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given pursuant to this Section
5(a), a Redemption/Distribution Notice shall be deemed to be given on the day
such notice is first mailed by first-class mail, postage prepaid, to Holders of
Securities. Each Redemption/Distribution Notice shall be addressed to the
Holders of Securities at the address of each such Holder appearing in the books
and records of the Trust. No defect in the Redemption/Distribution Notice or in
the mailing of either thereof with respect to any Holder shall affect the
validity of the redemption or exchange proceedings with respect to any other
Holder.
(b) 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 5 (such notice will be
irrevocable), then (A) while the Preferred Securities are in book-entry only
form, with respect to the Preferred Securities, by 12:00 noon, New York City
time, on the redemption date, 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 by 10:00 a.m. New York City
time on such Redemption Date, the Institutional Trustee will deposit
irrevocably with DTC or its nominee (or any successor Clearing Agency or its
nominee) funds sufficient to pay the applicable Redemption Price with respect
to the Preferred Securities and will give DTC irrevocable instructions and
authority to pay the Redemption Price to the Holders of the Preferred
Securities so called for redemption, and (B) with respect to Preferred
Securities issued in definitive form and Common Securities, 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. Notwithstanding the foregoing, so long
as the Holder of any Preferred Securities is the Collateral Agent or the
Purchase Contract Agent, the payment of the Redemption Price in respect of such
Preferred Securities held by the Collateral Agent or the Purchase Contract
Agent shall be made no later than 12:00 noon, New York City time, on the Tax
Event Redemption Date by check or wire transfer in immediately available funds
at such place and to such account as may be designated by the Collateral Agent
or the Purchase Contract Agent. If a Redemption/Distribution Notice shall have
been given and funds deposited as required, if applicable, then immediately
prior to the close of business on the date of such deposit, or on the
redemption date, as applicable, distributions will cease to accrue on the
Securities so redeemed 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.
Neither the Regular Trustees nor the Trust shall be required to register or
cause to be registered the transfer of any Securities that have been so called
for redemption. If any date fixed for redemption of Securities is not a
Business Day, then payment of the Redemption Price payable on such date will be
made on the next succeeding day that is a Business Day (without any interest or
other payment in respect of any such delay) except that, if such Business Day
falls in the next calendar year, such payment will be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date fixed for repayment. 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
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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 repayment for
purposes of calculating the Redemption Price and such Securities shall cease to
be outstanding.
(c) Redemption/Distribution Notices shall be sent by the
Trust to (A) in respect of the Preferred Securities, the DTC or its nominee (or
any successor Clearing Agency or its nominee) if the Global Certificates have
been issued or, if Definitive Preferred Security Certificates have been issued,
to the Holder thereof, and (B) in respect of the Common Securities, to the
Holder thereof.
(d) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws) the Sponsor or any
of its subsidiaries may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or by private agreement.
6. Repayment at Option of Holders.
(a) If a Failed Remarketing (as described in Section 5.4(b)
of the Purchase Contract Agreement and incorporated herein by reference) has
occurred, each holder of Securities who holds such Securities on the day
immediately following the Purchase Contract Settlement Date, shall have the
right on or after the Business Day immediately following February 16, 2001 to
require the Trust to repay all or a portion of such Securities owned by such
holder (the "Put Option") on March 2, 2001 (the "Put Option Exercise Date"),
upon at least three Business Days' prior notice, at a repayment price of $50
per Security plus an amount equal to the accrued and unpaid Distributions
(including deferred distributions if any) thereon to the date of payment (the
"Put Option Repayment Price").
(b) The Trust shall obtain funds to pay the Put Option
Repayment Price of Securities being repaid under the Put Option through
presentation by the Institutional Trustee, on behalf of the Trust, to the
Debenture Issuer, pursuant to the right of the holder of the Debentures to
require the Debenture Issuer to repay all or a portion of the Debentures on the
Put Option Exercise Date, Debentures in an aggregate principal amount equal to
the aggregate stated liquidation amount of such Securities for repayment on the
Put Option Exercise Date at the Debenture Repayment Price.
(c) In order for the Securities to be repaid on the Put
Option Exercise Date, the Trust must receive on or prior to 4:00 p.m. on the
third Business Day immediately preceding the Put Option Exercise Date, at the
Corporate Trust Office of the Institutional Trustee, the Securities to be
repaid with the form entitled "Option to Elect Repayment" on the reverse
thereof or otherwise accompanying such Security duly completed. Any such notice
received by the Trust shall be irrevocable. All questions as to the validity,
eligibility (including time of receipt) and acceptance of the Securities for
repayment shall be determined by the Trust, whose determination shall be final
and binding.
(d) Payment of the Put Option Repayment Price to Holders of
Securities shall be made at the Corporate Trust Office of the Institutional
Trustee, provided that the Institutional Trustee has received from the
Debenture Issuer a sufficient amount of cash in connection with the related
repayment of the Debenture no later than 1:00 p.m., New York City time, on the
Put Option Exercise Date by check or wire transfer in immediately available
funds at such place and to such account as may be designated by such Holders.
If the Institutional Trustee holds immediately available funds sufficient to
pay the Put Option Repayment Price of such Securities, then, immediately prior
to the close of business on the Put Option Exercise Date, such Securities will
cease to be outstanding and distributions thereon will cease to accrue, whether
or not Securities are delivered to the Institutional Trustee, and all other
rights of the Holder in respect
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of the Securities, including the Holder's right to require the Trust to repay
such Securities, shall terminate and lapse (other than the right to receive the
Put Option Repayment Price but without interest on such Put Option Repayment
Price). Neither the Regular Trustees nor the Trust shall be required to
register or cause to be registered the transfer of any Securities for which
repayment has been elected. If payment of the Put Option Repayment Price in
respect of Securities is (i) improperly withheld or refused and not paid either
by the Institutional Trustee or by the Sponsor as guarantor pursuant to the
Securities Guarantee, or (ii) not paid by the Institutional Trustee as the
result of an Event of Default with respect to the Debentures presented for
repayment as described in paragraph 6(b), Distributions on such Securities will
continue to accrue, from the original Put Option Exercise Date to the actual
date of payment, in which case the actual payment date will be considered the
Put Option Exercise Date for purposes of calculating the Put Option Repayment
Price.
(e) The Debenture Issuer will request, not later than 10 nor
more than 15 calendar days prior to February 13, 2001 (the date on which some
or all of the Preferred Securities could be remarketed in the manner described
in Section 5.4(b) of the Purchase Contract Agreement and incorporated herein by
reference) that DTC notify the Preferred Securities Holders as well as the
Income PRIDES and Growth PRIDES holders of such remarketing and of the
procedures that must be followed if a Holder of Preferred Securities wishes to
exercise such Holder's rights with respect to the Put Option.
7. Voting Rights - Preferred Securities.
(a) Except as provided under Sections 7(b) and 9 and as
otherwise required by law and the Declaration, the Holders of the Preferred
Securities will have no voting rights.
(b) Subject to the requirements set forth in this paragraph,
the Holders of a Majority in liquidation amount of the Preferred Securities,
voting separately as a class may direct the time, method, and place of
conducting any proceeding for any remedy available to the Institutional
Trustee, or the exercise of 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) waiving any past default and its
consequences that is waivable under the Indenture, (iii) exercising any right
to rescind or annul a declaration that the principal of all the Debentures
shall be due and payable, or (iv) consenting to any amendment, modification or
termination of the Indenture or the Debentures where such consent shall be
required, provided, however, that, where a consent under the Indenture
specifically would require the consent or act of the Holders of greater than a
majority of the Holders in principal amount of Debentures affected thereby (a
"Super Majority"), the 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 Preferred Securities which the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding. The Institutional Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Preferred Securities.
Other than with respect to directing the time, method and place of conducting
any remedy available to the 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 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
Debentures after a Holder of Preferred Securities has made a written request,
such Holder of Preferred Securities may, to the fullest extent permitted by
applicable law, institute a legal proceeding directly against the Debenture
Issuer to enforce the Institutional Trustee's rights under the
I-8
Debentures without first instituting a legal proceeding against the
Institutional Trustee or any other Person. Notwithstanding the foregoing, 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 Preferred
Securities may 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 Preferred
Securities of such Holder on or after the respective due date specified in the
Debentures. Except as provided in the preceding sentence, the Holders of
Preferred Securities shall not exercise directly any other remedy available to
the holders of the Debentures.
Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for
such purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of
any matter upon which action by written consent of such Holders is to be taken,
to be mailed to each Holder of record of Preferred Securities. Each such notice
will include a statement setting forth (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 Preferred Securities will be
required for the Trust to repay and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities. Notwithstanding that Holders of Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Preferred Securities that are owned by the Sponsor or any Affiliate of
the Sponsor shall not be entitled to vote or consent and shall, for purposes of
such vote or consent, be treated as if they were not outstanding.
8. Voting Rights - Common Securities.
(a) Except as provided under Sections 7(b) and (c) and
Section 9 and as otherwise required by law and the Declaration, the Holders of
the Common Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in
accordance with Article V of the Declaration, to vote to appoint, remove or
replace any Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after
any Event of Default with respect to the Preferred Securities has been cured,
waived, or otherwise eliminated and subject to the requirements of the second
to last sentence of this paragraph, the Holders of a Majority in liquidation
amount of the Common Securities, voting separately as a class, may direct the
time, method, and place of conducting any proceeding for any remedy available
to the 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 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 specifically would require the consent or act of the
Holders of a Super Majority, the Institutional Trustee may only give such
consent or take such action at the written direction of the Holders
I-9
of at least the proportion in liquidation amount of the Common Securities which
the relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding. Pursuant to this Section 7(c), the Institutional
Trustee shall not revoke any action previously authorized or approved by a vote
of the Holders of the Preferred Securities. Other than with respect to
directing the time, method and place of conducting any remedy available to the
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 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 Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
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.
9. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of
the Declaration, if any proposed amendment to the Declaration provides for, or
the Regular Trustees otherwise propose to effect, (i) any action that would
materially adversely affect the powers, preferences or special rights of the
Securities, whether by way of amendment to the Declaration or otherwise, or
(ii) the dissolution of the Trust, other than as described in Section 8.1 of
the Declaration, then the Holders of outstanding Securities as a class will be
entitled to vote on such amendment or proposal (but not on any other amendment
or proposal) and such amendment or proposal shall not be effective except with
the approval of the Holders of at least a Majority in liquidation amount of the
Securities, voting together as a single class; provided, however, if any
amendment or proposal referred to in clause (i) above would adversely affect
only the Preferred Securities or only the Common Securities, then only the
affected class will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of a
Majority in liquidation amount of such class of Securities.
(b) In the event the consent of the 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, however, that where a consent under the Indenture
specifically would require a
I-10
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 which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding; provided, further, that 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 (i)
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 or (ii) such
action would not reduce or otherwise adversely affect powers of the
Institutional Trustee or cause the Trust to be deemed an "investment company"
which is required to be registered under the Investment Company Act of 1940.
10. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each
Holder of Securities according to the aggregate liquidation amount of the
Securities held by the relevant Holder in relation to the aggregate liquidation
amount of all Securities outstanding unless, in relation to a payment, an Event
of Default under the Declaration has occurred and is continuing, in which case
any funds available to make such payment shall be paid first to each Holder of
the Preferred Securities pro rata according to the aggregate liquidation amount
of Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate
liquidation amount of Common Securities held by the relevant Holder relative to
the aggregate liquidation amount of all Common Securities outstanding.
11. Ranking.
The Preferred Securities rank pari passu and payment thereon shall be
made Pro Rata with the Common Securities except that, where an Event of Default
occurs and is continuing under the Indenture in respect of the Debentures held
by the Institutional Trustee, the rights of Holders of the Common Securities to
payment in respect of Distributions and payments upon liquidation, redemption
and otherwise are subordinated to the rights to payment of the Holders of the
Preferred Securities.
12. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively.
13. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
14. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee or the Common Securities Guarantee (as may be
appropriate), and the Indenture to a Holder without charge on written request
to the Sponsor at its principal place of business.
I-11
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT - This
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 Preferred Security is exchangeable for 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
Preferred Security (other than a transfer of this 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 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 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.]
Certificate Number Number of Preferred Securities
----------- ---------
CUSIP NO.
-------------
Certificate Evidencing Preferred Securities
of
Cendant Capital I
6.45% Trust Originated Preferred Securities
(liquidation amount $50 per Preferred Security)
Cendant Capital I, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that (the
"Holder") is the registered owner of preferred securities of the Trust
representing preferred undivided beneficial interests in the assets of the
Trust designated as the 6.45% Trust Originated Preferred Securities
(liquidation amount $50 per preferred security) (the "Preferred Securities").
The Preferred Securities are transferable on the books and records of the
Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Preferred Securities represented hereby are issued and shall in all
respects be subject to the provisions of the Amended and Restated Agreement of
Trust of the Trust dated as of February 24, 1998, as the same may be amended
from time to time (the "Declaration"), including the designation of the terms
of the Preferred Securities as set forth in Annex I to the Declaration.
Capitalized terms used herein but not defined shall have the meaning given them
in the Declaration. The Holder is entitled to the benefits of the Preferred
Securities Guarantee to the extent provided therein. The Sponsor will provide a
copy of the Declaration, the Preferred Securities Guarantee and the Indenture
to a Holder without charge upon written request to the Trust at its principal
place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Preferred
Securities as evidence of indirect beneficial ownership in the Debentures.
A1-2
IN WITNESS WHEREOF, the Trust has executed this certificate this 2nd day of
March, 1998.
CENDANT CAPITAL I
By:
-----------------------
Name:
---------------------
Title: Regular Trustee
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a
rate per annum of 6.45% (the "Coupon Rate") of the stated liquidation amount of
$50 per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Institutional Trustee. Distributions in arrears
for more than one quarter will bear interest thereon compounded quarterly at
the rate of 6.45% until February 15, 2001, and at the Reset Rate thereafter (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 actually received and holds 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 consisting of twelve 30-day months, and for any period shorter than a full
quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days
elapsed per 30-day month.
Except as otherwise described below, Distributions on the Preferred
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears, on February 16, May 16, August 16 and
November 16 of each year, commencing on May 16, 1998, to holders of record, if
in book-entry only form, one Business Day prior to such payment date, which
payment dates shall correspond to the interest payment dates on the Debentures.
In the event that the Preferred Securities are not in book-entry form, the
Regular Trustees will have the right to select relevant record dates, which
will be more than one Business Day but less than 60 Business Days prior to the
relevant payment dates. 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 beyond the date of
maturity of the Debentures (each an "Extension Period") and, as a consequence
of such deferral, Distributions will also be deferred. Despite such deferral,
quarterly Distributions will continue to accrue with interest thereon at the
rate of % until February 15, 2001, and at the Reset Rate thereafter,
compounded quarterly during any such Extension Period (to the extent permitted
by applicable law). 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; provided that such Extension Period
together with all such previous and further extensions thereof may not exceed
beyond the maturity date of the Debenture.
The Preferred Securities shall be redeemable as provided in the
Declaration.
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Trust to
repay $ stated liquidation amount of the within Preferred Security,
pursuant to its terms, on the "Put Option Exercise Date," together with
distributions thereon accrued but unpaid to the date of repayment, to the
undersigned at:
- -----------------------------------------------------------
(Please print or type Name and Address of the Undersigned)
and to issue to the undersigned, pursuant to the terms of the Declaration, a
new Preferred Security or Preferred Securities representing the remaining
stated liquidation amount of this Preferred Security.
For this Option to Elect Repayment to be effective, the within Preferred
Security with this Option to Elect Repayment duly completed must be received by
the Trust at the Corporate Trust Office of the Institutional Trustee at
Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890, Attention: Corporate Trust Administration.
Dated: Signature:
-------------------------------
Signature Guarantee:
---------------------
Note: The signature to this Option to Elect Repayment must correspond with the
name as written upon the face of the within Preferred Security in every
particular without alternation or enlargement or any change whatsoever.
----------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
agent to transfer this Preferred Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date:
---------------------------
Signature:
----------------------------------
Signature Guarantee:
-----------------------
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
The Common Securities may only be transferred by the
Debenture Issuer and any Related Party to the Debenture Issuer or a Related
Party of the Debenture Issuer; provided that, any such transfer is subject to
the condition precedent that the transferor obtain the written opinion of
nationally recognized independent counsel experienced in such matters that such
transfer would not cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States
federal income tax purposes as a grantor Trust; and
(ii) the Trust would be an Investment Company or the
transferee would become an Investment Company.
Certificate Number Number of Common Securities
------------- ------
Certificate Evidencing Common Securities
of
Cendant Capital I
6.45% Trust Originated Common Securities
(liquidation amount $50 per Common Security)
Cendant Capital I, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that Cendant Corporation
(the "Holder") is the registered owner of common securities of the Trust
representing common undivided beneficial interests in the assets of the Trust
designated as the 6.45% Trust Originated Common Securities (liquidation amount
$50 per common security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued and shall in all respects be subject to the provisions of the
Amended and Restated Declaration of Trust of the Trust dated as of February 24,
1998, as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Common Securities as set forth in
Annex I to the Declaration. Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Common Securities Guarantee to the extent provided therein. The
Sponsor will provide a copy of the Declaration, the Common Securities Guarantee
and the Indenture to a Holder without charge upon written request to the
Sponsor at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities
as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this 2nd
day of March, 1998.
CENDANT CAPITAL I
By:
--------------------------
Name:
------------------------
Title: Regular Trustee
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate
per annum of 6.45% (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 rate of 6.45% until February 15, 2001, and at the Reset Rate thereafter (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 actually received and holds funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.
Except as otherwise described below, distributions on the Common
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears, on February 16, May 16, August 16 and
November 16 of each year, commencing on May 16, 1998, to Holders of record one
Business Day prior to such payment dates, which payment dates shall correspond
to the interest payment dates on the Debentures. The Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not
exceeding beyond the date of maturity of the Debentures (each an "Extension
Period") 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
rate of 7.5% until February 15, 2001, and at the Reset Rate thereafter,
compounded quarterly during any such Extension Period. 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;
provided, that such Extension Period together with all such previous and
further extensions thereof may not exceed beyond the maturity date of the
Debentures.
The Common Securities shall be redeemable as provided in the
Declaration.
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Trust to
repay $ stated liquidation amount of the within Common Security, pursuant
to its terms, on the "Put Option Exercise Date," together with distributions
thereon accrued and unpaid to the date of repayment, to the undersigned at:
- ---------------------------------------------------------
(Please print or type Name and Address of the Undersigned)
and to issue to the undersigned, pursuant to the terms of the Declaration, a
new Common Security or Common Securities representing the remaining stated
liquidation amount of this Common Security.
For this Option to Elect Repayment to be effective, the within Common Security
with this Option to Elect Repayment duly completed must be received by the
Trust at the Corporate Trust Office of the Institutional Trustee at Wilmington
Trust Company, Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890, Attention: Corporate Trust Administration.
Dated: Signature:
--------------------------
Signature Guarantee:
---------------
Note: The signature to this Option to Elect Repayment must correspond with the
name as written upon the face of the within Common Security in every particular
without alternation or enlargement or any change whatsoever.
----------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
agent to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
--------------------------------
Signature:
---------------------------------
Signature Guarantee:
-----------------------
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
EXHIBIT B
SPECIMEN OF DEBENTURE
EXHIBIT C
Underwriting Agreement
--------------------------------
PREFERRED SECURITIES GUARANTEE AGREEMENT
CENDANT CAPITAL I
Dated as of March 2, 1998
--------------------------------
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
SECTION 1.1 Definitions and Interpretation.................................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act: Application...............................4
SECTION 2.2 List of Holders of Securities..................................4
SECTION 2.3 Reports by the Preferred Guarantee Trustee.....................5
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee................5
SECTION 2.5 Evidence of Compliance with Conditions Precedent...............5
SECTION 2.6 Events of Default; Waiver......................................5
SECTION 2.7 Event of Default; Notice.......................................5
SECTION 2.8 Conflicting Interests..........................................5
ARTICLE III
POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee...........6
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee..................7
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee..........9
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility.......................9
SECTION 4.2 Appointment, Removal and Resignation of Preferred
Guarantee Trustees...........................................9
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee.....................................................10
SECTION 5.2 Waiver of Notice and Demand...................................10
SECTION 5.3 Obligations Not Affected......................................10
SECTION 5.4 Rights of Holders.............................................11
SECTION 5.5 Guarantee of Payment..........................................12
SECTION 5.6 Subrogation...................................................12
SECTION 5.7 Independent Obligations.......................................12
i
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions....................................12
SECTION 6.2 Ranking.......................................................13
ARTICLE VII
TERMINATION
SECTION 7.1 Termination...................................................13
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation...................................................13
SECTION 8.2 Indemnification...............................................14
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns........................................14
SECTION 9.2 Amendments....................................................14
SECTION 9.3 Notices.......................................................14
SECTION 9.4 Benefit.......................................................15
SECTION 9.5 Governing Law.................................................15
ii
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated
as of March 2, 1998, is executed and delivered by Cendant Corporation, a
Delaware corporation (the "Guarantor"), and Wilmington Trust Company, as
trustee (the "Preferred Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Preferred Securities (as defined
herein) of Cendant Capital I, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of February 24, 1998, among the trustees of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof 29,900,000 preferred securities, liquidation amount
$50 per preferred security, having an aggregate liquidation amount of
$1,541,237,150 designated the 6.45% Trust Originated Preferred Securities (the
"Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") in substantially identical terms
to this Preferred Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein), except that if an Event of Default (as
defined in the Declaration), has occurred and is continuing, the rights of
holders of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated to the rights of Holders to receive
Guarantee Payments under this Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder, which
purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor
executes and delivers this Preferred Securities Guarantee for the benefit of
the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Preferred Securities Guarantee but
not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) a term defined anywhere in this Preferred Securities Guarantee
has the same meaning throughout;
(c) all reference to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities
Guarantee as modified, supplemented or amended from time to time;
(d) all references in this Preferred Securities Guarantee to Articles
and Sections are to Articles and Sections of this Preferred
Securities Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Preferred Securities Guarantee, unless
otherwise defined in this Preferred Securities Guarantee or
unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Business Day" means any day other than Saturday, Sunday or any day on
which banking institutions in Wilmington, Delaware are authorized or required
by any applicable law to close.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee
Trustee shall, at any particular time, be principally administered, which
office at the date of execution of this Agreement is located at Wilmington
Trust Company, Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890, Attention: Corporate Trust Administration.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the series of debt securities of the Guarantor
designated the 6.45% Debentures due February 16, 2003 held by the Institutional
Trustee (as defined in the Declaration) of the Issuer.
"Direction" by a person means a written direction signed: (a) if the
Person is a natural person, by that Person; or (b) in any other case in the
name of such Person by one or more Authorized Officers of that Person.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent
not paid or made by the Issuer: (i) any accrued and unpaid Distributions (as
defined in the Declaration) that are required to be paid on such Preferred
Securities to the extent the Issuer shall have funds available therefor, (ii)
the redemption price, including all accrued and unpaid distributions to the
date of redemption (the "Repayment Price") with respect to Preferred Securities
in respect of which the related Debentures have been redeemed by the Company
upon the occurrence of a Tax Event Redemption, to the extent the Issuer has
funds available therefor, and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Issuer (other than in connection
with the distribution of Debentures to the Holders in exchange for Preferred
Securities as provided in the Declaration), the lesser of (a) the aggregate of
the liquidation amount and all accrued and unpaid Distributions on the
Preferred Securities to the date of payment, to the extent the Issuer shall
have funds
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available therefor, and (b) the amount of assets of the Issuer remaining
available for distribution to Holders in liquidation of the Issuer (in either
case, the "Liquidation Distribution"). If an event of default under the
Indenture has occurred and is continuing, the rights of holders of the Common
Securities to receive payments under the Common Securities Guarantee Agreement
are subordinated to the rights of Holders to receive Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee including
in its individual capacity, any Affiliate of the Preferred Guarantee Trustee,
or any officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Preferred Guarantee
Trustee.
"Indenture" means the Indenture dated as of February 24, 1998, among
the Guarantor (the "Debenture Issuer") and The Bank of Nova Scotia Trust
Company of New York, as trustee, and any indenture supplemental thereto
pursuant to which certain debt securities of the Debenture Issuer are to be
issued to the Institutional Trustee of the Issuer.
"Majority in liquidation amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, 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 Preferred
Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by one Authorized Officer of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definition
relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"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.
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"Preferred Guarantee Trustee" means Wilmington Trust Company, until a
Successor Preferred Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Preferred Securities Guarantee and
thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust office of the Preferred
Guarantee 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 Preferred Guarantee 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.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Tax Event Redemption" has the same meaning as defined in Annex I to
the Declaration.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act: Application
(a) This Preferred Securities Guarantee is subject to the provisions
of the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and
(b) If and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 List of Holders of Securities
(a) The Guarantor shall provide the Preferred Guarantee Trustee with a
list, in such form as the Preferred Guarantee Trustee may reasonably require,
of the names and addresses of the Holders ("List of Holders") as of such date,
(i) within 1 Business Day after January 1 and July 1 of each year, and (ii) at
any other time within 30 days of receipt by the Guarantor of a written request
for a List of Holders as of a date no more than 14 days before such List of
Holders is given to the Preferred Guarantee Trustee provided, that the
Guarantor shall not be obligated to provide such List of Holders at any time
the List of Holders does not differ from the most recent List of Holders given
to the Preferred Guarantee Trustee by the Guarantor. The Preferred Guarantee
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its obligations
under Section 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
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SECTION 2.3 Reports by the Preferred Guarantee Trustee
Within 60 days after May 15 of each year, the Preferred Guarantee
Trustee shall provide to the Holders such reports as are required by Section
313 of the Trust Indenture Act, if any, in the form and in the manner provided
by Section 313 of the Trust Indenture Act. The Preferred Guarantee Trustee
shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (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
Preferred Securities Guarantee Trustee is for informational purposes only and
the Preferred Securities Guarantee Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Guarantor's
compliance with any of its covenants hereunder (as to which the Capital
Securities Guarantee Trustee is entitled to rely exclusively on Officers'
Certificates).
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given
in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of all Holders, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Preferred Securities Guarantee, but
no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The Preferred Guarantee Trustee shall, within 90 days after a
responsible Officer of the Preferred Guarantee Trustee obtains actual knowledge
of the occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all such Events of Default actually known
to such Responsible Officer of the Preferred Guarantee Trustee, unless such
defaults have been cured before the giving of such notice, provided, that, the
Preferred Guarantee Trustee shall be protected in withholding such notice if
and so long as a Responsible Officer of the Preferred Guarantee Trustee in good
faith determines that the withholding of such notice is in the interests of the
Holders.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee shall
have received written notice thereof, or a Responsible Officer of the Preferred
Guarantee Trustee charged with the administration of the Declaration shall have
obtained actual knowledge thereof.
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SECTION 2.8 Conflicting Interests
The Declaration and the Indenture shall be deemed to be specifically
described in this Preferred Securities Guarantee for the purposes of clause (i)
of the first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee
(a) This Preferred Securities Guarantee shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders, and the Preferred Guarantee
Trustee shall not transfer this Preferred Securities Guarantee to any Person
except a Holder exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Preferred Guarantee Trustee on acceptance by such Successor Preferred
Guarantee Trustee of its appointment to act as Successor Preferred Guarantee
Trustee. The right, title and interest of the Preferred Guarantee Trustee shall
automatically vest in any Successor Preferred Guarantee Trustee, and such
vesting and cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered pursuant to the appointment of such
Successor Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders.
(c) The Preferred Guarantee Trustee, before the occurrence of any
Event of Default and after the curing or waiver of all Events of Default that
may have occurred, shall undertake to perform only such duties as are
specifically set forth in this Preferred Securities Guarantee, and no implied
covenants or obligations shall be read into this Preferred Securities Guarantee
against the Preferred Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6) and is
actually known to a Responsible Officer of the Preferred Guarantee Trustee, the
Preferred Guarantee Trustee shall exercise such of the rights and powers vested
in it by this Preferred Securities Guarantee, and use the same degree of care
and skill in its exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred Guarantee
Trustee shall be determined solely by the express provisions of this
Preferred Securities Guarantee, and the Preferred Guarantee Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Preferred Securities
Guarantee, and no implied
6
covenants or obligations shall be read into this Preferred
Securities Guarantee against the Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Preferred Guarantee Trustee and conforming to the
requirements of this Preferred Securities Guarantee; but in the case
of any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Preferred Guarantee
Trustee, the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Preferred Guarantee Trustee, unless it shall be proved that the
Preferred Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of not less than a
Majority in liquidation amount of the Preferred Securities relating to
the time, method and place of conducting any proceeding for any remedy
available to the Preferred Guarantee Trustee, or exercising any trust
or power conferred upon the Preferred Guarantee Trustee under this
Preferred Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Guarantee Trustee to expend or risk its own
funds or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of its
rights or powers, if the Preferred Guarantee Trustee shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Preferred Securities Guarantee or indemnity, reasonably satisfactory
to the Preferred Guarantee Trustee, against such risk or liability is
not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee 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) Any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by a
Direction or an Officers' Certificate.
(iii) Whenever, in the administration of this Preferred
Securities Guarantee, the Preferred Guarantee Trustee shall deem it
desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Preferred Guarantee
Trustee (unless other evidence is herein specifically prescribed) may,
in the absence of bad faith on its part, request and
7
conclusively rely upon an Officers' Certificate which, upon
receipt of such request, shall be promptly delivered by the Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument (or any
rerecording, refiling or reregistration thereof).
(v) The Preferred Guarantee Trustee may consult with competent
legal counsel, and the written advice or opinion of such counsel with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or opinion.
Such counsel may be counsel to the Guarantor or any of its Affiliates
and may include any of its employees. The Preferred Guarantee Trustee
shall have the right at any time to seek instructions concerning the
administration of this Preferred Securities Guarantee from any court
of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless
such Holder shall have provided to the Preferred Guarantee Trustee
such security and indemnity, reasonably satisfactory to the Preferred
Guarantee Trustee, against the costs, expenses (including attorneys'
fees and expenses and the expenses of the Preferred Guarantee
Trustees, 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
Preferred Guarantee Trustee; provided that, nothing contained in this
Section 3.2 (a) (vi) shall be taken to relieve the Preferred Guarantee
Trustee, upon the occurrence of an Event of Default, of its obligation
to exercise the rights and powers vested in it by this Preferred
Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, nominees, custodians or attorneys,
and the Preferred Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee or its
agents hereunder shall bind the Holders, and the signature of the
Preferred Guarantee Trustee or its agents alone shall be sufficient
and effective to perform any such action. No third party shall be
required to inquire as to the authority of the Preferred Guarantee
Trustee to so act or as to its compliance with any of the terms and
provisions of this Preferred Securities Guarantee, both of which shall
be conclusively evidenced by the Preferred Guarantee Trustee's or its
agent's taking such action.
(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee Trustee (i)
may request instructions from the Holders of a Majority in liquidation
amount of the Preferred
8
Securities, (ii) may refrain from enforcing such remedy or right
or taking such other action until such instructions are received, and
(iii) shall be protected in conclusively relying on or acting in
accordance with such instructions.
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Preferred Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Preferred Guarantee Trustee does not
assume any responsibility for their correctness. The Preferred Guarantee
Trustee makes no representation as to the validity or sufficiency of this
Preferred Securities Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
(a) There shall at all times be a Preferred Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or
of the District of Columbia, or a corporation or Person permitted by
the Securities and Exchange Commission to act as an institutional
trustee under the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus
of at least 200 million U.S. dollars ($200,000,000), 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 4.1 (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 Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
9
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee
Trustees
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor Preferred Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been appointed
or until its removal or resignation. The Preferred Guarantee Trustee may resign
from office (without need for prior or subsequent accounting) by an instrument
in writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee Trustee
and delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or removal
or resignation of the Preferred Guarantee Trustee pursuant to this Section 4.2,
the Guarantor shall pay to the Preferred Guarantee Trustee all amounts due to
the Preferred Securities Guarantee Trustee accrued to the date of such
termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of
set-off or counterclaim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of
the required amounts by the Guarantor to the Holders or by causing the Issuer
to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a
10
proceeding first against the Issuer or any other Person before proceeding
against the Guarantor, protest, notice of nonpayment, notice of dishonor,
notice of redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be
performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Repayment Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or
in connection with, the Preferred Securities (other than an extension of time
for payment of Distributions, Repayment Price, Liquidation Distribution or
other sum payable that results from the extension of any interest payment
period on the Debentures or any extension of the maturity date of the
Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the intent
of this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain the consent of, the Guarantor with respect to the happening of any of
the foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee.
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(b) If the Preferred Guarantee Trustee fails to enforce this Preferred
Securities Guarantee, any Holder may institute a legal proceeding directly
against the Guarantor to enforce its rights under this Preferred Securities
Guarantee, without first instituting a legal proceeding against the Issuer, the
Preferred Guarantee Trustee or any other Person. Notwithstanding the foregoing,
if the Guarantor has failed to make a Guarantee Payment, a Holder may directly
institute a proceeding against the Guarantor for enforcement of the Preferred
Security Guarantee for such payment. The Guarantor waives any right or remedy
to require that any action on this Preferred Securities Guarantee be brought
first against the Issuer or any other person or entity before proceeding
directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of payment and
not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all rights, if any, of the
Holders against the Issuer in respect of any amounts paid to such Holders by
the Guarantor under this Preferred Securities Guarantee; provided, however,
that the Guarantor shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise any right that it may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Preferred Securities
Guarantee, if, at the time of any such payment, any amounts are due and unpaid
under this Preferred Securities Guarantee. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the
Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, if there shall
have occurred an Event of Default or an Event of Default under the Declaration
and written notice of such Event of Default has been given to the Guarantor,
then (a) the Guarantor shall not declare or pay dividends or make any
distribution with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of capital stock of the Guarantor in connection with
the satisfaction by the Guarantor of its obligations under any employee or
agent benefit plans or the satisfaction by the Guarantor of its obligations
pursuant to any contract or security outstanding on the date of such event
requiring the Guarantor to purchase capital stock of the Guarantor, (ii) as a
result of a reclassification of the Guarantor's capital stock or the exchange
or conversion of one class or series of the
12
Guarantor's capital stock for another class or series of the Guarantor's
capital stock, (iii) the purchase of fractional interests in shares of the
Guarantor's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (iv) dividends
or distributions in capital stock of the Guarantor (or rights to acquire
capital stock) or repurchases or redemptions of capital stock solely from the
issuance or exchange of capital stock or (v) redemptions or purchases of any
rights outstanding under a shareholder rights plan and the declaration of a
dividend of rights in the future), (b) the Guarantor shall not make any payment
of interest, principal or premium, if any, on or repay, repurchase or redeem
any debt securities issued by the Guarantor that rank junior to the Debentures
(to the extent appropriate notice has been given to the holders thereof
effectively blocking such payment or to the extent the failure to make any such
payment is otherwise authorized under the agreements governing such debt), and
(c) the Guarantor shall not make any guarantee payments with respect to the
foregoing (other than payments pursuant to the Guarantee or the Common
Securities Guarantee) to the extent appropriate notice has been given to the
beneficiaries thereof effectively blocking such payment or to the extent the
failure to make any such payment is otherwise authorized under the agreements
governing such guarantee payments.
SECTION 6.2 Ranking
This Preferred Securities Guarantee will constitute a senior unsecured
obligation of the Guarantor and, at all times when an Event of Default has
occurred and is continuing under the Declaration, will rank:
(i) pari passu with all of the Guarantor's senior unsecured
obligations except those made subordinate hereto by their terms; and
(ii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Preferred Securities Guarantee shall terminate upon (i) full
payment of the Repayment Price of all Preferred Securities, (ii) upon the
distribution of the Debentures to all Holders or (iii) upon full payment of the
amounts payable in accordance with the Declaration upon liquidation of the
Issuer. Notwithstanding the foregoing, this Preferred Securities Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder must restore payment of any sums paid under the Preferred
Securities or under this Preferred Securities Guarantee.
13
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor 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 in accordance with this Preferred
Securities Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Preferred Securities Guarantee 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 Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor 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 Guarantor, including information, opinions, reports
or statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders might properly be paid.
SECTION 8.2 Indemnification
(a) To the fullest extent permitted by applicable law, the Guarantor
hereto indemnifies and holds harmless each Indemnified Person from and against
any loss, damage or claim incurred by such Indemnified Person by reason of any
act or omission performed or omitted by such Indemnified Person in good faith
in accordance with this Preferred Securities Guarantee and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Preferred Securities Guarantee,
except that no Indemnified Person shall be entitled to be indemnified in
respect of any loss, damage or claim incurred by such Indemnified Person by
reason of negligence or willful misconduct with respect to such acts or
omissions.
(b) To the fullest extent permitted by applicable law, reasonable
out-of-pocket expenses (including legal fees) incurred by an Indemnified Person
in defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Guarantor prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Guarantor of an
undertaking by or on behalf of the Indemnified Person to repay such amount if
it shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in Section 8.2(a).
(c) The provisions set forth in this Section 8.2 shall survive the
termination of the Preferred Securities Guarantee and any resignation or
removal of the Preferred Guarantee Trustee.
14
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Preferred Securities Guarantee may only be amended with the prior approval of
the Holders of at least a Majority 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 all the outstanding Preferred Securities. The provisions of
Section 12.2 of the Declaration with respect to meetings of Holders apply to
the giving of such approval.
SECTION 9.3 Notices
All notices provided for in this Preferred Securities Guarantee shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust
Administration
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders):
Cendant Corporation
6 Sylvan Way
Parsippany, New Jersey 07054
(c) If given to any Holder, at the address set forth on the books and
records of the Issuer.
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
15
is refused delivery or cannot be delivered because of a changed address of
which no notice was given, such notice or other document shall be deemed to
have been delivered on the date of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Preferred Securities Guarantee is solely for the benefit of the
Holders and, subject to Section 3.1(a), is not separately transferable from the
Preferred Securities.
SECTION 9.5 Governing Law.
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
16
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
CENDANT CORPORATION
as Guarantor
By: /s/ James E. Buckman
-------------------------------
Name: James E. Buckman
Title: Senior Executive Vice
President and General
Counsel
WILMINGTON TRUST COMPANY
as Preferred Guarantee Trustee
By: /s/ Emmett R. Harmon
-------------------------------
Name: Emmett R. Harmon
Title: Vice President
===============================================================================
CENDANT CORPORATION
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS PURCHASE CONTRACT AGENT
-------------------------
PURCHASE CONTRACT AGREEMENT
-------------------------
DATED AS OF MARCH 2, 1998
===============================================================================
TABLE OF CONTENTS
Page
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RECITALS ....................................................................1
ARTICLE I
Definitions and Other Provisions
of General Applications......................................................1
Section 1.1. Definitions................................................1
Section 1.2. Compliance Certificates and Opinions......................12
Section 1.3. Form of Documents Delivered to Agent......................12
Section 1.4. Acts of Holders; Record Dates.............................13
Section 1.5. Notices...................................................15
Section 1.6. Notice to Holders; Waiver.................................16
Section 1.7. Effect of Headings and Table of Contents..................16
Section 1.8. Successors and Assigns....................................16
Section 1.9. Separability Clause.......................................17
Section 1.10. Benefits of Agreement.....................................17
Section 1.11. Governing Law.............................................17
Section 1.12. Legal Holidays............................................17
Section 1.13. Counterparts..............................................18
Section 1.14. Inspection of Agreement...................................18
i
Page
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ARTICLE II
Certificate Forms..........................................................18
Section 2.1. Forms of Certificates Generally..........................18
Section 2.2. Form of Agent's Certificate of Authentication............19
ARTICLE III
The Securities.............................................................20
Section 3.1. Title and Terms; Denominations...........................20
Section 3.2. Rights and Obligations Evidenced by the Certificates.....20
Section 3.3. Execution, Authentication, Delivery and Dating...........21
Section 3.4. Temporary Certificates...................................22
Section 3.5. Registration; Registration of Transfer and Exchange......23
Section 3.6. Book-Entry Interests.....................................24
Section 3.7. Notices to Holders.......................................25
Section 3.8. Appointment of Successor Clearing Agency.................25
Section 3.9. Definitive Certificates..................................25
Section 3.10. Mutilated, Destroyed, Lost and Stolen Certificates.......26
Section 3.11. Persons Deemed Owners....................................27
Section 3.12. Cancellation.............................................28
Section 3.14. Establishment or Reestablishment of Income PRIDES........31
Section 3.15. Transfer of Collateral upon Occurrence of Termination
Event....................................................32
ii
Page
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Section 3.16. No Consent to Assumption...................................33
ARTICLE IV
The Preferred Securities.....................................................33
Section 4.1. Payment of Distribution; Rights to Distributions
Preserved; Distribution Rate Reset; Notice.................33
Section 4.2. Notice and Voting..........................................35
Section 4.3. Distribution of Debentures; Tax Event Redemption...........35
ARTICLE V
The Purchase Contracts.......................................................37
Section 5.1. Purchase of Shares of Common Stock.........................37
Section 5.2. Contract Adjustment Payments...............................39
Section 5.3. Deferral of Payment Dates For Contract Adjustment
Payments...................................................40
Section 5.4. Payment of Purchase Price..................................41
Section 5.5. Issuance of Shares of Common Stock.........................46
Section 5.6. Adjustment of Settlement Rate..............................47
Section 5.7. Notice of Adjustments and Certain Other Events.............53
Section 5.8. Termination Event; Notice..................................54
Section 5.9. Early Settlement...........................................54
Section 5.10. No Fractional Shares.......................................56
Section 5.11. Charges and Taxes..........................................57
iii
Page
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ARTICLE VI
Remedies....................................................................57
Section 6.1. Unconditional Right of Holders to Receive Contract
Adjustment Payments and to Purchase Common Stock..........57
Section 6.2. Restoration of Rights and Remedies........................58
Section 6.3. Rights and Remedies Cumulative............................58
Section 6.4. Delay or Omission Not Waiver..............................58
Section 6.5. Undertaking for Costs.....................................58
Section 6.6. Waiver of Stay or Extension Laws..........................59
ARTICLE VII
The Agent...................................................................59
Section 7.1. Certain Duties and Responsibilities.......................59
Section 7.2. Notice of Default.........................................60
Section 7.3. Certain Rights of Agent...................................60
Section 7.4. Not Responsible for Recitals or Issuance of Securities....61
Section 7.5. May Hold Securities.......................................62
Section 7.6. Money Held in Custody.....................................62
Section 7.7. Compensation and Reimbursement............................62
Section 7.8. Corporate Agent Required; Eligibility.....................63
Section 7.9. Resignation and Removal; Appointment of Successor.........63
iv
Page
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Section 7.10. Acceptance of Appointment by Successor...................64
Section 7.11. Merger, Conversion, Consolidation or Succession to
Business.................................................65
Section 7.12. Preservation of Information; Communications to Holders...65
Section 7.13. No Obligations of Agent..................................66
Section 7.14. Tax Compliance...........................................66
ARTICLE VIII
Supplemental Agreements....................................................67
Section 8.1. Supplemental Agreements Without Consent of Holders.......67
Section 8.2. Supplemental Agreements with Consent of Holders..........68
Section 8.3. Execution of Supplemental Agreements.....................69
Section 8.4. Effect of Supplemental Agreements........................69
Section 8.5. Reference to Supplemental Agreements.....................69
ARTICLE IX
Consolidation, Merger, Sale or Conveyance..................................70
Section 9.1. Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions.................70
Section 9.2. Rights and Duties of Successor Corporation...............70
Section 9.3. Opinion of Counsel Given to Agent........................71
v
Page
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ARTICLE X
Covenants.................................................................71
Section 10.1. Performance Under Purchase Contracts....................71
Section 10.2. Maintenance of Office or Agency.........................71
Section 10.3. Company to Reserve Common Stock.........................72
Section 10.4. Covenants as to Common Stock............................72
Section 10.5. Statements of Officer of the Company as to Default......73
EXHIBIT A Form of Income PRIDES Certificate
EXHIBIT B Form of Growth PRIDES Certificate
EXHIBIT C Instruction to Collateral Agent
EXHIBIT D Instruction to Purchase Contract Agent
EXHIBIT E Notice to Settle with Separate Cash
vi
PURCHASE CONTRACT AGREEMENT, dated as of March 2, 1998, between
Cendant Corporation, a Delaware corporation (the "Company"), and The First
National Bank of Chicago, a national banking association, acting as purchase
contract agent for the Holders of Securities from time to time (the "Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Securities.
All things necessary to make the Purchase Contracts, when the
Certificates are executed by the Company and authenticated, executed on behalf
of the Holders and delivered by the Agent, as provided in this Agreement, the
valid obligations of the Company, and to constitute these presents a valid
agreement of the Company, in accordance with its terms, have been done.
WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed as follows:
ARTICLE I
Definitions and Other Provisions
of General Applications
Section 1.1. Definitions.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular; and nouns
and pronouns of the masculine gender include the feminine and neuter genders;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States;
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(d) the following terms have the meanings given to them in the
Declaration: (i) Applicable Ownership Interest; (ii) Applicable Principal
Amount; (iii) Autho rized Newspaper; (iv) Indenture, (v) Investment Company
Event; (vi) Liquidation Distribution; (vii) Preferred Securities Guarantee;
(viii) Primary Treasury Dealer; (ix) Quotation Agent; (x) Redemption Amount;
(xi) Redemption Price; (xii) Reset Agent; (xiii) Reset Announcement Date;
(xiv) Reset Rate; (xv) Reset Spread; (xvi) Tax Event; (xvii) Tax Event
Redemption; (xviii) Tax Event Redemption Date; (xix) Two-Year Benchmark
Treasury; (xx) Treasury Portfolio; and (xxi) Treasury Portfolio Pur chase
Price; and
(e) the following terms have the meanings given to them in this
Section 1.1(e).
"Act" when used with respect to any Holder, has the meaning specified
in Section 1.4.
"Affiliate"has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"Agent" means the Person named as the "Agent" in the first paragraph
of this instrument until a successor Agent shall have become such pursuant to
the applicable provisions of this Agreement, and thereafter "Agent" shall mean
such Person.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Applicable Market Value" has the meaning specified in Section 5.1.
2
"Bankruptcy Code" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.
"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).
"Board of Directors" means the board of directors of the Company or a
duly authorized committee of that board.
"Board Resolution" means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such certification and
delivered to the Agent.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 3.6.
"Business Day" means any day other than a Saturday, Sunday or any
other day on which banking institutions in New York City (in the State of New
York) are permitted or required by any applicable law to close.
"Cash Settlement" has the meaning set forth in Section 5.4(a)(i).
"Certificate" means an Income PRIDES Certificate or a Growth PRIDES
Certificate.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as a
depositary for the Securities and in whose name, or in the name of a nominee of
that organization, shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Securities.
3
"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 Price" has the meaning specified in Section 5.1.
"Collateral" has the meaning specified in Section 2.1 of the Pledge
Agreement.
"Collateral Agent" means The Chase Manhattan Bank, as Collateral Agent
under the Pledge Agreement until a successor Collateral Agent shall have become
such pursuant to the applicable provisions of the Pledge Agreement, and
thereafter "Collateral Agent" shall mean the Person who is then the Collateral
Agent thereunder.
"Collateral Substitution" has the meaning specified in Section 3.13.
"Common Stock" means the Common Stock, par value $1.25, of the Company.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such pursuant
to the applicable provision of this Agreement, and thereafter "Company" shall
mean such successor.
"Contract Adjustment Payments" means the fee payable by the Company in
respect of each Purchase Contract, equal to 1.05% per annum of the Stated
Amount in the case of Income PRIDES and 1.3% per annum of the Stated Amount in
the case of Growth PRIDES, computed on the basis of a 360 day year of twelve 30
day months, plus any Deferred Contract Adjustment Payments accrued pursuant to
Section 5.2.
"Corporate Trust Office" means the principal corporate trust office of
the Agent at which, at any particular time, its corporate trust business shall
be administered, which office at the date hereof is located at One First
National Plaza, Suite 0126, Chicago, IL 60670-0126, Attention: Corporate Trust
Services Division, except that for purposes of Section 10.2, such term shall
mean the office or agency of the Agent in the Borough of Manhattan, the City of
New York, which office at the date hereof is located at 14 Wall Street, Eighth
Floor, New York, NY 10005.
4
"Coupon Rate" means the percentage rate per annum at which each
Debenture will bear interest initially.
"Current Market Price" has the meaning specified in Section 5.6(a)(8).
"Debentures" means the series of debentures of the Company designated
the 6.45% Debentures due February 16, 2003, to be issued under the Indenture as
of the date hereof.
"Declaration" means the Amended and Restated Agreement of Trust of
Cendant Capital I, dated February 24, 1998, among the Company, as the sponsor,
the trustees named therein and the holders from time to time of individual
beneficial inter ests in the assets of the Trust.
"Deferred Contract Adjustment Payments" has the meaning specified in
Section 5.3.
"Depositary" means, initially, DTC until another Clearing Agency
becomes its successor.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Early Settlement" has the meaning specified in Section 5.9(a).
"Early Settlement Amount" has the meaning specified in Section 5.9(a).
"Early Settlement Date" has the meaning specified in Section 5.9(a).
"Early Settlement Rate" has the meaning specified in Section 5.9(b).
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.
"Expiration Date" has the meaning specified in Section 1.4.
"Expiration Time" has the meaning specified in Section 5.6(a)(6).
5
"Global Certificate" means a Certificate that evidences all or part of
the Securities and is registered in the name of a Depositary or a nominee
thereof.
"Global Preferred Security Certificate" means a certificate evidencing
the rights and obligations of a Holder in respect of the number of Preferred
Securities specified on such certificate and which is registered in the name of
a Clearing Agency or a nominee thereof.
"Growth PRIDES" means, following the substitution of one or more
Treasury Securities for Preferred Securities or for the Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, as collateral to secure
a holder's obligations under a Purchase Contract, the collective rights and
obligations of a holder of a Growth PRIDES Certificate in respect of such
Treasury Securities, subject in each case to the Pledge thereof, and the
related Purchase Contract.
"Growth PRIDES Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Growth PRIDES specified
on such certificate.
"Growth PRIDES Register" and "Growth PRIDES Registrar" have the
respective meanings specified in Section 3.5.
"Holder," when used with respect to a Security, means the Person in
whose name the Security evidenced by an Income PRIDES Certificate and/or a
Growth PRIDES Certificate is registered in the related Income PRIDES Register
and/or the Growth PRIDES Register, as the case may be.
"Income PRIDES" means the collective rights and obligations of a
Holder of an Income PRIDES Certificate in respect of a Preferred Security or an
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, subject in each case to the Pledge thereof, and the related
Purchase Contract.
"Income PRIDES Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Income PRIDES specified
on such certificate.
"Income PRIDES Register" and "Income PRIDES Registrar" have the
respective meanings specified in Section 3.5.
6
"Indenture" has the meaning set forth in Section 1.1 of the
Declaration.
"Indenture Trustee" means The Bank of Nova Scotia Trust Company of New
York, a national banking association, as trustee under the Indenture, or any
successor thereto.
"Institutional Trustee" means Wilmington Trust Company, as
institutional trustee under the Declaration, or any successor thereto that is a
financial institution unaffiliated with the Company.
"Issuer Order" or "Issuer Request" means a written order or request
signed in the name of the Company by its Chairman of the Board, any Vice
Chairman, its President or a Vice President and by its Treasurer, an Assistant
Treasurer, its Secre tary or an Assistant Secretary, and delivered to the
Agent.
"NYSE" has the meaning specified in Section 5.1.
"Officer's Certificate" means a certificate signed by the Chairman of
the Board, any Vice Chairman of the Board, the President, any Vice President,
the Treasurer, any Assistant Treasurer, the Secretary or any Assistant
Secretary of the Company and delivered to the Agent.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company or an Affiliate
and who shall be reasonably acceptable to the Agent.
"Outstanding Securities," with respect to any Income PRIDES or Growth
PRIDES, means, as of the date of determination, all Income PRIDES or Growth
PRIDES evidenced by Certificates theretofore authenticated, executed and
delivered under this Agreement, except:
(i) If a Termination Event has occurred, (A) Growth PRIDES
and (B) Income PRIDES for which the Stated Amount of the related
Preferred Security or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, or a Liquidation Distribution in respect of
such Preferred Security, as the case may be, has been theretofore
deposited with the Agent in trust for the Holders of such Income
PRIDES;
7
(ii) Income PRIDES and Growth PRIDES evidenced by
Certificates theretofore cancelled by the Agent or delivered to the
Agent for cancel lation or deemed cancelled pursuant to the provisions
of this Agreement; and
(iii) Income PRIDES and Growth PRIDES evidenced by
Certificates in exchange for or in lieu of which other Certificates
have been authenticated, executed on behalf of the Holder and
delivered pursuant to this Agree ment, other than any such Certificate
in respect of which there shall have been presented to the Agent proof
satisfactory to it that such Certificate is held by a bona fide
purchaser in whose hands the Income PRIDES or Growth PRIDES evidenced
by such Certificate are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
number of the Income PRIDES or Growth PRIDES have given any request, demand,
authori zation, direction, notice, consent or waiver hereunder, Income PRIDES
or Growth PRIDES owned by the Company or any Affiliate of the Company shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Agent shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Income PRIDES or
Growth PRIDES which a Responsible Officer of the Agent knows to be so owned
shall be so disregarded. Income PRIDES or Growth PRIDES so owned which have
been pledged in good faith may be regarded as Outstanding Securities if the
pledgee establishes to the satisfaction of the Agent the pledgee's right so to
act with respect to such Income PRIDES or Growth PRIDES and that the pledgee is
not the Company or any Affiliate of the Company.
"Payment Date" means each February 16, May 16, August 16 and November
16, commencing May 16, 1998.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Permitted Investments" has the meaning set forth in Section 1 of the
Pledge Agreement.
8
"Pledge" means the pledge under the Pledge Agreement of the Preferred
Securities, the Treasury Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, in each case constituting a part of the
Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of the date
hereof, by and among the Company, the Collateral Agent and the Agent, on its
own behalf and as attorney-in-fact for the Holders from time to time of the
Securities.
"Predecessor Certificate" means a Predecessor Income PRIDES
Certificate or a Predecessor Growth PRIDES Certificate.
"Predecessor Growth PRIDES Certificate" of any particular Growth
PRIDES Certificate means every previous Growth PRIDES Certificate evidencing
all or a portion of the rights and obligations of the Company and the Holder
under the Growth PRIDES evidenced thereby; and, for the purposes of this
definition, any Growth PRIDES Certificate authenticated and delivered under
Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Growth PRIDES Certificate shall be deemed to evidence the same rights
and obligations of the Com pany and the Holder as the mutilated, destroyed,
lost or stolen Growth PRIDES Certificate.
"Predecessor Income PRIDES Certificate" of any particular Income
PRIDES Certificate means every previous Income PRIDES Certificate evidencing
all or a portion of the rights and obligations of the Company and the Holder
under the Income PRIDES evidenced thereby; and, for the purposes of this
definition, any Income PRIDES Certificate authenticated and delivered under
Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Income PRIDES Certificate shall be deemed to evidence the same rights
and obligations of the Com pany and the Holder as the mutilated, destroyed,
lost or stolen Income PRIDES Certificate.
"Preferred Securities" means the 6.45% Trust Originated Preferred
Securities of the Trust, each having a stated liquidation amount of $50,
representing preferred undivided beneficial interests in the assets of the
Trust.
"Proceeds" has the meaning set forth in Section 1 of the Pledge
Agreement.
"Purchase Contract," when used with respect to any Security, means the
contract forming a part of such Security and obligating the Company to (i) sell
and
9
the Holder of such Security to purchase Common Stock and (ii) pay the
Holder Contract Adjustment Payments, if any, on the terms and subject to the
conditions set forth in Article Five hereof.
"Purchase Contract Settlement Date" means February 16, 2001.
"Purchase Contract Settlement Fund" has the meaning specified in
Section 5.5.
"Purchase Price" has the meaning specified in Section 5.1.
"Purchased Shares" has the meaning specified in Section 5.6(a)(6).
"Record Date" for the distribution and Contract Adjustment Payments
payable on any Payment Date means, as to any Global Certificate, the Business
Day next preceding such Payment Date, and as to any other Certificate, a day
selected by the Company which shall be more than one Business Day but less than
60 Business Days prior to such Payment Date.
"Register" means the Income PRIDES Register and the Growth PRIDES
Register.
"Registrar" means the Income PRIDES Registrar and the Growth PRIDES
Registrar.
"Remarketing Agent" has the meaning specified in Section 5.4.
"Remarketing Agreement" means the Remarketing Agreement dated March 2,
1998 by and between the Company, the Trust, the Remarketing Agent and the
Purchase Contract Agent.
"Remarketing Fee" has the meaning specified in Section 5.4.
"Remarketing Purchase Agreement" has the meaning specified in the
Remarketing Agreement.
"Reorganization Event" has the meaning specified in Section 5.6(b).
10
"Responsible Officer," when used with respect to the Agent, means any
officer of the Agent assigned by the Agent to administer its corporate trust
matters.
"Security" means an Income PRIDES or a Growth PRIDES.
"Senior Indebtedness" means indebtedness of any kind of the Company
unless the instrument under which such indebtedness is incurred expressly
provides that it is on parity with or subordinated in right of payment to the
Contract Adjustment Payments.
"Settlement Rate" has the meaning specified in Section 5.1.
"Stated Amount" means $50.
"Termination Date" means the date, if any, on which a Termination Event
occurs.
"Termination Event" means the occurrence of any of the following
events: (i) at any time on or prior to the Purchase Contract Settlement Date, a
judgment, decree or court order shall have been entered granting relief under
the Bankruptcy Code, adjudicating the Company to be insolvent, or approving as
properly filed a petition seeking reorganization or liquidation of the Company
or any other similar applicable Federal or State law, and, unless such
judgment, decree or order shall have been entered within 60 days prior to the
Purchase Contract Settlement Date, such decree or order shall have continued
undischarged and unstayed for a period of 60 days; or (ii) a judgment, decree
or court order for the appointment of a receiver or liquidator or trustee or
assignee in bankruptcy or insolvency of the Company or of its property, or for
the winding up or liquidation of its affairs, shall have been entered, and,
unless such judgment, decree or order shall have been entered within 60 days
prior to the Purchase Contract Settlement Date, such judgment, decree or order
shall have continued undischarged and unstayed for a period of 60 days, or
(iii) at any time on or prior to the Purchase Contract Settlement Date the
Company shall file a petition for relief under the Bankruptcy Code, or shall
consent to the filing of a bankruptcy proceeding against it, or shall file a
petition or answer or consent seeking reorganization or liquidation under the
Bankruptcy Code or any other similar applicable Federal or State law, or shall
consent to the filing of any such petition, or shall consent to the appointment
of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency
of it or of its property, or shall make an assignment for the benefit of
11
creditors, or shall admit in writing its inability to pay its debts generally
as they become due.
"Threshold Appreciation Price" has the meaning specified in
Section 5.1.
"TIA" means the Trust Indenture Act of 1939, as amended, or any
successor statute.
"Trading Day" has the meaning specified in Section 5.1.
"Treasury Security" means U.S. Treasury securities (CUSIP Number 91283
CD 0) in an amount equal to $1,000 payable on February 15, 2001.
"Trust" means Cendant Capital I, a statutory business trust formed
under the laws of the State of Delaware, or any successor thereto by merger or
consolidation.
"Underwriting Agreement" means the Underwriting Agreement dated Febru
ary 24, 1998 between the Company, the Trust, and Merrill Lynch, Pierce, Fenner
& Smith Incorporated and Chase Securities Inc.
"Vice President" means any vice president, whether or not designated
by a number or a word or words added before or after the title "vice
president."
Section 1.2. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon any
applica tion or request by the Company to the Agent to take any action under
any provision of this Agreement, the Company shall furnish to the Agent an
Officer's Certificate stating that all conditions precedent, if any, provided
for in this Agreement relating to the proposed action have been complied with
and, if requested by the Agent, an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any
provision of this Agreement relating to such particular application or request,
no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement shall include:
12
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he or she has made such examination or investigation as is necessary
to enable such individual to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.3. Form of Documents Delivered to Agent.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
13
Where any Person is required to make, give or execute two or more
applica tions, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
Section 1.4. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Agent and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Agreement and (subject to Section 7.1) conclusive in favor of the Agent and the
Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Agent deems
sufficient.
(c) The ownership of Securities shall be proved by the Income PRIDES
Register or the Growth PRIDES Register, as the case may be.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Certificate shall bind every future
Holder of the same Certificate and the Holder of every Certificate issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Agent or the
Company in reliance thereon, whether or not notation of such action is made
upon such Certificate.
(e) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or
take any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Agreement to be given, made or taken
by Holders of Securities. If any record date is set pursuant to this paragraph,
the Holders of the Outstanding Income PRIDES and the Outstanding Growth PRIDES,
as the case may be, on such record date, and no other Holders, shall be
entitled to take the relevant
14
action with respect to the Income PRIDES or the Growth PRIDES, as the case may
be, whether or not such Holders remain Holders after such record date; provided
that no such action shall be effective hereunder unless taken on or prior to
the applicable Expiration Date by Holders of the requisite number of
Outstanding Securities on such record date. Nothing in this paragraph shall be
construed to prevent the Company from setting a new record date for any action
for which a record date has previously been set pursuant to this paragraph
(whereupon the record date previously set shall automatically and with no
action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite number of Outstanding Securities on the date such action is
taken. Promptly after any record date is set pursuant to this paragraph, the
Company, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to
the Agent in writing and to each Holder of Securities in the manner set forth
in Section 1.6.
With respect to any record date set pursuant to this Section, the
Company may designate any date as the "Expiration Date" and from time to time
may change the Expiration Date to any earlier or later day; provided that no
such change shall be effective unless notice of the proposed new Expiration
Date is given to the Agent in writing, and to each Holder of Securities in the
manner set forth in Section 1.6, on or prior to the existing Expiration Date.
If an Expiration Date is not designated with respect to any record date set
pursuant to this Section, the Company shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
Section 1.5. Notices.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Agreement to
be made upon, given or furnished to, or filed with,
(1) the Agent by any Holder or by the Company shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid, to the
Agent at The First National Bank of Chicago, One First National Plaza,
Suite 0126, Chicago, IL 60670-0126, Atten-
15
tion: Corporate Trust Services Division, or at any other address
previously furnished in writing by the Agent to the Holders and the
Company; or
(2) the Company by the Agent or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid, to the
Company at Cendant Corporation, 6 Sylvan Way, Parsippany, New Jersey
07054, Attention: Corporate Secretary, or at any other address
previously furnished in writing to the Agent by the Company; or
(3) the Collateral Agent by the Agent, the Company or any
Holder shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if made, given, furnished or
filed in writing and personally delivered or mailed, first-class
postage prepaid, addressed to the Collateral Agent at The Chase
Manhattan Bank, 450 West 33rd Street, 15th Floor, New York, NY 10001,
Attention: Corporate Trust Administration, or at any other address
previously furnished in writing by the Collateral Agent to the Agent,
the Company and the Holders; or
(4) the Institutional Trustee by the Company shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid, addressed
to the Institutional Trustee at Wilmington Trust Company, Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890,
Attention: Corporate Trust Administration, or at any other address
previously furnished in writing by the Institutional Trustee to the
Company; or
(5) the Indenture Trustee by the Company shall be sufficient
for every purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished or filed in writing and personally
delivered or mailed, first-class postage prepaid, addressed to the
Indenture Trustee at The Bank of Nova Scotia Trust Company of New
York, or at any other address previously furnished in writing by the
Indenture Trustee to the Company.
Section 1.6. Notice to Holders; Waiver.
16
Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at its address as it appears in the applicable Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Where this Agreement provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Agent, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Agent
shall constitute a sufficient notifica tion for every purpose hereunder.
Section 1.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 1.8. Successors and Assigns.
All covenants and agreements in this Agreement by the Company shall
bind its successors and assigns, whether so expressed or not.
Section 1.9. Separability Clause.
In case any provision in this Agreement or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby.
Section 1.10. Benefits of Agreement.
Nothing in this Agreement or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and, to the
17
extent provided hereby, the Holders, any benefits or any legal or equitable
right, remedy or claim under this Agreement. The Holders from time to time
shall be beneficiaries of this Agreement and shall be bound by all of the terms
and conditions hereof and of the Securities evidenced by their Certificates by
their acceptance of delivery of such Certificates.
Section 1.11. Governing Law.
This Agreement and the Securities shall be governed by and construed
in accordance with the laws of the State of New York.
Section 1.12. Legal Holidays.
In any case where any Payment Date shall not be a Business Day, then
(notwithstanding any other provision of this Agreement or the Income PRIDES
Certificates or the Growth PRIDES Certificates) payment of the Contract
Adjustment Payments, if any, shall not be made on such date, but such payments
shall be made on the next succeeding Business Day with the same force and
effect as if made on such Payment Date, provided that no interest shall accrue
or be payable by the Company or any Holder for the period from and after any
such Payment Date, except that, if such next succeeding Business Day is in the
next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day with the same force and effect as if made on such
Payment Date.
In any case where any Purchase Contract Settlement Date shall not be a
Business Day, then (notwithstanding any other provision of this Agreement, the
Income PRIDES Certificates or the Growth PRIDES Certificates), the Purchase
Contracts shall not be performed on such date, but the Purchase Contracts shall
be performed on the immediately following Business Day with the same force and
effect as if performed on the Purchase Contract Settlement Date.
Section 1.13. Counterparts.
This Agreement may be executed in any number of counterparts by the
parties hereto on separate counterparts, each of which, when so executed and
delivered, shall be deemed an original, but all such counterparts shall
together constitute one and the same instrument.
18
Section 1.14. Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable times
during normal business hours at the Corporate Trust Office for inspection by
any Holder.
ARTICLE II
Certificate Forms
Section 2.1. Forms of Certificates Generally.
The Income PRIDES Certificates (including the form of Purchase
Contract forming part of the Income PRIDES evidenced thereby) shall be in
substantially the form set forth in Exhibit A hereto, with such letters,
numbers or other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may be required by
the rules of any securities exchange on which the Income PRIDES are listed or
any depositary therefor, or as may, consistently herewith, be determined by
the officers of the Company executing such Income PRIDES Certificates, as
evidenced by their execution of the Income PRIDES Certificates.
The definitive Income PRIDES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing the
Income PRIDES evidenced by such Income PRIDES Certificates, consistent with the
provisions of this Agreement, as evidenced by their execution thereof.
The Growth PRIDES Certificates (including the form of Purchase
Contracts forming part of the Growth PRIDES evidenced thereby) shall be in
substantially the form set forth in Exhibit B hereto, with such letters,
numbers or other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may be required by
the rules of any securities exchange on which the Growth PRIDES may be listed
or any depositary therefor, or as may, consistently herewith, be determined by
the officers of the Company executing such Growth PRIDES Certificates, as
evidenced by their execution of the Growth PRIDES Certificates.
19
The definitive Growth PRIDES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing the
Growth PRIDES evidenced by such Growth PRIDES Certificates, consistent with the
provisions of this Agreement, as evidenced by their execution thereof.
Every Global Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the
following form:
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS
REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF.
THIS CERTIFI CATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE
OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN
SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
Section 2.2. Form of Agent's Certificate of Authentication.
The form of the Agent's certificate of authentication of the Income
PRIDES shall be in substantially the form set forth on the form of the Income
PRIDES Certificates.
The form of the Agent's certificate of authentication of the Growth
PRIDES shall be in substantially the form set forth on the form of the Growth
PRIDES Certificates.
20
ARTICLE III
The Securities
Section 3.1. Title and Terms; Denominations.
The aggregate number of Income PRIDES evidenced by Certificates
authenticated, executed on behalf of the Holders and delivered hereunder is
limited to 27,600,000 except for Certificates authenticated, executed and
delivered upon registration of transfer of, in exchange for, or in lieu of,
other Certificates pursuant to Section 3.4, 3.5, 3.10, 3.13, 3.14, 5.9 or 8.5.
The Certificates shall be issuable only in registered form and only in
denominations of a single Income PRIDES or Growth PRIDES and any integral
multiple thereof.
Section 3.2. Rights and Obligations Evidenced by the Certificates.
Each Income PRIDES Certificate shall evidence the number of Income
PRIDES specified therein, with each such Income PRIDES representing the
ownership by the Holder thereof of a beneficial interest in a Preferred
Security or the Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, subject to the Pledge of such Preferred Security or the Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, by such
Holder pursuant to the Pledge Agreement, and the rights and obligations of the
Holder thereof and the Company under one Purchase Contract. The Agent as
attorney-in-fact for, and on behalf of, the Holder of each Income PRIDES shall
pledge, pursuant to the Pledge Agreement, the Preferred Security or the
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
forming a part of such Income PRIDES, to the Collateral Agent and grant to the
Collateral Agent a security interest in the right, title, and interest of such
Holder in such Preferred Security or the Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, for the benefit of the Company, to
secure the obligation of the Holder under each Purchase Contract to purchase
the Common Stock of the Company. Prior to the purchase of shares of Common
Stock under each Purchase Contract, such Purchase Contracts shall not entitle
the Holder of an Income PRIDES Certificates to any of the rights of a holder of
shares of Common Stock, including, without limitation, the right to vote or
receive any dividends or other payments or to consent or to receive notice as
stockholders in respect of the meetings
21
of stockholders or for the election of directors of the Company or for any
other matter, or any other rights whatsoever as stockholders of the Company.
Each Growth PRIDES Certificate shall evidence the number of Growth
PRIDES specified therein, with each such Growth PRIDES representing the
ownership by the Holder thereof of a 1/20 undivided beneficial interest in a
Treasury Security subject to the Pledge of such Treasury Security by such
Holder pursuant to the Pledge Agreement, and the rights and obligations of the
Holder thereof and the Company under one Purchase Contract. Prior to the
purchase, if any, of shares of Common Stock under the Purchase Contracts, such
Growth PRIDES Certificates shall not entitle the Holders of Growth PRIDES
Certificates to any of the rights of a holder of shares of Common Stock,
including, without limitation, the right to vote or receive any dividends or
other payments or to consent or to receive notice as stockholders in respect
of the meetings of stockholders or for the election of directors of the Company
or for any other matter, or any other rights whatsoever as stockholders of the
Company.
Section 3.3. Execution, Authentication, Delivery and Dating.
Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the
execution and delivery of this Agreement, and at any time and from time to time
thereafter, the Company may deliver Certificates executed by the Company to the
Agent for authentication, execution on behalf of the Holders and delivery,
together with its Issuer Order for authentication of such Certificates, and the
Agent in accordance with such Issuer Order shall authenticate, execute on
behalf of the Holders and deliver such Certificates.
The Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents or Treasurer. The signature of any of these officers on
the Certificates may be manual or facsimile.
Certificates bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstand ing that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did
not hold such offices at the date of such Certificates.
22
No Purchase Contract evidenced by a Certificate shall be valid until
such Certificate has been executed on behalf of the Holder by the manual
signature of an authorized signatory of the Agent, as such Holder's
attorney-in-fact. Such signature by an authorized signatory of the Agent shall
be conclusive evidence that the Holder of such Certificate has entered into the
Purchase Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its authentication.
No Certificate shall be entitled to any benefit under this Agreement
or be valid or obligatory for any purpose unless there appears on such
Certificate a certificate of authentication substantially in the form provided
for herein executed by an authorized signatory of the Agent by manual
signature, and such certificate upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder.
Section 3.4. Temporary Certificates.
Pending the preparation of definitive Certificates, the Company shall
execute and deliver to the Agent, and the Agent shall authenticate, execute on
behalf of the Holders, and deliver, in lieu of such definitive Certificates,
temporary Certificates which are in substantially the form set forth in Exhibit
A or Exhibit B hereto, as the case may be, with such letters, numbers or other
marks of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as may be required by the rules of
any securities exchange on which the Income PRIDES or Growth PRIDES are listed,
or as may, consistently herewith, be determined by the officers of the Company
executing such Certificates, as evidenced by their execution of the
Certificates.
If temporary Certificates are issued, the Company will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the Corporate Trust Office, at the expense of the Company and
without charge to the Holder. Upon surrender for cancellation of any one or
more temporary Certificates, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the Holder, and
deliver in exchange therefor, one or more definitive Certificates of like
tenor and denominations and evidencing a like number of Income PRIDES or Growth
PRIDES, as the case may be, as the temporary Certificate or
23
Certificates so surrendered. Until so exchanged, the temporary Certificates
shall in all respects evidence the same benefits and the same obligations with
respect to the Income PRIDES or Growth PRIDES, as the case may be, evidenced
thereby as definitive Certificates.
Section 3.5. Registration; Registration of Transfer and Exchange.
The Agent shall keep at the Corporate Trust Office a register (the
"Income PRIDES Register") in which, subject to such reasonable regulations as
it may prescribe, the Agent shall provide for the registration of Income PRIDES
Certificates and of transfers of Income PRIDES Certificates (the Agent, in such
capacity, the "Income PRIDES Registrar") and a Register (the "Growth PRIDES
Register") in which, subject to such reasonable regulations as it may
prescribe, the Agent shall provide for the registration of the Growth PRIDES
Certificates and transfers of Growth PRIDES Certificates (the Agent, in such
capacity, the "Growth PRIDES Registrar").
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Company shall execute and deliver to the Agent, and
the Agent shall authenticate, execute on behalf of the designated transferee or
transferees, and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of any authorized denominations, like
tenor, and evidencing a like number of Income PRIDES or Growth PRIDES, as the
case may be.
At the option of the Holder, Certificates may be exchanged for other
Certificates, of any authorized denominations and evidencing a like number of
Income PRIDES or Growth PRIDES, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office. Whenever any
Certificates are so surrendered for exchange, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate, execute on behalf of
the Holder, and deliver the Certifi cates which the Holder making the exchange
is entitled to receive.
All Certificates issued upon any registration of transfer or exchange
of a Certificate shall evidence the ownership of the same number of Income
PRIDES or Growth PRIDES, as the case may be, and be entitled to the same
benefits and subject to the same obligations, under this Agreement as the
Income PRIDES or Growth PRIDES, as the case may be, evidenced by the
Certificate surrendered upon such registration of transfer or exchange.
24
Every Certificate presented or surrendered for registration of
transfer or for exchange shall (if so required by the Agent) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Agent duly executed, by the Holder thereof or its attorney
duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Company and the Agent may require payment
from the Holder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Certificates, other than any exchanges pursuant to Sections 3.6 and
8.5 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder and deliver any Certificate
presented or surrendered for registration of transfer or for exchange on or
after the Business Day immediately preceding the earlier of the Purchase
Contract Settlement Date or the Termination Date. In lieu of delivery of a new
Certificate, upon satisfaction of the applicable conditions specified above in
this Section and receipt of appropriate registration or transfer instructions
from such Holder, the Agent shall (i) if the Purchase Contract Settlement Date
has occurred, deliver the shares of Common Stock issuable in respect of the
Purchase Contracts forming a part of the Securities evidenced by such Certifi
cate, (ii) in the case of Income PRIDES, if a Termination Event shall have
occurred prior to the Purchase Contract Settlement Date, transfer the aggregate
Stated Amount of the Preferred Securities or the Treasury Portfolio, as
applicable, evidenced thereby, or (iii) in the case of Growth PRIDES, if a
Termination Event shall have occurred prior to the Purchase Contract Settlement
Date, transfer the Treasury Securities evidenced thereby, in each case subject
to the applicable conditions and in accordance with the applicable provisions
of Article Five hereof.
Section 3.6. Book-Entry Interests.
The Certificates, on original issuance, will be issued in the form of
one or more, fully registered Global Certificates, to be delivered to the
Depositary by, or on behalf of, the Company. Such Global Certificate shall
initially be registered on the books and records of the Company in the name of
Cede & Co., the nominee of the Depositary, and no Beneficial Owner will receive
a definitive Certificate representing such Beneficial Owner's interest in such
Global Certificate, except as provided in Section 3.9. The Agent shall enter
into an agreement with the Depositary if so
25
requested by the Company. Unless and until definitive, fully registered
Certificates have been issued to Beneficial Owners pursuant to Section 3.9:
(a) the provisions of this Section 3.6 shall be in full force
and effect;
(b) the Company shall be entitled to deal with the Clearing
Agency for all purposes of this Agreement (including the payment of Contract
Adjustment Payments, if any, and receiving approvals, votes or consents
hereunder) as the Holder of the Securities and the sole holder of the Global
Certificate(s) and shall have no obligation to the Beneficial Owners;
(c) to the extent that the provisions of this Section 3.6
conflict with any other provisions of this Agreement, the provisions of this
Section 3.6 shall control; and
(d) the rights of the Beneficial Owners shall be exercised
only through the Clearing Agency and shall be limited to those established by
law and agreements between such Beneficial Owners and the Clearing Agency
and/or the Clearing Agency Participants. The Clearing Agency will make book
entry transfers among Clearing Agency Participants and receive and transmit
payments of Contract Adjustment Payments to such Clearing Agency Participants.
Section 3.7. Notices to Holders.
Whenever a notice or other communication to the Holders is required to
be given under this Agreement, the Company or the Company's agent shall give
such notices and communications to the Holders and, with respect to any
Securities registered in the name of a Clearing Agency or the nominee of a
Clearing Agency, the Company or the Company's agent shall, except as set forth
herein, have no obligations to the Beneficial Owners.
Section 3.8. Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Securities, the Company may, in its
sole discretion, appoint a successor Clearing Agency with respect to the
Securities.
26
Section 3.9. Definitive Certificates.
If (i) a Clearing Agency elects to discontinue its services as
securities deposi tary with respect to the Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 3.8, (ii) the Company elects to terminate the book-entry system through
the Clearing Agency with respect to the Securities, or (iii) there shall have
occurred and be continuing a default by the Company in respect of its
obligations under one or more Purchase Contracts, then upon surrender of the
Global Certificates representing the Book-Entry Interests with respect to the
Securities by the Clearing Agency, accompanied by registration instructions,
the Company shall cause definitive Certificates to be delivered to Beneficial
Owners in accordance with the instructions of the Clearing Agency. The Company
shall not be liable for any delay in delivery of such instructions and may
conclusively rely on and shall be protected in relying on, such instructions.
Section 3.10. Mutilated, Destroyed, Lost and Stolen Certificates.
If any mutilated Certificate is surrendered to the Agent, the Company
shall execute and deliver to the Agent, and the Agent shall authenticate,
execute on behalf of the Holder, and deliver in exchange therefor, a new
Certificate at the cost of the Holder, evidencing the same number of Income
PRIDES or Growth PRIDES, as the case may be, and bearing a Certificate number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Agent (i) evidence
to their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) such security or indemnity at the cost of the Holder as may be required by
them to hold each of them and any agent of any of them harmless, then, in the
absence of notice to the Company or the Agent that such Certificate has been
acquired by a bona fide purchaser, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the Holder, and
deliver to the Holder, in lieu of any such destroyed, lost or stolen
Certificate, a new Certificate, evidencing the same number of Income PRIDES or
Growth PRIDES, as the case may be, and bearing a Certificate number not
contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder, and deliver to the Holder, a
Certificate on or after the Business Day immediately preceding the earlier of
the Purchase Contract
27
Settlement Date or the Termination Date. In lieu of delivery of a new
Certificate, upon satisfac tion of the applicable conditions specified above in
this Section and receipt of appropriate registration or transfer instructions
from such Holder, the Agent shall (i) if the Purchase Contract Settlement Date
has occurred, deliver the shares of Common Stock issuable in respect of the
Purchase Contracts forming a part of the Securities evidenced by such
Certificate, or (ii) if a Termination Event shall have occurred prior to the
Purchase Contract Settlement Date, transfer the Preferred Securities, the
appropriate Applicable Ownership Interest of the Treasury Portfolio or the
Treasury Securities, as the case may be, evidenced thereby, in each case
subject to the applica ble conditions and in accordance with the applicable
provisions of Article Five hereof.
Upon the issuance of any new Certificate under this Section, the
Company and the Agent may require the payment by the Holder of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Agent)
connected therewith.
Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the
Security evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of this Agreement equally and proportionately with any
and all other Certificates delivered hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Certificates.
Section 3.11. Persons Deemed Owners.
Prior to due presentment of a Certificate for registration of
transfer, the Company and the Agent, and any agent of the Company or the Agent,
may treat the Person in whose name such Certificate is registered as the owner
of the Income PRIDES or Growth PRIDES evidenced thereby, for the purpose of
receiving distribu tions on the Preferred Securities or on the maturing
quarterly interest strips of the Treasury Portfolio, as applicable, receiving
payments of Contract Adjustment Payments, performance of the Purchase Contracts
and for all other purposes whatso-
28
ever, whether or not any distributions on the Preferred Securities or the
Contract Adjustment Payments payable in respect of the Purchase Contracts
constituting a part of the Income PRIDES or Growth PRIDES evidenced thereby
shall be overdue and notwithstanding any notice to the contrary, and neither
the Company nor the Agent, nor any agent of the Company or the Agent, shall be
affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global Certificate,
nothing herein shall prevent the Company, the Agent or any agent of the Company
or the Agent, from giving effect to any written certification, proxy or other
authorization furnished by any Clearing Agency (or its nominee), as a Holder,
with respect to such Global Certificate or impair, as between such Clearing
Agency and owners of beneficial interests in such Global Certificate, the
operation of customary practices governing the exercise of rights of such
Clearing Agency (or its nominee) as Holder of such Global Certificate.
Section 3.12. Cancellation.
All Certificates surrendered for delivery of shares of Common Stock on
or after the Purchase Contract Settlement Date, upon the transfer of Preferred
Securi ties, the appropriate Applicable Ownership Interest of the Treasury
Portfolio or Treasury Securities, as the case may be, after the occurrence of a
Termination Event or pursuant to an Early Settlement, or upon the registration
of a transfer or exchange of a Security, or a Collateral Substitution or the
re-establishment of an Income PRIDES shall, if surrendered to any Person other
than the Agent, be delivered to the Agent and, if not already cancelled, shall
be promptly cancelled by it. The Company may at any time deliver to the Agent
for cancellation any Certificates previously authenticated, executed and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Certificates so delivered shall, upon Issuer Order, be
promptly cancelled by the Agent. No Certificates shall be authenticated,
executed on behalf of the Holder and delivered in lieu of or in exchange for
any Certificates cancelled as provided in this Section, except as expressly
permitted by this Agreement. All cancelled Certificates held by the Agent shall
be destroyed by the Agent unless otherwise directed by Issuer Order.
If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Agent
cancelled or for cancellation.
29
Section 3.13. Establishment or Reestablishment of Growth PRIDES
A Holder may separate the Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as applicable, from
the related Purchase Contracts in respect of an Income PRIDES by substituting
for such Preferred Securities or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be, Treasury Securities in an
aggregate principal amount equal to the aggregate Stated Amount of such
Preferred Securities or for the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as applicable (a "Collateral Substitution"), at any time from and
after the date of this Agreement and on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date in the case of the
Preferred Securi ties and on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date in the case of the appropriate
Applicable Ownership Interest of the Treasury Portfolio, in each case by (a)
depositing with the Collateral Agent Treasury Securities having an aggregate
principal amount equal to the aggre gate Stated Amount of the Preferred
Securities comprising part of such Income PRIDES or for the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio comprising part of such Income PRIDES, as
the case may be, and (b) (i) in the event that Contract Adjust ment Payments
are at a higher rate for Income PRIDES than for Growth PRIDES, by delivering
cash in an amount equal to the excess of the Contract Adjustment Pay ments that
would have accrued since the last Payment Date through the date of substitution
on the Growth PRIDES being created by the Holder, over the Contract Adjustment
Payments that have accrued over the same time period on the related Income
PRIDES, which amount the Agent shall promptly remit to the Company, and (ii)
transferring the related Income PRIDES to the Agent accompanied by a notice to
the Agent, substantially in the form of Exhibit D hereto, stating that the
Holder has transferred the relevant amount of Treasury Securities to the
Collateral Agent and requesting that the Agent instruct the Collateral Agent to
release the Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, underlying such Income
PRIDES, whereupon the Agent shall promptly give such instruction to the
Collateral Agent, substantially in the form of Exhibit C hereto. Upon receipt
of the Treasury Securities described in clause (a) above and the instruction
described in clause (b) above, in accordance with the terms of the Pledge
Agreement, the Collateral Agent will release to the Agent, on behalf of the
Holder, Preferred Securities or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be, having a corresponding aggregate
Stated Amount of such Preferred Securities or the appropri-
30
ate Applicable Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio, as the case may be, from the Pledge,
free and clear of the Company's security interest therein, and upon receipt
thereof the Agent shall promptly:
(i) cancel the related Income PRIDES;
(ii) transfer the Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, to the Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver a Growth PRIDES Certificate executed by the Company in
accordance with Section 3.3 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled Income PRIDES.
Holders who elect to separate the Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, from the related Purchase Contract and to substitute Treasury
Securities for such Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, shall be
responsible for any fees or expenses payable to the Collateral Agent for its
services as Collateral Agent in respect of the substitution, and the Company
shall not be responsible for any such fees or expenses.
Holders may make Collateral Substitutions (i) only in integral
multiples of 20 Income PRIDES if Preferred Securities are being substituted by
Treasury Securities, or (ii) only in integral multiples of 160,000 Income
PRIDES if the appropriate Applicable Ownership Interests of the Treasury
Portfolio are being substituted by Treasury Securities.
In the event a Holder making a Collateral Substitution pursuant to
this Section 3.13 fails to effect a book-entry transfer of the Income PRIDES or
fails to deliver an Income PRIDES Certificate(s) to the Agent after depositing
Treasury Securities with the Collateral Agent, the Preferred Securities or the
appropriate Applicable Owner ship Interest of the Treasury Portfolio, as the
case may be, constituting a part of such Income PRIDES, and any distributions
on such Preferred Security or the Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, shall be held in the name of the Agent or its
nominee in trust for the benefit of such Holder, until such Income PRIDES
is so transferred or the Income PRIDES
31
Certificate is so delivered, as the case may be, or, with respect to an Income
PRIDES Certificate, such Holder provides evidence satisfactory to the Company
and the Agent that such Income PRIDES Certificate has been destroyed, lost or
stolen, together with any indemnity that may be required by the Agent and the
Company.
Except as described in this Section 3.13, for so long as the Purchase
Contract underlying an Income PRIDES remains in effect, such Income PRIDES
shall not be separable into its constituent parts, and the rights and
obligations of the Holder in respect of the Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, and Purchase Contract comprising such Income PRIDES may be
acquired, and may be transferred and exchanged, only as an Income PRIDES.
Section 3.14. Establishment or Reestablishment of Income PRIDES.
A Holder of a Growth PRIDES may create or recreate Income PRIDES at
any time (i) on or prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date, if a Tax Event Redemption has not occurred,
and (ii) on or prior to the second Business Day immediately preceding the
Purchase Contract Settlement Date, if a Tax Event Redemption has occurred, in
each case by (a) depositing with the Collateral Agent Preferred Securities or
the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, having an aggregate Stated Amount in the case of the Preferred
Securities, or an appropriate Applicable Ownership Interest (as defined in
clause (A) of the definition of such term) of the Treasury Portfolio, as the
case may be, equal to the aggregate principal amount of the Treasury Securities
comprising part of the Growth PRIDES and (b) (i) in the event that Contract
Adjustment Payments are at a higher rate for Income PRIDES than for Growth
PRIDES, by delivering to the Agent cash in an amount equal to the excess of the
Contract Adjustment Payments that would have accrued since the last payment
date through the date of substitution on the Income PRIDES being created or
recreated by such Holders, over the Contract Adjustment Payments that have
accrued over the same time period on the related Growth PRIDES and (ii)
transferring the related Growth PRIDES to the Agent accompanied by a notice to
the Agent, substantially in the form of Exhibit D hereto, stating that the
Holder has transferred the relevant amount of Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, to the Collateral Agent and requesting that the Agent instruct the
Collateral Agent to release the Treasury Securities underlying such Growth
PRIDES, whereupon the Agent shall promptly give such instruction to the
Collateral Agent, substantially in the form of
32
Exhibit C hereto. Upon receipt of the Preferred Securities or the appropriate
Appli cable Ownership Interest of the Treasury Portfolio, as the case may be,
described in clause (a) above and the instruction described in clause (b)
above, in accordance with the terms of the Pledge Agreement, the Collateral
Agent will effect the release of the Treasury Securities having a corresponding
aggregate principal amount from the Pledge to the Agent free and clear of the
Company's security interest therein, and upon receipt thereof the Agent shall
promptly:
(i) cancel the related Growth PRIDES;
(ii) transfer the Treasury Securities to the Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver an Income PRIDES Certificate executed by the Company in
accordance with Section 3.3 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled Growth PRIDES.
Holders of Growth PRIDES may establish or reestablish Income PRIDES in
integral multiples of 20 Growth PRIDES for 20 Income PRIDES if a Tax Event
Redemption has not occurred, and in integral multiples of 160,000 Growth PRIDES
for 160,000 Income PRIDES if a Tax Event Redemption has occurred.
Except as provided in this Section 3.14, for so long as the Purchase
Contract underlying a Growth PRIDES remains in effect, such Growth PRIDES shall
not be separable into its constituent parts and the rights and obligations of
the Holder of such Growth PRIDES in respect of the Treasury Security and
Purchase Contract compris ing such Growth PRIDES may be acquired, and may be
transferred and exchanged only as a Growth PRIDES.
Section 3.15. Transfer of Collateral upon Occurrence of Termination Event.
Upon the occurrence of a Termination Event and the transfer to the
Agent of the Preferred Securities, the appropriate Applicable Ownership
Interest of the Treasury Portfolio or the Treasury Securities, as the case may
be, underlying the Income PRIDES and the Growth PRIDES pursuant to the terms of
the Pledge Agreement, the Agent shall request transfer instructions with
respect to such Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio or Treasury Securities, as the case may be,
from each Holder by written request mailed to such Holder at its address as it
appears in the Income PRIDES
33
Register or the Growth PRIDES Register, as the case may be. Upon book-entry
transfer of the Income PRIDES or Growth PRIDES or delivery of an Income PRIDES
Certificate or Growth PRIDES Certificate to the Agent with such transfer
instructions, the Agent shall transfer the Preferred Securities, the Treasury
Portfolio or Treasury Securities, as the case may be, underlying such Income
PRIDES or Growth PRIDES, as the case may be, to such Holder by book-entry
transfer, or other appropriate procedures, in accordance with such
instructions. In the event a Holder of Income PRIDES or Growth PRIDES fails to
effect such transfer or delivery, the Preferred Securities, the appropriate
Applicable Ownership Interest of the Treasury Portfolio or Treasury Securities,
as the case may be, underlying such Income PRIDES or Growth PRIDES, as the case
may be, and any distributions thereon, shall be held in the name of the Agent
or its nominee in trust for the benefit of such Holder, until such Income
PRIDES or Growth PRIDES are transferred or the Income PRIDES Certifi cate or
Growth PRIDES Certificate is surrendered or such Holder provides satisfac tory
evidence that such Income PRIDES Certificate or Growth PRIDES Certificate
has been destroyed, lost or stolen, together with any indemnity that may be
required by the Agent and the Company.
Section 3.16. No Consent to Assumption.
Each Holder of a Security, by acceptance thereof, shall be deemed
expressly to have withheld any consent to the assumption under Section 365 of
the Bankruptcy Code or otherwise, of the Purchase Contract by the Company,
receiver, liquidator or a person or entity performing similar functions, its
trustee in the event that the Company becomes the debtor under the Bankruptcy
Code or subject to other similar state or federal law providing for
reorganization or liquidation.
ARTICLE IV
The Preferred Securities
Section 4.1. Payment of Distribution; Rights to Distributions Preserved;
Distribution Rate Reset; Notice.
A distribution on any Preferred Security or on the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
which is paid on any Payment Date shall, subject to receipt thereof by the
Agent from the Collateral
34
Agent as provided by the terms of the Pledge Agreement, be paid to the Person
in whose name the Income PRIDES Certificate (or one or more Predecessor Income
PRIDES Certificates) of which such Preferred Security or the appropriate
Applicable Owner ship Interest of the Treasury Portfolio, as the case may be,
is a part is registered at the close of business on the Record Date for such
Payment Date.
Each Income PRIDES Certificate evidencing Preferred Securities
delivered under this Agreement upon registration of transfer of or in exchange
for or in lieu of any other Income PRIDES Certificate shall carry the rights to
distributions accrued and unpaid, and to accrue distributions, which were
carried by the Preferred Securities underlying such other Income PRIDES
Certificate.
In the case of any Income PRIDES with respect to which Cash Settlement
of the underlying Purchase Contract is effected on the Business Day immediately
preceding the Purchase Contract Settlement Date pursuant to prior notice, or
with respect to which Early Settlement of the underlying Purchase Contract is
effected on a Early Settlement Date, or with respect to which a Collateral
Substitution is effected, in each case on a date that is after any Record Date
and on or prior to the next succeeding Payment Date, distributions on the
Preferred Securities or on the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, underlying such Income PRIDES
otherwise payable on such Payment Date shall be payable on such Payment Date
notwithstanding such Cash Settlement or Early Settlement or Collateral
Substitution, and such distributions shall, subject to receipt thereof by the
Agent, be payable to the Person in whose name the Income PRIDES Certificate (or
one or more Predecessor Income PRIDES Certificates) was registered at the close
of business on the Record Date. Except as otherwise expressly provided in the
immediately preceding sentence, in the case of any Income PRIDES with respect
to which Cash Settlement or Early Settlement of the underlying Purchase
Contract is effected on the Business Day immediately preceding the Purchase
Contract Settlement Date or an Early Settlement Date, as the case may be, or
with respect to which a Collateral Substitution has been effected,
distributions on the related Preferred Securities or on the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
that would otherwise be payable after the Purchase Contract Settlement Date or
Early Settlement Date shall not be payable hereunder to the Holder of such
Income PRIDES; provided, however, that to the extent that such Holder continues
to hold the separated Preferred Securities that formerly comprised a part of
such Holder's Income PRIDES, such Holder shall be entitled to receive the
distributions on such separated Preferred Securities.
35
The applicable Coupon Rate on the Preferred Securities on and after
the Purchase Contract Settlement Date will be reset on the third Business Day
immediately preceding the Purchase Contract Settlement Date to the Reset Rate
(such Reset Rate to be in effect on and after the purchase Contract Settlement
Date). On the Reset Announcement Date the Reset Spread and the Two-Year
Benchmark Treasury to be used to determine the Reset Rate will be announced by
the Company. On the Business Day immediately following the Reset Announcement
Date, the Preferred Securities Holders will be notified of such Reset Spread
and Two-Year Benchmark Treasury by the Company. Such notice shall be
sufficiently given to Holders of Preferred Securities if published in an
Authorized Newspaper in The City of New York.
Not later than 7 calendar days nor more than 15 calendar days prior to
the Reset Announcement Date, the Company will notify the DTC or its nominee (or
any successor Clearing Agency or its nominee) by first-class mail, postage
prepaid, to notify the Beneficial Owners or Clearing Agency Participants
holding Income PRIDES or Growth PRIDES, of such Reset Announcement Date and the
procedures to be followed by such Holders of Income PRIDES who intend to settle
their obliga tion under the Purchase Contract with separate cash on the
Purchase Contract Settlement Date.
Section 4.2. Notice and Voting.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Preferred
Securities pledged with the Collateral Agent but only to the extent instructed
by the Holders as described below. Upon receipt of notice of any meeting at
which holders of Preferred Securities are entitled to vote or upon any
solicitation of consents, waivers or proxies of holders of Preferred
Securities, the Agent shall, as soon as practicable thereafter, mail to the
Holders of Income PRIDES a notice (a) containing such information as is
contained in the notice or solicitation, (b) stating that each Holder on the
record date set by the Agent therefor (which, to the extent possible, shall be
the same date as the record date for determining the holders of Preferred
Securities entitled to vote) shall be entitled to instruct the Agent as to the
exercise of the voting rights pertaining to the Preferred Securities underlying
their Income PRIDES and (c) stating the manner in which such instructions may
be given. Upon the written request of the Holders of Income PRIDES on such
record date, the Agent shall endeavor insofar as practicable to vote or cause
to be voted, in accordance with the instructions set forth in such requests,
the maximum number of Preferred
36
Securities as to which any particular voting instructions are received. In the
absence of specific instructions from the Holder of an Income PRIDES, the Agent
shall abstain from voting the Preferred Security underlying such Income PRIDES.
The Company hereby agrees, if applicable, to solicit Holders of Income PRIDES
to timely instruct the Agent in order to enable the Agent to vote such
Preferred Securities and the Trust shall covenant to such effect in the
Declaration.
Section 4.3. Distribution of Debentures; Tax Event Redemption
Upon the occurrence of an Investment Company Event or a liquidation of
the Trust in accordance with the Declaration, a principal amount of Debentures
constituting the assets of the Trust and underlying the Preferred Securities
equal to the aggregate Stated Amount of the Pledged Preferred Securities shall
be delivered to the Collateral Agent in exchange for the Pledged Preferred
Securities. Thereafter, the Debentures will be substituted for the Pledged
Preferred Securities, and will be held by the Collateral Agent in accordance
with the terms of the Pledge Agreement to secure the obligations of each Holder
of an Income PRIDES to purchase the Common Stock of the Company under the
Purchase Contracts constituting a part of such Income PRIDES. Following the
occurrence of an Investment Company Event or a liquidation of the Trust, the
Holders and the Collateral Agent shall have such security interests, rights and
obligations with respect to the Debentures as the Holders and the Collateral
Agent had in respect of the Preferred Securities subject to the Pledge thereof
as provided in Articles II, III, IV, V and VI of the Pledge Agreement, and any
reference herein to the Preferred Securities shall be deemed to be a reference
to such Debentures. The Company may cause to be made in any Income PRIDES
Certificates thereafter to be issued such change in phraseology and form (but
not in sub stance) as may be appropriate to reflect the liquidation of the
Trust and the substitu tion of Debentures for Preferred Securities as
Collateral.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principle Amount of Debentures
shall be delivered to the Collateral Agent in exchange for the Pledged
Preferred Securities. Thereafter, pursuant to the terms of the Pledge
Agreement, the Collateral Agent will apply an amount equal to the Redemption
Amount of such Redemption Price to purchase on behalf of the Holders of Income
PRIDES the Treasury Portfolio and promptly remit the remaining portion of such
Redemption Price to the Agent for payment to the Holders of such Income PRIDES.
The Treasury Portfolio will be substituted for the Pledged Preferred
Securities, and will be held by the Collateral
37
Agent in accordance with the terms of the Pledge Agreement to secure the
obligation of each Holder of an Income PRIDES to purchase the Common Stock of
the Company under the Purchase Contract constituting a part of such Income
PRIDES. Following the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Holders of Income PRIDES and the
Collateral Agent shall have such security interests, rights and obligations
with respect to the Treasury Portfolio as the Holder of Income PRIDES and the
Collateral Agent had in respect of the Pre ferred Security or Debentures, as
the case may be, subject to the Pledge thereof as provided in Articles II, III,
IV, V, and VI of the Pledge Agreement, and any reference herein to the
Preferred Security or the Debenture shall be deemed to be reference to such
Treasury Portfolio. The Company may cause to be made in any Income PRIDES
Certificates thereafter to be issued such change in phraseology and form (but
not in substance) as may be appropriate to reflect the liquidation of the Trust
and the substitution of the Treasury Portfolio for Preferred Securities or
Debentures as collateral.
ARTICLE V
The Purchase Contracts
Section 5.1. Purchase of Shares of Common Stock.
Each Purchase Contract shall, unless an Early Settlement has occurred
in accordance with Section 5.9 hereof, obligate the Holder of the related
Security to purchase, and the Company to sell, on the Purchase Contract
Settlement Date at a price equal to the Stated Amount (the "Purchase Price"), a
number of newly issued shares of Common Stock equal to the Settlement Rate
unless, on or prior to the Purchase Contract Settlement Date, there shall have
occurred a Termination Event with respect to the Security of which such
Purchase Contract is a part. The "Settlement Rate" is equal to (a) if the
Applicable Market Value (as defined below) is equal to or greater than $48.10
(the "Threshold Appreciation Price"), 1.0395 shares of Common Stock per
Purchase Contract, (b) if the Applicable Market Value is less than the
Threshold Appreciation Price, but is greater than $37.00, the number of shares
of Common Stock equal to the Stated Amount divided by the Applicable Market
Value and (c) if the Applicable Market Value is less than or equal to $37.00,
1.3514 shares of Common Stock per Purchase Contract, in each case subject to
adjustment as provided in Section 5.6 (and in each case rounded upward or
down-
38
ward to the nearest 1/10,000th of a share). As provided in Section 5.10, no
fractional shares of Common Stock will be issued upon settlement of Purchase
Contracts.
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date. The "Closing Price" of the Common Stock on any date of determination
means the closing sale price (or, if no closing price is reported, the last
reported sale price) of the Common Stock on the New York Stock Exchange (the
"NYSE") on such date or, if the Common Stock is not listed for trading on the
NYSE on any such date, as reported in the composite transactions for the
principal United States securities exchange on which the Common Stock is so
listed, or if the Common Stock is not so listed on a United States national or
regional securities exchange, as reported by The Nasdaq Stock Market, or, if
the Common Stock is not so reported, the last quoted bid price for the Common
Stock in the over-the-counter market as reported by the National Quotation
Bureau or similar organization, or, if such bid price is not available, the
market value of the Common Stock on such date as determined by a nationally
recognized independent investment banking firm retained for this purpose
by the Company. A "Trading Day" means a day on which the Common Stock (A) is
not suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
Each Holder of an Income PRIDES or a Growth PRIDES, by its acceptance
thereof, irrevocably authorizes the Agent to enter into and perform the related
Purchase Contract on its behalf as its attorney-in-fact (including the
execution of Certificates on behalf of such Holder), agrees to be bound by the
terms and provisions thereof, covenants and agrees to perform its obligations
under such Purchase Con tracts, and consents to the provisions hereof,
irrevocably authorizes the Agent as its attorney-in-fact to enter into and
perform the Pledge Agreement on its behalf as its attorney-in-fact, and
consents to and agrees to be bound by the Pledge of the Pre ferred Securities,
the Treasury Portfolio or the Treasury Securities pursuant to the Pledge
Agreement; provided that upon a Termination Event, the rights of the Holder of
such Security under the Purchase Contract may be enforced without regard to any
other rights or obligations. Each Holder of an Income PRIDES or a Growth
PRIDES, by its acceptance thereof, further covenants and agrees, that, to the
extent and in the manner provided in Section 5.4 and the Pledge Agreement, but
subject to
39
the terms thereof, payments in respect of the Stated Amount of the Preferred
Securities or the Proceeds of the Treasury Securities or the Treasury
Portfolio on the Purchase Contract Settlement Date shall be paid by the
Collateral Agent to the Company in satisfaction of such Holder's obligations
under such Purchase Contract and such Holder shall acquire no right, title or
interest in such payments.
Upon registration of transfer of a Certificate, the transferee shall
be bound (without the necessity of any other action on the part of such
transferee), under the terms of this Agreement, the Purchase Contracts
underlying such Certificate and the Pledge Agreement and the transferor shall
be released from the obligations under this Agreement, the Purchase Contracts
underlying the Certificates so transferred and the Pledge Agreement. The
Company covenants and agrees, and each Holder of a Certificate, by its
acceptance thereof, likewise covenants and agrees, to be bound by the
provisions of this paragraph.
Section 5.2. Contract Adjustment Payments.
Subject to Section 5.3 herein, the Company shall pay, on each Payment
Date, the Contract Adjustment Payments payable in respect of each Purchase
Contract to the Person in whose name a Certificate (or one or more Predecessor
Certificates) is registered at the close of business on the Record Date next
preceding such Payment Date. The Contract Adjustment Payments will be payable
at the office of the Agent in The City of New York maintained for that purpose
or, at the option of the Company, by check mailed to the address of the Person
entitled thereto at such Person's address as it appears on the Income PRIDES
Register or Growth PRIDES Register.
Upon the occurrence of a Termination Event, the Company's obligation
to pay Contract Adjustment Payments (including any accrued or Deferred Contract
Adjust ment Payments) shall cease.
Each Certificate delivered under this Agreement upon registration of
transfer of or in exchange for or in lieu of (including as a result of a
Collateral Substitution or the re-establishment of an Income PRIDES) any other
Certificate shall carry the rights to Contract Adjustment Payments accrued and
unpaid, and to accrue Contract Adjustment Payments, which were carried by the
Purchase Contracts underlying such other Certificates.
Subject to Section 5.9, in the case of any Security with respect to
which Early Settlement of the underlying Purchase Contract is effected on an
Early Settlement
40
Date that is after any Record Date and on or prior to the next succeeding
Payment Date, Contract Adjustment Payments, if any, otherwise payable on such
Payment Date shall be payable on such Payment Date notwithstanding such Early
Settlement, and such Contract Adjustment Payments shall be paid to the Person
in whose name the Certificate evidencing such Security (or one or more
Predecessor Certificates) is registered at the close of business on such Record
Date. Except as otherwise expressly provided in the immediately preceding
sentence, in the case of any Security with respect to which Early Settlement of
the underlying Purchase Contract is effected on an Early Settlement Date,
Contract Adjustment Payments that would otherwise be payable after the Early
Settlement Date with respect to such Purchase Contract shall not be payable.
The Company's obligations with respect to Contract Adjustment
Payments, will be subordinated and junior in right of payment to the Company's
obligations under any Senior Indebtedness.
Section 5.3. Deferral of Payment Dates For Contract Adjustment Payments.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election to
defer such payment (specifying the amount to be deferred) at least ten Business
Days prior to the earlier of (i) the next succeeding Payment Date or (ii) the
date the Company is required to give notice of the Record Date or Payment Date
with respect to payment of such Contract Adjustment Payments to the New York
Stock Exchange or other applicable self-regulatory organization or to Holders
of the Securities, but in any event not less than one Business Day prior to
such Record Date. Any Contract Adjustment Payments so deferred shall bear
additional Contract Adjustment Payments thereon at the rate of 7.5% per annum
(computed on the basis of 360 day year of twelve 30 day months), compounding on
each succeeding Payment Date, until paid in full (such deferred installments of
Contract Adjustment Payments together with the additional Contract Adjustment
Payments accrued thereon, being referred to herein as the "Deferred Contract
Adjustment Payments"). Deferred Contract Adjustment Payments shall be due on
the next succeeding Payment Date except to the extent that payment is deferred
pursuant to this Section. No Contract Adjustment Payments may be deferred to a
date that is after the Purchase Contract Settlement Date. If the Purchase
Contracts are terminated upon the occurrence of a Termination Event, the
41
Holder's right to receive Contract Adjustment Payments and Deferred Contract
Adjustment Payments will terminate.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, each Holder will receive on the Purchase Contract Settlement
Date in lieu of a cash payment a number of shares of Common Stock (in addition
to a number of shares of Common Stock equal to the Settlement Rate) equal to
(x) the aggregate amount of Deferred Contract Adjustment Payments payable to
such Holder divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not declare or pay dividends on,
make distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or make guarantee
payments with respect to the foregoing (other than (i) purchases or
acquisitions of shares of capital stock of the Company in connection with the
satisfaction by the Company of its obligations under any employee or agent
benefit plans or the satisfaction by the Company of its obligations pursuant to
any contract or security outstanding on the date of such event requiring the
Company to purchase capital stock of the Company, (ii) as a result of a
reclassification of the Company's capital stock or the exchange or conversion
of one class or series of the Company's capital stock for another class or
series of the Company's capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged, (iv) dividends or distributions in capital stock of the Company (or
rights to acquire capital stock) or repurchases or redemptions of capital stock
solely from the issuance or exchange of capital stock or (v) redemptions or
repurchases of any rights outstanding under a shareholder rights plan and the
declaration thereunder of a dividend of rights in the future).
No fractional shares of Common Stock will be issued by the Company
with respect to the payment of Deferred Contract Adjustment Payments on the
Purchase Contract Settlement Date. In lieu of fractional shares otherwise
issuable with respect to such payment of Deferred Contract Adjustment Payments,
the Holder will be entitled to receive an amount in cash as provided in Section
5.10.
42
Section 5.4. Payment of Purchase Price.
(a) (i) Unless a Tax Event Redemption has occurred or a Holder settles
the underlying Purchase Contract through the early delivery of cash to the
Purchase Contract Agent in the manner described in Section 5.9, each Holder of
an Income PRIDES must notify the Agent by use of a notice in substantially the
form of Exhibit E hereto of its intention to pay in cash ("Cash Settlement")
the Purchase Price for the shares of Common Stock to be purchased pursuant to a
Purchase Contract. Such notice shall be made on or prior to 5:00 p.m., New York
City time, on the fifth Business Day immediately preceding the Purchase
Contract Settlement Date. The Agent shall promptly notify the Collateral Agent
of the receipt of such a notice from a Holder intending to make a Cash
Settlement.
(ii) A Holder of an Income PRIDES who has so notified the
Agent of its intention to make a Cash Settlement is required to pay
the Purchase Price to the Collateral Agent prior to 11:00 a.m., New
York City time, on the Business Day immediately preceding the
Purchase Contract Settlement Date in lawful money of the United
States by certified or cashiers' check or wire transfer, in each case
in immediately available funds payable to or upon the order of the
Company. Any cash received by the Collateral Agent will be invested
promptly by the Collateral Agent in Permitted Investments and paid to
the Company on the Purchase Contract Settlement Date in settlement of
the Purchase Contract in accordance with the terms of this Agreement
and the Pledge Agreement. Any funds received by the Collateral Agent
in respect of the investment earnings from the investment in such
Permitted Investments, will be distributed to the Agent when received
for payment to the Holder.
(iii) If a Holder of an Income PRIDES fails to notify the
Agent of its intention to make a Cash Settlement in accordance with
paragraph (a)(i) above, such failure shall constitute an event of
default and the Holder shall be deemed to have consented to the
disposition of the pledged Preferred Securities pursuant to the
Remarketing as described in paragraph (b) below. If a Holder of an
Income PRIDES does notify the Agent as provided in paragraph (a)(i)
above of its intention to pay the Purchase Price in cash, but fails to
make such payment as required by paragraph (a)(ii) above, such failure
shall also constitute a default; however, the Preferred Securities of
such a Holder will not be remarketed but instead the Collateral Agent,
for the benefit of the
43
Company, will exercise its rights as a secured party with respect to
such Preferred Securities, including those rights specified in
paragraph (c) below.
(b) In order to dispose of the Preferred Securities of Income PRIDES
Holders who have not notified the Agent of their intention to effect a Cash
Settlement as provided in paragraph (a)(i) above, the Company shall engage a
nationally recog nized investment bank (the "Remarketing Agent") pursuant to
the Remarketing Agreement to sell such Preferred Securities. In order to
facilitate the remarketing, the Agent shall notify, by 10:00 a.m., New York
City time, on the fourth Business Day immediately preceding the Purchase
Contract Settlement Date, the Remarketing Agent of the aggregate number of
Preferred Securities to be remarketed. Concurrently, the Collateral Agent,
pursuant to the terms of the Pledge Agreement, will present for remarketing
such Preferred Securities to the Remarketing Agent. Upon receipt of such notice
from the Agent and such Preferred Securities from the Collat eral Agent, the
Remarketing Agent will, on the third Business Day immediately preceding the
Purchase Contract Settlement Date, use its reasonable efforts to remarket such
Preferred Securities on such date at a price of approximately 100.5% (but not
less than 100%) of the aggregate stated liquidation amount of such Preferred
Securities, plus accrued and unpaid distributions (including deferred
distributions), if any, thereon. After deducting as the remarketing fee
("Remarketing Fee") an amount not exceeding 25 basis points (.25%) of the
aggregate stated liquidation amount of the remarketed Preferred Securities from
any amount of such proceeds in excess of the aggregate stated liquidation
amount of the remarketed Preferred Securities plus accrued and unpaid
distributions (including any deferred distributions), if any, then the
Remarketing Agent will remit the entire amount of the proceeds from such
remarketing to the Collateral Agent. Such portion of the proceeds, equal to the
aggregate stated liquidation amount of such Preferred Securities, will
automatically be applied by the Collateral Agent, in accordance with the Pledge
Agreement to satisfy in full such Income PRIDES holders' obligations to pay the
Purchase Price for the Common Stock under the related Purchase Contracts on the
Purchase Contract Settlement Date. Any proceeds in excess of those required to
pay the Purchase Price and the Remarketing Fee will be remitted to the Agent
for payment to the Holders of the related Income PRIDES. Income PRIDES Holders
whose Preferred Securities are so remarketed will not otherwise be responsible
for the payment of any Remarketing Fee in connection therewith. If, in spite of
using its reasonable efforts, the Remarketing Agent cannot remarket the related
Preferred Securities of such Holders of Income PRIDES at a price not less then
100% of the aggregate stated liquidation amount of such Preferred Securities
plus accrued and unpaid distributions (including deferred distributions), if
any, the remarketing will be deemed to have
44
failed (a "Failed Remarketing") and in accordance with the terms of the Pledge
Agreement the Collateral Agent for the benefit of the Company will exercise its
rights as a secured party with respect to such Preferred Securities, including
those actions specified in paragraph (c) below; provided, that if upon a Failed
Remarketing the Collateral Agent exercises such rights for the benefit of the
Company with respect to such Preferred Securities, any accrued and unpaid
distributions (including any deferred distributions) on such Preferred
Securities will become payable by the Company to the Agent for payment to the
Beneficial Owner of the Income PRIDES to which such Preferred Securities
relates. Such payment will be made by the Com pany on or prior to 11 a.m. New
York City time on the Purchase Contract Settlement Date in lawful money of the
United States by certified or cashiers' check or wire transfer in immediately
available funds payable to or upon the order of the Agent. The Company will
cause a notice of such Failed Remarketing to be published on the Second
Business Day immediately preceding the Purchase Contract Settlement Date in a
daily newspaper in the English language of general circulation in The City of
New York, which is expected to be The Wall Street Journal.
(c) With respect to any Preferred Securities beneficially owned by
Holders who have elected Cash Settlement but failed to deliver cash as required
in (a)(ii) above, or with respect to Preferred Securities which are subject to
a Failed Remarketing, the Collateral Agent for the benefit of the Company
reserves all of its rights as a secured party with respect thereto and, subject
to applicable law and paragraph (h) below, may, among other things, (i) retain
the Preferred Securities in full satisfaction of the Holders obligations under
the Purchase Contracts or (ii) sell the Preferred Securities in one or more
public or private sales.
(d) (i) Unless a Holder of Growth PRIDES or Income PRIDES (if a Tax
Event Redemption has occurred) settles the underlying Purchase Contract through
the early delivery of cash to the Purchase Contract Agent in the manner
described in Section 5.9, each Holder of a Growth PRIDES or Income PRIDES (if a
Tax Event Redemption has occurred) must notify the Agent by use of a notice in
substantially the form of Exhibit E hereto of its intention to pay in cash the
Purchase Price for the shares of Common Stock to be purchased pursuant to a
Purchase Contract on or prior to 5:00 p.m., New York City time, on the second
Business Day immediately preceding the Purchase Contract Settlement Date.
(ii) A Holder of a Growth PRIDES or Income PRIDES (if a Tax
Event Redemption has occurred) who has so notified the Agent of its
inten tion to make a Cash Settlement in accordance with paragraph
(d)(i) above is
45
required to pay the Purchase Price to the Collateral Agent prior to
11:00 a.m., New York City time, on the Business Day immediately
preceding the Purchase Contract Settlement Date in lawful money of
the United States by certified or cashiers' check or wire transfer,
in each case in immediately available funds payable to or upon the
order of the Company. Any cash received by the Collateral Agent will
be invested promptly by the Collateral Agent in Permitted Investments
and paid to the Company on the Purchase Contract Settlement Date in
settlement of the Purchase Contract in accordance with the terms of
this Agreement and the Pledge Agreement. Any funds received by the
Collateral Agent in respect of the investment earnings from the
investment in such Permitted Investments will be distributed to the
Agent when received for payment to the Holder.
(iii) If a Holder of a Growth PRIDES fails to notify the
Agent of its intention to make a Cash Settlement in accordance with
paragraph (d)(i) above, or if a Holder of an Income PRIDES (if a Tax
Event Redemption has occurred) does notify the Agent as provided in
paragraph (d)(i) above its intention to pay the Purchase Price in
cash, but fails to make such payment as required by paragraph (d)(ii)
above, then upon the maturity of the Pledged Treasury Securities or
the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, held by the Collateral Agent on the
Business Day immediately prior to the Purchase Contract Settlement
Date, the principal amount of the Treasury Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio,
as the case may be, received by the Collateral Agent will be invested
promptly in overnight Permitted Investments. On the Purchase Contract
Settlement Date an amount equal to the Purchase Price will be remitted
to the Company as payment thereof without receiving any instructions
from the Holder. In the event the sum of the proceeds from the related
Pledged Treasury Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, and the
investment earnings earned from such investments is in excess of the
aggregate Purchase Price of the Purchase Contracts being settled
thereby, the Collateral Agent will distribute such excess to the Agent
for the benefit of the Holder of the related Growth PRIDES or Income
PRIDES when received.
(e) Any distribution to Holders of excess funds and interest described
above, shall be payable at the office of the Agent in The City of New York
maintained for that purpose or, at the option of the Holder, by check mailed to
the address of the Person entitled thereto at such address as it appears on the
Register.
46
(f) Unless a Holder settles the underlying Purchase Contract through
the early delivery of cash to the Collateral Agent in the manner described
herein, the Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificate therefor to the
Holder unless it shall have received payment in full of the Purchase Price for
the shares of Common Stock to be purchased thereunder in the manner herein set
forth.
(g) Upon Cash Settlement of any Purchase Contract, (i) the Collateral
Agent will in accordance with the terms of the Pledge Agreement cause the
Pledged Preferred Securities or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be, or the Pledged Treasury
Securities underlying the relevant Security to be released from the Pledge by
the Collateral Agent free and clear of any security interest of the Company and
transferred to the Agent for delivery to the Holder thereof or its designee as
soon as practicable and (ii) subject to the receipt thereof from the Collateral
Agent, the Agent shall, by book-entry transfer, or other appropriate
procedures, in accordance with instructions provided by the Holder thereof,
transfer such Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, or such Treasury
Securities (or, if no such instructions are given to the Agent by the Holder,
the Agent shall hold such Preferred Securities or the Treasury Portfolio, as
the case may be, or such Treasury Securities, and any distribution thereon, in
the name of the Agent or its nominee in trust for the benefit of such Holder).
(h) The obligations of the Holders to pay the Purchase Price are
non-recourse obligations and are payable solely out of any Cash Settlement or
the pro ceeds of any Collateral Pledged to secure the obligations of the
Holders and in no event will Holders be liable for any deficiency between the
proceeds of Collateral disposition and the Purchase Price.
Section 5.5. Issuance of Shares of Common Stock.
Unless a Termination Event shall have occurred on or prior to the
Purchase Contract Settlement Date or an Early Settlement shall have occurred,
on the Purchase Contract Settlement Date, upon its receipt of payment in full
of the Purchase Price for the shares of Common Stock purchased by the Holders
pursuant to the foregoing provisions of this Article and subject to Section
5.6(b), the Company shall issue and deposit with the Agent, for the benefit of
the Holders of the Outstanding Securities, one or more certificates
representing the newly issued shares of Common Stock registered in the name of
the Agent (or its nominee) as custodian for the Holders
47
(such certificates for shares of Common Stock, together with any dividends or
distributions for which a record date and payment date for such dividend or
distribution has occurred after the Purchase Contract Settlement Date, being
hereinafter referred to as the "Purchase Contract Settlement Fund") to which
the Holders are entitled hereunder. Subject to the foregoing, upon surrender of
a Certificate to the Agent on or after the Purchase Contract Settlement Date,
together with settlement instructions thereon duly completed and executed, the
Holder of such Certificate shall be entitled to receive in exchange therefor a
certificate representing that number of whole shares of Common Stock which such
Holder is entitled to receive pursuant to the provisions of this Article Five
(after taking into account all Securities then held by such Holder) together
with cash in lieu of fractional shares as provided in Section 5.10 and any
dividends or distributions with respect to such shares constituting part of the
Purchase Contract Settlement Fund, but without any interest thereon, and the
Certificate so surrendered shall forthwith be cancelled. Such shares shall be
registered in the name of the Holder or the Holder's designee as specified in
the settlement instructions provided by the Holder to the Agent. If any shares
of Common Stock issued in respect of a Purchase Contract are to be registered
to a Person other than the Person in whose name the Certificate evidencing such
Purchase Contract is registered, no such registration shall be made unless the
Person requesting such registration has paid any transfer and other taxes
required by reason of such registra tion in a name other than that of the
registered Holder of the Certificate evidencing such Purchase Contract or has
established to the satisfaction of the Company that such tax either has been
paid or is not payable.
Section 5.6. Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or other
distribution on the Common Stock in Common Stock, the Settlement Rate, as in
effect at the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution shall be increased by dividing such Settlement Rate by a fraction
of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such determination
and the denominator shall be the sum of such number of shares and the total
number of shares constituting such dividend or other distribution, such
increase to become effective immediately after the opening of business on the
day following the date fixed for such determination. For the purposes of this
paragraph (1), the number of shares of Common Stock at time
48
outstanding shall not include shares held in the treasury of the Company but
shall include any shares issuable in respect of any scrip certificates issued
in lieu of fractions of shares of Common Stock. The Company will not pay any
dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.
(2) In case the Company shall issue rights, options or
warrants to all holders of its Common Stock (not being available on an
equivalent basis to Holders of the Securities upon settlement of the Purchase
Contracts underlying such Securities) entitling them, for a period expiring
within 45 days after the record date for the determination of stockholders
entitled to receive such rights, options or warrants, to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price per share of the Common Stock on the date fixed for the
determination of stockholders entitled to receive such rights, options or
warrants (other than pursuant to a dividend reinvestment plan), the Settlement
Rate, in effect at the opening of business on the day following the date fixed
for such determination shall be increased by dividing such Settlement Rate, by
a fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such determination
plus the number of shares of Common Stock which the aggregate of the offering
price of the total number of shares of Common Stock so offered for subscription
or purchase would purchase at such Current Market Price and the denominator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for
such determination plus the number of shares of Common Stock so offered for
subscription or purchase, such increase to become effective immediately after
the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (2), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include any shares issuable in respect of any
scrip certificates issued in lieu of frac tions of shares of Common Stock. The
Company shall not issue any such rights, options or warrants in respect of
shares of Common Stock held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be
subdivided or split into a greater number of shares of Common Stock, the
Settlement Rate, in effect at the opening of business on the day following the
day upon which such subdivision or split becomes effective shall be
proportionately increased, and, con versely, in case outstanding shares of
Common Stock shall each be combined into a smaller number of shares of Common
Stock, the Settlement Rate, in effect at
49
the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately reduced, such increase
or reduction, as the case may be, to become effective immediately after the
opening of business on the day following the day upon which such subdivision,
split or combination becomes effective.
(4) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its indebtedness or
assets (including securities, but excluding any rights or warrants referred to
in paragraph (2) of this Section, any dividend or distribution paid exclusively
in cash and any dividend or distribution referred to in paragraph (1) of this
Section), the Settlement Rate, shall be adjusted so that the same shall equal
the rate determined by dividing the Settlement Rate in effect immediately prior
to the close of business on the date fixed for the determination of
stockholders entitled to receive such distribution by a fraction of which the
numerator shall be the Current Market Price per share of the Common Stock on
the date fixed for such determination less the then fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution filed with the Agent) of the portion of the
assets or evidences of indebtedness so distributed applicable to one share of
Common Stock and the denominator shall be such Current Market Price per share
of the Common Stock, such adjustment to become effective immediately prior to
the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such distribution. In any
case in which this paragraph (4) is applicable, paragraph (2) of this Section
shall not be applicable.
(5) In case the Company shall, (I) by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any cash that is
distributed in a Reorganization Event to which Section 5.6(b) applies or as
part of a distribution referred to in paragraph (4) of this Section) in an
aggregate amount that, combined together with (II) the aggregate amount of any
other distributions to all holders of its Common Stock made exclusively in cash
within the 12 months preced ing the date of payment of such distribution and in
respect of which no adjustment pursuant to this paragraph (5) or paragraph (6)
of this Section has been made and (III) the aggregate of any cash plus the fair
market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution) of consideration
payable in respect of any tender or exchange offer by the Company or any of its
subsidiaries for all or any portion of the Common Stock concluded within the 12
months preceding the date of payment of the distribution described in clause
(I) above and in respect of which no adjustment pursuant to
50
this paragraph (5) or paragraph (6) of this Section has been made, exceeds 15%
of the product of the Current Market Price per share of the Common Stock on the
date for the determination of holders of shares of Common Stock entitled to
receive such distribution times the number of shares of Common Stock
outstanding on such date, then, and in each such case, immediately after the
close of business on such date for determination, the Settlement Rate, shall be
increased so that the same shall equal the rate determined by dividing the
Settlement Rate in effect immediately prior to the close of business on the
date fixed for determination of the stockholders entitled to receive such
distribution by a fraction (i) the numerator of which shall be equal to the
Current Market Price per share of the Common Stock on the date fixed for such
determination less an amount equal to the quotient of (x) the combined amount
distributed or payable in the transactions described in clauses (I), (II) and
(III) above and (y) the number of shares of Common Stock outstanding on such
date for determination and (ii) the denominator of which shall be equal to the
Current Market Price per share of the Common Stock on such date for
determination.
(6) In case (I) a tender or exchange offer made by the
Company or any subsidiary of the Company for all or any portion of the Common
Stock shall expire and such tender or exchange offer (as amended upon the
expiration thereof) shall require the payment to stockholders (based on the
acceptance (up to any maximum specified in the terms of the tender or exchange
offer) of Purchased Shares) of an aggregate consideration having a fair market
value (as determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) that combined together with
(II) the aggregate of the cash plus the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and described in a
Board Resolution), as of the expiration of such tender or exchange offer, of
consideration payable in respect of any other tender or exchange offer, by the
Company or any subsidiary of the Company for all or any portion of the Common
Stock expiring within the 12 months preceding the expiration of such tender or
exchange offer and in respect of which no adjustment pursuant to paragraph (5)
of this Section or this paragraph (6) has been made and (III) the aggregate
amount of any distributions to all holders of the Company's Common Stock made
exclusively in cash within the 12 months preceding the expiration of such
tender or exchange offer and in respect of which no adjustment pursuant to
paragraph (5) of this Section or this paragraph (6) has been made, exceeds 15%
of the product of the Current Market Price per share of the Common Stock as of
the last time (the "Expiration Time") tenders could have been made pursuant to
such tender or exchange offer (as it may be amended) times the number of shares
of Common Stock outstanding (including any tendered shares) on the Expiration
Time, then, and
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in each such case, immediately prior to the opening of business on the day
after the date of the Expiration Time, the Settlement Rate, shall be adjusted
so that the same shall equal the rate determined by dividing the Settlement
Rate immediately prior to the close of business on the date of the Expiration
Time by a fraction (i) the numerator of which shall be equal to (A) the product
of (I) the Current Market Price per share of the Common Stock on the date of
the Expiration Time and (II) the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time less (B) the amount of
cash plus the fair market value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the transactions described in
clauses (I), (II) and (III) above (assuming in the case of clause (I) the
acceptance, up to any maximum specified in the terms of the tender or exchange
offer, of Purchased Shares), and (ii) the denominator of which shall be equal
to the product of (A) the Current Market Price per share of the Common Stock as
of the Expiration Time and (B) the number of shares of Common Stock outstanding
(including any tendered shares) as of the Expiration Time less the number of
all shares validly tendered and not withdrawn as of the Expiration Time (the
shares deemed so accepted, up to any such maximum, being referred to as the
"Purchased Shares").
(7) The reclassification of Common Stock into securities
including securities other than Common Stock (other than any reclassification
upon a Reorgani zation Event to which Section 5.6(b) applies) shall be deemed
to involve (a) a distribution of such securities other than Common Stock to all
holders of Common Stock (and the effective date of such reclassification shall
be deemed to be "the date fixed for the determination of stockholders entitled
to receive such distribution" and the "date fixed for such determination"
within the meaning of paragraph (4) of this Section), and (b) a subdivision,
split or combination, as the case may be, of the number of shares of Common
Stock outstanding immediately prior to such reclassification into the number
of shares of Common Stock outstanding immediately thereafter (and the
effective date of such reclassification shall be deemed to be "the day upon
which such subdivision or split becomes effective" or "the day upon which such
combination becomes effective", as the case may be, and "the day upon which
such subdivision, split or combination becomes effective" within the meaning of
paragraph (3) of this Section).
(8) The "Current Market Price" per share of Common Stock on
any day means the average of the daily Closing Prices for the 5 consecutive
Trading Days selected by the Company commencing not more than 30 Trading Days
before, and ending not later than, the earlier of the day in question and the
day before the "ex
52
date" with respect to the issuance or distribution requiring such computation.
For purposes of this paragraph, the term "ex date", when used with respect to
any issuance or distribution, shall mean the first date on which the Common
Stock trades regular way on such exchange or in such market without the right
to receive such issuance or distribution.
(9) All adjustments to the Settlement Rate, shall be
calculated to the nearest 1/10,000th of a share of Common Stock (or if there is
not a nearest 1/10,000th of a share to the next lower 1/10,000th of a share).
No adjustment in the Settlement Rate shall be required unless such adjustment
would require an increase or decrease of at least one percent therein;
provided, however, that any adjustments which by reason of this subparagraph
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. If an adjustment is made to the Settlement Rate
pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section
5.6(a), an adjustment shall also be made to the Applicable Market Value solely
to determine which of clauses (a), (b) or (c) of the definition of Settle ment
Rate in Section 5.1 will apply on the Purchase Contract Settlement Date. Such
adjustment shall be made by multiplying the Applicable Market Value by a
fraction of which the numerator shall be the Settlement Rate immediately after
such adjustment pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10)
of this Section 5.6(a) and the denominator shall be the Settlement Rate
immediately before such adjustment; provided, however, that if such adjustment
to the Settlement Rate is required to be made pursuant to the occurrence of any
of the events contemplated by paragraph (1) (2) (3) (4) (5) (7) or (10) of this
Section 5.6(a) during the period taken into consider ation for determining the
Applicable Market Value, appropriate and customary adjustments shall be made to
the Settlement Rate.
(10) The Company may make such increases in the Settlement
Rate, in addition to those required by this Section, as it considers to be
advisable in order to avoid or diminish any income tax to any holders of shares
of Common Stock resulting from any dividend or distribution of stock or
issuance of rights or warrants to purchase or subscribe for stock or from any
event treated as such for income tax purposes or for any other reasons.
(b) Adjustment for Consolidation, Merger or Other Reorganization
Event. In the event of (i) any consolidation or merger of the Company with or
into another Person (other than a merger or consolidation in which the Company
is the continuing corporation and in which the Common Stock outstanding
immediately prior to the merger or consolidation is not exchanged for cash,
securities or other property of the
53
Company or another corporation), (ii) any sale, transfer, lease or conveyance
to another Person of the property of the Company as an entirety or
substantially as an entirety, (iii) any statutory exchange of securities of the
Company with another Person (other than in connection with a merger or
acquisition) or (iv) any liquidation, dissolution or winding up of the Company
other than as a result of or after the occurrence of a Termination Event (any
such event, a "Reorganization Event"), the Settlement Rate will be adjusted to
provide that each Holder of Securities will receive on the Purchase Contract
Settlement Date with respect to each Purchase Contract forming a part thereof,
the kind and amount of securities, cash and other property receivable upon such
Reorganization Event (without any interest thereon, and without any right to
dividends or distribution thereon which have a record date that is prior to the
Purchase Contract Settlement Date) by a Holder of the number of shares of
Common Stock issuable on account of each Purchase Contract if the Purchase
Contract Settlement Date had occurred immediately prior to such Reorganization
Event assuming such Holder of Common Stock is not a Person with which the
Company consolidated or into which the Company merged or which merged into the
Company or to which such sale or transfer was made, as the case may be (any
such Person, a "Constituent Person"), or an Affiliate of a Constituent Person
to the extent such Reorganization Event provides for different treatment of
common Stock held by Affiliates of the Company and non-affiliates and such
Holder failed to exercise his rights of election, if any, as to the kind or
amount of securities, cash and other property receivable upon such
Reorganization Event (provided that if the kind or amount of securities, cash
and other property receivable upon such Reorganization Event is not the same
for each share of Common Stock held immediately prior to such Reorganization
Event by other than a Constituent Person or an Affiliate thereof and in respect
of which such rights of election shall not have been exercised ("non-electing
share"), then for the purpose of this Section the kind and amount of
securities, cash and other property receivable upon such Reorganization Event
by each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares). In the event
of such a Reorganization Event, the Person formed by such consolidation, merger
or exchange or the Person which acquires the assets of the Company or, in the
event of a liquidation or dissolution of the Company, the Company or a
liquidating trust created in connection therewith, shall execute and deliver to
the Agent an agreement supplemental hereto providing that the Holders of each
Outstanding Security shall have the rights provided by this Section 5.6. Such
supplemental agreement shall provide for adjustments which, for events
subsequent to the effective date of such supplemental agreement, shall be as
nearly equivalent as may be practicable to the adjustments
54
provided for in this Section. The above provisions of this Section shall
similarly apply to successive Reorganization Events.
Section 5.7. Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein provided, the
Company shall:
(i) forthwith compute the Settlement Rate in accordance with
Section 5.6 and prepare and transmit to the Agent an Officer's
Certificate setting forth the Settlement Rate, the method of
calculation thereof in reason able detail, and the facts requiring
such adjustment and upon which such adjustment is based; and
(ii) within 10 Business Days following the occurrence of an
event that requires an adjustment to the Settlement Rate pursuant to
Section 5.6 (or if the Company is not aware of such occurrence, as
soon as practicable after becoming so aware), provide a written notice
to the Holders of the Securities of the occurrence of such event and a
statement in reasonable detail setting forth the method by which the
adjustment to the Settlement Rate was determined and setting forth
the adjusted Settlement Rate.
(b) The Agent shall not at any time be under any duty or
responsibility to any Holder of Securities to determine whether any facts exist
which may require any adjustment of the Settlement Rate, or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed in making the same. The Agent shall not be
accountable with respect to the validity or value (or the kind or amount) of
any shares of Common Stock, or of any securities or property, which may at the
time be issued or delivered with respect to any Purchase Contract; and the
Agent makes no representation with respect thereto. The Agent shall not be
responsible for any failure of the Company to issue, transfer or deliver any
shares of Common Stock pursuant to a Purchase Contract or to comply with any of
the duties, responsibilities or covenants of the Company contained in this
Article.
Section 5.8. Termination Event; Notice.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments or
55
Deferred Contract Adjustment Payments, if the Company shall have such
obligation, and the rights and obligations of Holders to purchase Common Stock,
shall immediately and automatically terminate, without the necessity of any
notice or action by any Holder, the Agent or the Company, if, on or prior to
the Purchase Contract Settle ment Date, a Termination Event shall have
occurred. Upon and after the occurrence of a Termination Event, the Securities
shall thereafter represent the right to receive the Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, forming a part of such Securities in the case of Income PRIDES, or
Treasury Securities in the case of Growth PRIDES, in accor dance with the
provisions of Section 4.3 of the Pledge Agreement. Upon the occur rence of a
Termination Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Agent, the Collateral Agent
and to the Holders, at their addresses as they appear in the Register.
Section 5.9. Early Settlement.
(a) Subject to and upon compliance with the provisions of this Section
5.9, at the option of the Holder thereof, Purchase Contracts underlying
Securities, having an aggregate Stated Amount equal to $1,000 or an integral
multiple thereof, may be settled early ("Early Settlement") in the case of
Income PRIDES (unless a Tax Event Redemption has occurred) on or prior to the
fifth Business Day immediately preceding the Purchase Contract Settlement Date
and in the case of Growth PRIDES on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date, in each case, as
provided herein; provided however, that if a Tax Event Redemption has occurred
and the Treasury Portfolio has become a component of the Income PRIDES Purchase
Contracts, underlying Income PRIDES may be settled early, on or prior to the
second Business Day immediately preceding the Purchase Contract Settlement
Date, but only in an aggregate amount of $8,000,000 or in an integral multiple
thereof. In order to exercise the right to effect Early Settlement with respect
to any Purchase Contracts, the Holder of the Certificate evidencing Securities
shall deliver such Certificate to the Agent at the Corporate Trust Office duly
endorsed for transfer to the Company or in blank with the form of Election to
Settle Early on the reverse thereof duly completed and accompanied by payment
(payable to the Company in immediately available funds in an amount (the "Early
Settlement Amount") equal to (i) the product of (A) the Stated Amount times
(B) the number of Purchase Contracts with respect to which the Holder has
elected to effect Early Settlement plus (ii) if such delivery is made with
respect to any Purchase Contracts during the period from the close of business
on any Record Date next preceding any Payment Date to the opening of business
on such Payment Date, an
56
amount equal to the sum of (x) the Contract Adjustment Payments payable on such
Payment Date with respect to such Purchase Contracts plus (y) in the case of
Income PRIDES Certificate, the distributions on the related Preferred
Securities payable on such Payment Date. Except as provided in the immediately
preceding sentence and subject to the second to last paragraph of Section 5.2,
no payment or adjustment shall be made upon Early Settlement of any Purchase
Contract on account of any Contract Adjustment Payments accrued on such
Purchase Contract or on account of any dividends on the Common Stock issued
upon such Early Settlement. If the foregoing requirements are first satisfied
with respect to Purchase Contracts underlying any Securities at or prior to
5:00 p.m., New York City time, on a Business Day, such day shall be the "Early
Settlement Date" with respect to such Securities and if such requirements are
first satisfied after 5:00 p.m., New York City time, on a Business Day or on a
day that is not a Business Day, the "Early Settlement Date" with respect to
such Securities shall be the next succeeding Business Day.
(b) Upon Early Settlement of Purchase Contracts by a Holder of the
related Securities, the Company shall issue, and the Holder shall be entitled
to receive, 1.0395 shares of Common Stock on account of each Purchase Contract
as to which Early Settlement is effected (the "Early Settlement Rate");
provided, however, that upon the Early Settlement of the Purchase Contracts,
the Holder of such related Securities will forfeit the right to receive any
Deferred Contract Adjustment Payments. The Early Settlement Rate shall be
adjusted in the same manner and at the same time as the Settlement Rate is
adjusted. As promptly as practicable after Early Settlement of Purchase
Contracts in accordance with the provisions of this Section 5.9, the Company
shall issue and shall deliver to the Agent at the Corporate Trust Office a
certificate or certificates for the full number of shares of Common Stock
issuable upon such Early Settlement together with payment in lieu of any
fraction of a share, as provided in Section 5.10.
(c) No later than the third Business Day after the applicable Early
Settle ment Date the Company shall cause (i) the shares of Common Stock
issuable upon Early Settlement of Purchase Contracts to be issued and
delivered, and (ii) the related Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, in the case of Income
PRIDES, or the related Treasury Securities, in the case of Growth PRIDES, to be
released from the Pledge by the Collateral Agent and transferred, in each case
to the Agent for delivery to the Holder thereof or its designee.
57
(d) Upon Early Settlement of any Purchase Contracts, and subject to
receipt of shares of Common Stock from the Company and the Preferred
Securities, the appropriate Applicable Ownership Interest of the Treasury
Portfolio or Treasury Securities, as the case may be, from the Collateral
Agent, as applicable, the Agent shall, in accordance with the instructions
provided by the Holder thereof on the applicable form of Election to Settle
Early on the reverse of the Certificate evidencing the related Securities, (i)
transfer to the Holder the Preferred Securities, Treasury Portfolio or Treasury
Securities, as the case may be, forming a part of such Securities, and (ii)
deliver to the Holder a certificate or certificates for the full number of
shares of Common Stock issuable upon such Early Settlement together with
payment in lieu of any fraction of a share, as provided in Section 5.10.
(e) In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Securities evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the Agent
shall authenticate, countersign and deliver to the Holder thereof, at the
expense of the Company, a Certificate evidencing the Securities as to which
Early Settlement was not effected.
Section 5.10. No Fractional Shares.
No fractional shares or scrip representing fractional shares of Common
Stock shall be issued or delivered upon settlement on the Purchase Contract
Settlement Date or upon Early Settlement of any Purchase Contracts. If
Certificates evidencing more than one Purchase Contract shall be surrendered
for settlement at one time by the same Holder, the number of full shares of
Common Stock which shall be delivered upon settlement shall be computed on the
basis of the aggregate number of Purchase Contracts evidenced by the
Certificates so surrendered. Instead of any fractional share of Common Stock
which would otherwise be deliverable upon settlement of any Purchase Contracts
on the Purchase Contract Settlement Date or upon Early Settle ment, the
Company, through the Agent, shall make a cash payment in respect of such
fractional interest in an amount equal to the value of such fractional shares
times the Applicable Market Value. The Company shall provide the Agent from
time to time with sufficient funds to permit the Agent to make all cash
payments required by this Section 5.10 in a timely manner.
58
Section 5.11. Charges and Taxes.
The Company will pay all stock transfer and similar taxes attributable
to the initial issuance and delivery of the shares of Common Stock pursuant to
the Purchase Contracts and in payment of any Deferred Contract Adjustment
Payments; provided, however, that the Company shall not be required to pay any
such tax or taxes which may be payable in respect of any exchange of or
substitution for a Certificate evidenc ing a Security or any issuance of a
share of Common Stock in a name other than that of the registered Holder of a
Certificate surrendered in respect of the Securities evidenced thereby, other
than in the name of the Agent, as custodian for such Holder, and the Company
shall not be required to issue or deliver such share certificates or
Certificates unless or until the Person or Persons requesting the transfer or
issuance thereof shall have paid to the Company the amount of such tax or shall
have estab lished to the satisfaction of the Company that such tax has been
paid.
ARTICLE VI
Remedies
Section 6.1. Unconditional Right of Holders to Receive Contract Adjustment
Payments and to Purchase Common Stock.
In the event that Contract Adjustment Payments shall constitute a
component of Income PRIDES or Growth PRIDES, the Holder of any Income PRIDES or
Growth PRIDES shall have the right, which is absolute and unconditional
(subject to the right of the Company to defer payment thereof pursuant to
Section 5.3, the prepayment of Contract Adjustment Payments pursuant to Section
5.9(a) and to the forfeiture of any Deferred Contract Adjustment Payments upon
Early Settlement pursuant to Section 5.9(b) or upon the occurrence of a
Termination Event), to receive payment of each installment of the Contract
Adjustment Payments with respect to the Purchase Contract constituting a part
of such Security on the respective Payment Date for such Security and to
purchase Common Stock pursuant to such Purchase Contract and, in each such
case, to institute suit for the enforcement of any such payment and right to
purchase Common Stock, and such rights shall not be impaired without the
consent of such Holder.
59
Section 6.2. Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any right or
remedy under this Agreement and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company and such Holder shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of such
Holder shall continue as though no such proceeding had been instituted.
Section 6.3. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates in the last
paragraph of Section 3.10, no right or remedy herein conferred upon or reserved
to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 6.4. Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right or remedy
upon a default shall impair any such right or remedy or constitute a waiver of
any such right. Every right and remedy given by this Article or by law to the
Holders may be exer cised from time to time, and as often as may be deemed
expedient, by such Holders.
Section 6.5. Undertaking for Costs.
All parties to this Agreement agree, and each Holder of Income PRIDES
or Growth PRIDES, by its acceptance of such Income PRIDES or Growth PRIDES
shall be deemed to have agreed, that any court may in its discretion require,
in any suit for the enforcement of any right or remedy under this Agreement, or
in any suit against the Agent for any action taken, suffered or omitted by it
as Agent, the filing by any party litigant in such suit of an undertaking to
pay the costs of such suit, and that such court may in its discretion assess
reasonable
60
costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; provided that the provisions of
this Section shall not apply to any suit instituted by the Company, to any
suit instituted by the Agent, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% of the Outstanding Securities,
or to any suit instituted by any Holder for the enforcement of distributions on
any Preferred Securities or Contract Adjustment Payments, if any, on any
Purchase Contract on or after the respective Payment Date therefor in respect
of any Security held by such Holder, or for enforcement of the right to
purchase shares of Common Stock under the Purchase Contracts constituting part
of any Security held by such Holder.
Section 6.6. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Agreement; and the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any
such law and covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Agent or the Holders, but will suffer and
permit the execution of every such power as though no such law had been
enacted.
ARTICLE VII
The Agent
Section 7.1. Certain Duties and Responsibilities.
(a) (1) The Agent undertakes to perform, with respect to the
Securities, such duties and only such duties as are specifically set forth in
this Agreement and the Pledge Agreement, and no implied covenants or
obligations shall be read into this Agreement against the Agent; and
(2) in the absence of bad faith or negligence on its part,
the Agent may, with respect to the Securities, conclusively rely, as
to the truth of the statements and the correctness of the opinions
expressed therein, upon
61
certificates or opinions furnished to the Agent and conforming to the
requirements of this Agreement, but in the case of any certificates
or opinions which by any provision hereof are specifically required
to be furnished to the Agent,
the Agent shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Agreement.
(b) No provision of this Agreement shall be construed to relieve the
Agent from liability for its own negligent action, its own negligent failure to
act, or its own wilful misconduct, except that
(1) this Subsection shall not be construed to limit the
effect of Subsection (a) of this Section;
(2) the Agent shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Agent was negligent in ascertaining the pertinent facts; and
(3) no provision of this Agreement shall require the Agent to
expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if adequate indemnity is not
provided to it.
(c) Whether or not therein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Agent shall be subject to the provisions of this
Section.
(d) The Agent is authorized to execute and deliver the Pledge
Agreement in its capacity as Agent.
Section 7.2. Notice of Default.
Within 30 days after the occurrence of any default by the Company
hereunder of which a Responsible Officer of the Agent has actual knowledge, the
Agent shall transmit by mail to the Company and the Holders of Securities, as
their names and addresses appear in the Register, notice of such default
hereunder, unless such default shall have been cured or waived.
Section 7.3. Certain Rights of Agent.
62
Subject to the provisions of Section 7.1:
(a) the Agent may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by an Officer's Certificate, Issuer Order or Issuer
Request, and any resolution of the Board of Directors of the Company may be
sufficiently evi denced by a Board Resolution;
(c) whenever in the administration of this Agreement the Agent shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Agent (unless other evidence be
herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officer's Certifi cate of the Company;
(d) the Agent may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Agent shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the Agent,
in its discretion, may make reasonable further inquiry or investigation into
such facts or matters related to the execution, delivery and performance of the
Purchase Contracts as it may see fit, and, if the Agent shall determine to make
such further inquiry or investigation, it shall be given a reasonable
opportunity to examine the books, records and premises of the Company,
personally or by agent or attorney; and
(f) the Agent may execute any of the powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys or an
Affiliate and the Agent shall not be responsible for any misconduct or
negligence on the part of any agent or attorney or an Affiliate appointed with
due care by it hereunder.
63
Section 7.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Certificates shall be taken
as the statements of the Company and the Agent assumes no responsibility for
their accu racy. The Agent makes no representations as to the validity or
sufficiency of either this Agreement or of the Securities, or of the Pledge
Agreement or the Pledge. The Agent shall not be accountable for the use or
application by the Company of the proceeds in respect of the Purchase
Contracts.
Section 7.5. May Hold Securities.
Any Registrar or any other agent of the Company, or the Agent and its
Affiliates, in their individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with the Company, the Collateral
Agent or any other Person with the same rights it would have if it were not
Registrar or such other agent, or the Agent.
Section 7.6. Money Held in Custody.
Money held by the Agent in custody hereunder need not be segregated
from the other funds except to the extent required by law or provided herein.
The Agent shall be under no obligation to invest or pay interest on any money
received by it hereunder except as otherwise agreed in writing with the
Company.
Section 7.7. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Agent from time to time reasonable
compensation for all services rendered by it hereunder;
(2) except as otherwise expressly provided herein, to
reimburse the Agent upon its request for all reasonable expenses,
disbursements and ad vances incurred or made by the Agent in
accordance with any provision of this Agreement (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
64
(3) to indemnify the Agent and any predecessor Agent for, and
to hold it harmless against, any loss, liability or expense incurred
without negli gence or bad faith on its part, arising out of or in
connection with the accep tance or administration of its duties
hereunder, including the costs and ex penses of defending itself
against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
Section 7.8. Corporate Agent Required; Eligibility.
There shall at all times be an Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having (or being a member of a bank
holding company having) a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or State authority and having
a Corporate Trust Office in the Borough of Manhattan, The City of New York, if
there be such a corporation in the Borough of Manhattan, The City of New York,
qualified and eligible under this Article and willing to act on reasonable
terms. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Agent shall cease to be eligible in accordance with the provisions
of this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 7.9. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Agent and no appointment of a
successor Agent pursuant to this Article shall become effective until the
acceptance of appointment by the successor Agent in accordance with the
applicable requirements of Section 7.10.
(b) The Agent may resign at any time by giving written notice thereof
to the Company 60 days prior to the effective date of such resignation. If the
instrument of acceptance by a successor Agent required by Section 7.10 shall
not have been delivered to the Agent within 30 days after the giving of such
notice of resignation, the resigning Agent may petition any court of competent
jurisdiction for the appoint ment of a successor Agent.
65
(c) The Agent may be removed at any time by Act of the Holders of a
majority in number of the Outstanding Securities delivered to the Agent and the
Company.
(d) if at any time
(1) the Agent fails to comply with Section 310(b) of the TIA,
as if the Agent were an indenture trustee under an indenture qualified
under the TIA, after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six
months, or
(2) the Agent shall cease to be eligible under Section 7.8
and shall fail to resign after written request therefor by the Company
or by any such Holder, or
(3) the Agent shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Agent or of its
property shall be appointed or any public officer shall take charge or
control of the Agent or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Agent, or (ii) any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Agent and
the appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Agent for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Agent and
shall comply with the applicable requirements of Section 7.10. If no successor
Agent shall have been so appointed by the Company and accepted appointment in
the manner required by Section 7.10, any Holder who has been a bona fide Holder
of a Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Agent.
(f) The Company shall give, or shall cause such successor Agent to
give, notice of each resignation and each removal of the Agent and each
appointment of a successor Agent by mailing written notice of such event by
first-class mail, postage
66
prepaid, to all Holders as their names and addresses appear in the applicable
Register. Each notice shall include the name of the successor Agent and the
address of its Corporate Trust Office.
Section 7.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Agent, every
such successor Agent so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Agent an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Agent shall become
effective and such successor Agent, without any further act, deed or
conveyance, shall become vested with all the rights, powers, agencies and
duties of the retiring Agent; but, on the request of the Company or the
successor Agent, such retiring Agent shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Agent all the
rights, powers and trusts of the retiring Agent and shall duly assign, transfer
and deliver to such successor Agent all property and money held by such
retiring Agent hereunder.
(b) Upon request of any such successor Agent, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Agent all such rights, powers and agencies
referred to in paragraph (a) of this Section.
(c) No successor Agent shall accept its appointment unless at the time
of such acceptance such successor Agent shall be qualified and eligible under
this Article.
Section 7.11. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Agent may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Agent shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Agent, shall be the successor of the Agent hereunder, provided
such corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Certificates shall have been
authenticated and executed on behalf of the Holders, but not delivered, by the
Agent then in office, any successor by merger, conversion or consolidation to
such Agent may adopt such authentication and execution and deliver the
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Certificates so authenticated and executed with the same effect as if such
successor Agent had itself authenticated and executed such Securities.
Section 7.12. Preservation of Information; Communications to Holders.
(a) The Agent shall preserve, in as current a form as is reasonably
practi cable, the names and addresses of Holders received by the Agent in its
capacity as Registrar.
(b) If three or more Holders (herein referred to as "applicants")
apply in writing to the Agent, and furnish to the Agent reasonable proof that
each such applicant has owned a Security for a period of at least six months
preceding the date of such application, and such application states that the
applicants desire to communicate with other Holders with respect to their
rights under this Agreement or under the Securities and is accompanied by a
copy of the form of proxy or other communication which such applicants propose
to transmit, then the Agent shall, mail to all the Holders copies of the form
of proxy or other communication which is specified in such request, with
reasonable promptness after a tender to the Agent of the materials to be mailed
and of payment, or provision for the payment, of the reasonable expenses of
such mailing.
Section 7.13. No Obligations of Agent.
Except to the extent otherwise provided in this Agreement, the Agent
assumes no obligations and shall not be subject to any liability under this
Agreement, the Pledge Agreement or any Purchase Contract in respect of the
obligations of the Holder of any Security thereunder. The Company agrees, and
each Holder of a Certificate, by his acceptance thereof, shall be deemed to
have agreed, that the Agent's execution of the Certificates on behalf of the
Holders shall be solely as agent and attorney-in-fact for the Holders, and that
the Agent shall have no obligation to perform such Purchase Contracts on behalf
of the Holders, except to the extent expressly provided in Article Five hereof.
Section 7.14. Tax Compliance.
(a) The Agent, on its own behalf and on behalf of the Company, will
comply with all applicable certification, information reporting and withholding
(including "backup" withholding) requirements imposed by applicable tax laws,
regulations or administrative practice with respect to (i) any payments made
with
68
respect to the Securities or (ii) the issuance, delivery, holding, transfer,
redemption or exercise of rights under the Securities. Such compliance shall
include, without limitation, the preparation and timely filing of required
returns and the timely payment of all amounts required to be withheld to the
appropriate taxing authority or its designated agent.
(b) The Agent shall comply with any written direction received from
the Company with respect to the application of such requirements to particular
payments or Holders or in other particular circumstances, and may for purposes
of this Agreement rely on any such direction in accordance with the provisions
of Section 7.1(a)(2) hereof.
(c) The Agent shall maintain all appropriate records documenting
compli ance with such requirements, and shall make such records available, on
written request, to the Company or its authorized representative within a
reasonable period of time after receipt of such request.
ARTICLE VIII
Supplemental Agreements
Section 8.1. Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Company and the Agent, at any
time and from time to time, may enter into one or more agreements supplemental
hereto, in form satisfactory to the Company and the Agent, for any of the
following purposes:
(1) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of
the Company herein and in the Certificates; or
(2) to add to the covenants of the Company for the
benefit of the Holders, or to surrender any right or power herein
conferred upon the Company; or
69
(3) to evidence and provide for the acceptance of
appointment hereunder by a successor Agent; or
(4) to make provision with respect to the rights of
Holders pursuant to the requirements of Section 5.6(b); or
(5) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other provisions
herein, or to make any other provisions with respect to such matters
or questions arising under this Agreement, provided such action shall
not adversely affect the interests of the Holders.
Section 8.2. Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than a majority of the
outstanding Purchase Contracts voting together as one Class, by Act of said
Holders delivered to the Company and the Agent, the Company, when authorized by
a Board Resolution, and the Agent may enter into an agreement or agreements
supplemental hereto for the purpose of modifying in any manner the terms of the
Purchase Contracts, or the provisions of this Agreement or the rights of the
Holders in respect of the Securities; provided, however, that, except as
contemplated herein, no such supplemental agreement shall, without the consent
of the Holder of each Outstanding Security affected thereby,
(1) change any Payment Date;
(2) change the amount or the type of Collateral required to
be Pledged to secure a Holder's Obligations under the Purchase
Contract, impair the right of the Holder of any Purchase Contract to
receive distributions on the related Collateral (except for the rights
of Holders of Income PRIDES to substitute the Treasury Securities for
the Pledge Preferred Securities or the rights of holders of Growth
PRIDES to substitute Preferred Securities for the Pledged Treasury
Securities) or otherwise adversely affect the Holder's rights in or to
such Collateral or adversely alter the rights in or to such
Collateral;
(3) reduce any Contract Adjustment Payments or any Deferred
Contract Adjustment Payment, or change any place where, or the coin or
currency in which, any Contract Adjustment Payments is payable;
70
(4) impair the right to institute suit for the
enforcement of any Purchase Contract;
(5) reduce the number of shares of Common Stock to be
purchased pursuant to any Purchase Contract, increase the price to
purchase shares of Common Stock upon settlement of any Purchase
Contract, change the Purchase Contract Settlement Date or otherwise
adversely affect the Holder's rights under any Purchase Contract; or
(6) reduce the percentage of the outstanding Purchase
Contracts the consent of whose Holders is required for any such
supplemental agreement;
provided, that if any amendment or proposal referred to above would adversely
affect only the Income PRIDES or the Growth PRIDES, then only the affected
class of Holder as of the record date for the Holders entitled to vote thereon
will be entitled to vote on such amendment or proposal, and such amendment or
proposal shall not be effective except with the consent of Holders of not less
than a majority of such class.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental agreement, but it
shall be sufficient if such Act shall approve the substance thereof.
Section 8.3. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby
of the agencies created by this Agreement, the Agent shall be entitled to
receive and (subject to Section 7.1) shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental agreement
is authorized or permitted by this Agreement. The Agent may, but shall not be
obligated to, enter into any such supplemental agreement which affects the
Agent's own rights, duties or immunities under this Agreement or otherwise.
Section 8.4. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this Article,
this Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Agreement for all purposes; and every
Holder of
71
Certificates theretofore or thereafter authenticated, executed on behalf of the
Holders and delivered hereunder shall be bound thereby.
Section 8.5. Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by the Agent, bear a notation in form
approved by the Agent as to any matter provided for in such supplemental
agreement. If the Company shall so determine, new Certificates so modified as
to conform, in the opinion of the Agent and the Company, to any such
supplemental agreement may be prepared and executed by the Company and
authenticated, executed on behalf of the Holders and delivered by the Agent in
exchange for Outstanding Certificates.
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
Section 9.1. Covenant Not to Merge, Consolidate, Sell or Convey Property
Except Under Certain Conditions.
The Company covenants that it will not merge or consolidate with any
other Person or sell, assign, transfer, lease or convey all or substantially
all of its properties and assets to any Person or group of affiliated Persons
in one transaction or a series of related transactions, unless (i) either the
Company shall be the continuing corporation, or the successor (if other than
the Company) shall be a corporation organized and existing under the laws of
the United States of America or a State thereof or the District of Columbia and
such corporation shall expressly assume all the obligations of the Company
under the Purchase Contracts, this Agreement and the Pledge Agree ment by one
or more supplemental agreements in form reasonably satisfactory to the Agent
and the Collateral Agent, executed and delivered to the Agent and the Collat
eral Agent by such corporation, and (ii) the Company or such successor
corporation, as the case may be, shall not, immediately after such merger or
consolidation, or such sale, assignment, transfer, lease or conveyance, be in
default in the performance of any covenant or condition hereunder, under any of
the Securities or under the Pledge Agreement.
72
Section 9.2. Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance and upon any such assumption by a successor corporation in
accordance with Section 9.1, such successor corporation shall succeed to and be
substituted for the Company with the same effect as if it had been named herein
as the Company. Such successor corporation thereupon may cause to be signed,
and may issue either in its own name or in the name of Cendant Corporation any
or all of the Certificates evidencing Securities issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Agent; and, upon the order of such successor corporation, instead of the
Company, and subject to all the terms, conditions and limitations in this
Agreement prescribed, the Agent shall authenticate and execute on behalf of the
Holders and deliver any Certificates which previously shall have been signed
and delivered by the officers of the Company to the Agent for authentication
and execution, and any Certificate evidencing Securities which such successor
corporation thereafter shall cause to be signed and delivered to the Agent for
that purpose. All the Certificates so issued shall in all respects have the
same legal rank and benefit under this Agreement as the Certificates
theretofore or thereafter issued in accordance with the terms of this Agreement
as though all of such Certificates had been issued at the date of the execution
hereof.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance such change in phraseology and form (but not in substance)
may be made in the Certificates evidencing Securities thereafter to be issued
as may be appropriate.
Section 9.3. Opinion of Counsel Given to Agent.
The Agent, subject to Sections 7.1 and 7.3, shall receive an Opinion
of Counsel as conclusive evidence that any such consolidation, merger, sale,
assignment, transfer, lease or conveyance, and any such assumption, complies
with the provisions of this Article and that all conditions precedent to the
consummation of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance have been met.
73
ARTICLE X
Covenants
Section 10.1. Performance Under Purchase Contracts.
The Company covenants and agrees for the benefit of the Holders from
time to time of the Securities that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
Section 10.2. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The City of New
York an office or agency where Certificates may be presented or surrendered for
acquisition of shares of Common Stock upon settlement of the Purchase Contracts
on the Purchase Contract Settlement Date or Early Settlement and for transfer
of Collateral upon occurrence of a Termination Event, where Certificates may be
surrendered for registration of transfer or exchange, for a Collateral
Substitution or re-establishment of an Income PRIDES and where notices and
demands to or upon the Company in respect of the Securities and this Agreement
may be served. The Company will give prompt written notice to the Agent of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Agent with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office, and the Company hereby appoints the Agent as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where Certificates may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York for such purposes. The Company will
give prompt written notice to the Agent of any such designation or rescission
and of any change in the location of any such other office or agency. The
Company hereby designates as the place of payment for the Securities the
Corporate Trust Office and appoints the Agent at its Corporate Trust Office as
paying agent in such city.
74
Section 10.3. Company to Reserve Common Stock.
The Company shall at all times prior to the Purchase Contract
Settlement Date reserve and keep available, free from preemptive rights, out of
its authorized but unissued Common Stock the full number of shares of Common
Stock issuable against tender of payment in respect of all Purchase Contracts
constituting a part of the Securities evidenced by Outstanding Certificates.
Section 10.4. Covenants as to Common Stock.
The Company covenants that all shares of Common Stock which may be
issued against tender of payment in respect of any Purchase Contract
constituting a part of the Outstanding Securities will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable.
Section 10.5. Statements of Officer of the Company as to Default.
The Company will deliver to the Agent, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officer's
Certificate, stating whether or not to the best knowledge of the signer thereof
the Company is in default in the performance and observance of any of the
terms, provisions and conditions hereof, and if the Company shall be in
default, specifying all such defaults and the nature and status thereof of
which such Officer may have knowledge.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
CENDANT CORPORATION
By: /s/ James E. Buckman
-----------------------------
Name: James E. Buckman
Title: Senior Executive Vice
President and General Counsel
THE FIRST NATIONAL BANK OF CHICAGO,
as Purchase Contract Agent
By: /s/ Steve M. Husbands
-----------------------------
Name: Steve M. Husbands
Title: Assistant Vice President
EXHIBIT A
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) to the
Com pany or its agent for registration of transfer, exchange or payment, and
any Certificate issued is registered in the name of Cede & Co., or such other
name as 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.
No. _____ Cusip No.
Number of Income PRIDES _______
Form of Face of Income PRIDES Certificate
6.45% Income PRIDES
This Income PRIDES Certificate certifies that ___________ is the
registered Holder of the number of Income PRIDES set forth above. Each Income
PRIDES represents (i) either (a) beneficial ownership by the Holder of one
6.45% Trust Originated Preferred Security (the "Preferred Security") of Cendant
Capital I, a Delaware statutory business trust (the "Trust"), having a stated
liquidation amount of $50, subject to the Pledge of such Preferred Security by
such Holder pursuant to the Pledge Agreement or (b) upon the occurrence of a
Tax Event Redemption prior to the Purchase Contract Settlement Date, the
appropriate Applicable Ownership Interest of the Treasury Portfolio, subject to
the Pledge of such Applicable Owner-
ship Interest of the Treasury Portfolio by such Holder pursuant to the Pledge
Agreement, and (ii) the rights and obligations of the Holder under one
Purchase Contract with Cendant Corporation, a Delaware corporation (the
"Company"). All capitalized terms used herein which are defined in the Purchase
Contract Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, constituting part of each Income PRIDES evidenced hereby have
been pledged to the Collateral Agent, for the benefit of the Company, to secure
the obligations of the Holder under the Purchase Contract comprising a portion
of such Income PRIDES.
The Pledge Agreement provides that all payments of the Stated Amount
of or the appropriate Applicable Ownership Interest (as specified in clause (A)
of the definition of such term) in the Treasury Portfolio, as the case may be,
or cash distributions on, any Pledged Preferred Securities (as defined in the
Pledge Agreement) or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, constituting part of the Income PRIDES
received by the Collateral Agent shall be paid by the Collateral Agent by wire
transfer in same day funds (i) in the case of (A) cash distributions with
respect to Pledged Preferred Securities or the appropriate Applicable Ownership
Interest (as specified in clause (B) of the definition of such term) of the
Treasury Portfolio, as the case may be, and (B) any payments of the Stated
Amount or the appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such terms) of the Treasury Portfolio, as the case may
be, with respect to any Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, that have
been released from the Pledge pursuant to the Pledge Agreement, to the Agent to
the account designated by the Agent, no later than 2:00 p.m., New York City
time, on the Business Day such payment is received by the Collateral Agent
(provided that in the event such payment is received by the Collateral Agent on
a day that is not a Business Day or after 12:30 p.m., New York City time, on a
Business Day, then such payment shall be made no later than 10:30 a.m., New
York City time, on the next succeeding Business Day) and (ii) in the case of
payments of the Stated Amount or the appropriate Applicable Ownership Interest
(as specified in clause (A) of the definition of such term) in the Treasury
Portfolio, as the case may be, of any Pledged Preferred Securities or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) in the Treasury Portfolio, as the case may be, to the
Company on the Purchase Contract Settlement Date (as defined herein) in
accordance with the terms of the Pledge Agreement, in full satisfaction of the
A-2
respective obligations of the Holders of the Income PRIDES of which such
Pledged Preferred Securities or the Treasury Portfolio, as the case may be, are
a part under the Purchase Contracts forming a part of such Income PRIDES.
Distributions on any Preferred Security or the appropriate Applicable Ownership
Interest (as specified in clause (B) of the definition of such term) of the
Treasury Portfolio, as the case may be, forming part of an Income PRIDES
evidenced hereby which are payable quarterly in arrears on February 16, May 16,
August 16 and November 16 each year, commencing May 16, 1998 (a "Payment
Date"), shall, subject to receipt thereof by the Agent from the Collateral
Agent, be paid to the Person in whose name this Income PRIDES Certifi cate (or
a Predecessor Income PRIDES Certificate) is registered at the close of business
on the Record Date for such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this
Income PRIDES Certificate to purchase, and the Company to sell, on February 16,
2001 (the "Purchase Contract Settlement Date"), at a price equal to $50 (the
"Stated Amount"), a number of shares of Common Stock, $.01 par value ("Common
Stock"), of the Company, equal to the Settlement Rate, unless on or prior to
the Purchase Contract Settlement Date there shall have occurred a Termination
Event or an Early Settlement with respect to the Income PRIDES of which such
Purchase Contract is a part, all as provided in the Purchase Contract Agreement
and more fully described on the reverse hereof. The purchase price (the
"Purchase Price") for the shares of Common Stock purchased pursuant to each
Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the
Purchase Contract Settlement Date by application of payment received in respect
of the Stated Amount or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as the case may be, of the Pledged Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, pledged to secure the obligations under such Purchase Contract of
the Holder of the Income PRIDES of which such Purchase Contract is a part.
The Company shall pay, on each Payment Date, in respect of each
Purchase Contract forming part of an Income PRIDES evidenced hereby an amount
(the "Contract Adjustment Payments") equal to 1.05% per annum of the Stated
Amount, computed on the basis of a 360 day year of twelve 30 day months,
subject to deferral at the option of the Company as provided in the Purchase
Contract Agreement and more fully described on the reverse hereof. Such
Contract Adjustment Payments shall be payable to the Person in whose name this
Income PRIDES Certificate (or a Predecessor Income PRIDES Certificate) is
registered at the close of business on the Record Date for such Payment Date.
A-3
Distributions on the Preferred Securities or the appropriate
Applicable Ownership Interest (as specified in clause (B) of the definition of
such term) of the Treasury Portfolio, as the case may be, and Contract
Adjustment Payments will be payable at the office of the Agent in The City of
New York or, at the option of the Company, by check mailed to the address of
the Person entitled thereto as such address appears on the Income PRIDES
Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Income PRIDES Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
A-4
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
CENDANT CORPORATION
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By: THE FIRST NATIONAL BANK OF CHICAGO,
not individually but solely
as Attorney-in-Fact of such Holder
By:
---------------------------------
Name:
Title:
Dated:
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Income PRIDES Certificates referred to in the
within mentioned Purchase Contract Agreement.
By: THE FIRST NATIONAL BANK OF CHICAGO, as
Purchase Contract Agent
By:
--------------------------------------
Authorized Officer
(Form of Reverse of Income PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of March 2, 1998 (as may be supplemented from time
to time, the "Purchase Contract Agreement"), between the Company and The First
National Bank of Chicago, as Purchase Contract Agent (herein called the
"Agent"), to which Purchase Contract Agreement and supplemental agreements
thereto reference is hereby made for a description of the respective rights,
limitations of rights, obliga tions, duties and immunities thereunder of the
Agent, the Company, and the Holders and of the terms upon which the Income
PRIDES Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Income PRIDES Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount (the "Purchase
Price"), a number of shares of Common Stock of the Company equal to the
Settlement Rate, unless, on or prior to the Purchase Contract Settlement Date,
there shall have occurred a Termination Event with respect to the Security of
which such Purchase Contract is a part or an Early Settlement shall have
occurred. The "Settlement Rate" is equal to (a) if the Applicable Market Value
(as defined below) is equal to or greater than $48.10 (the "Threshold
Appreciation Price"), 1.0395 shares of Common Stock per Purchase Contract, (b)
if the Applicable Market Value is less than the Threshold Appreciation Price
but is greater than $37.00 , the number of shares of Common Stock per Purchase
Contract equal to the Stated Amount divided by the Applicable Market Value and
(c) if the Applicable Market Amount is less than or equal to $37.00, 1.3514
shares of Common Stock per Purchase Contract, in each case subject to
adjustment as provided in the Purchase Contract Agreement. No fractional shares
of Common Stock will be issued upon settlement of Purchase Contracts, as
provided in the Purchase Contract Agreement.
Each Purchase Contract evidenced hereby, which is settled either
through Early Settlement or Cash Settlement, shall obligate the Holder of the
related Income PRIDES to purchase at the Purchase Price, and the Company to
sell, a number of newly issued shares of Common Stock equal to the Early
Settlement Rate or the Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the
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third Trading Day immediately preceding the Purchase Contract Settlement
Date. The "Closing Price" of the Common Stock on any date of determination
means the closing sale price (or, if no closing price is reported, the last
reported sale price) of the Common Stock on the New York Stock Exchange (the
"NYSE") on such date or, if the Common Stock is not listed for trading on the
NYSE on any such date, as reported in the composite transactions for the
principal United States securities exchange on which the Common Stock is so
listed, or if the Common Stock is not so listed on a United States national or
regional securities exchange, as reported by The Nasdaq Stock Market, or, if
the Common Stock is not so reported, the last quoted bid price for the Common
Stock in the over-the-counter market as reported by the National Quotation
Bureau or similar organization, or, if such bid price is not available, the
market value of the Common Stock on such date as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Company. A "Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Income PRIDES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting a Cash Settlement, or an Early Settlement or from the
proceeds of a remarketing of the related Pledged Preferred Securities of such
holders. A Holder of Income PRIDES who does not elect, on or prior to 5:00 p.m.
New York City time on the fifth Business Day immediately preceding the Purchase
Contract Settlement Date, to make an effective Cash Settlement or an Early
Settlement, shall pay the Purchase Price for the shares of Common Stock to be
issued under the related Purchase Contract from the Proceeds of the sale of the
related Pledged Preferred Securities held by the Collateral Agent. Such sale
will be made by the Remarketing Agent pursuant to the terms of the Remarketing
Agreement and the Remarketing Under writing Agreement on the third Business Day
immediately preceding the Purchase Contract Settlement Date. If, as provided in
the Purchase Contract Agreement, upon the occurrence of a Failed Remarketing
the Collateral Agent, for the benefit of the Company, exercises its rights as a
secured creditor with respect to the Pledged Preferred Securities related to
this Income PRIDES certificate, any accrued and unpaid distributions (including
deferred distributions) on such Pledged Preferred
A-8
Securities will become payable by the Company to the holder of this Income
PRIDES Certificate in the manner provided for in the Purchase Contract
Agreement.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate purchase
price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
Each Purchase Contract evidenced hereby and all obligations and rights
of the Company and the Holder thereunder shall terminate if a Termination Event
shall have occurred. Upon the occurrence of a Termination Event, the Company
shall give written notice to the Agent and to the Holders, at their addresses
as they appear in the Income PRIDES Register. Upon and after the occurrence of
a Termination Event, the Collateral Agent shall release the Pledged Preferred
Security (as defined in the Pledge Agreement) or the appropriate Applicable
Ownership Interest of the Treasury Portfolio forming a part of each Income
PRIDES, or the Liquidation Distribution received in respect of such Pledged
Preferred Security, from the Pledge. An Income PRIDES shall thereafter
represent the right to receive the Preferred Security or the appropriate
Applicable Ownership Interest of the Treasury Portfolio forming a part of such
Income PRIDES, or the Liquidation Distribution received in respect of such
Preferred Security, in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Pledged
Pre ferred Securities. Upon receipt of notice of any meeting at which holders
of Pre ferred Securities are entitled to vote or upon the solicitation of
consents, waivers or proxies of holders of Preferred Securities, the Agent
shall, as soon as practicable thereafter, mail to the Income PRIDES holders a
notice (a) containing such information as is contained in the notice or
solicitation, (b) stating that each Income PRIDES holder on the record date set
by the Agent therefor (which, to the extent possible, shall be the same date as
the record date for determining the holders of Preferred Securities entitled to
vote) shall be entitled to instruct the Agent as to the exercise of the voting
rights pertaining to the Preferred Securities constituting a part of such
holder's Income PRIDES and (c) stating the manner in which such instructions
may be given. Upon the written request of the Income PRIDES Holders on such
record date, the Agent shall endeavor insofar as practicable to vote or cause
to be voted, in accordance with the instructions set forth in such requests,
the maximum number of Preferred Securities as to which any particular voting
instructions are received. In
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the absence of specific instructions from the Holder of an Income PRIDES, the
Agent shall abstain from voting the Preferred Security evidenced by such Income
PRIDES.
Upon the occurrence of an Investment Company Event or liquidation of
the Trust, a principal amount of the Debentures constituting the assets of the
Trust and underlying the Preferred Securities equal to the aggregate Stated
Amount of the Pledged Preferred Securities shall be delivered to the Collateral
Agent in exchange for Pledged Preferred Securities. Thereafter, the Debentures
shall be held by the Collateral Agent to secure the obligations of each Holder
of Income PRIDES to purchase shares of Common Stock under the Purchase
Contracts constituting a part of such Income PRIDES. Following the liquidation
of the Trust, the Holders and the Collateral Agent shall have such security
interests, rights and obligations with respect to the Debentures as the Holders
and the Collateral Agent had in respect of the Pledged Preferred Securities,
and any reference in the Purchase Contract Agreement or Pledge Agreement to the
Preferred Securities shall be deemed to be a reference to the Debentures.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event Redemp-
tion Date with respect to the Applicable Principal Amount of Debentures shall
be delivered to the Collateral Agent in exchange for the Pledged Preferred
Securities. Thereafter, pursuant to the terms of the Pledge Agreement, the
Collateral Agent for the benefit of the Company will apply an amount equal to
the Redemption Amount of such Redemption Price to purchase, the Treasury
Portfolio and promptly remit the remaining portion of such Redemption Price to
the Agent for payment to the Holders of such Income PRIDES.
Following the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Holders of Income PRIDES and the
Collateral Agent shall have such security interests rights and obligations with
respect to the Treasury Portfolio as the Holder of Income PRIDES and the
Collateral Agent had in respect of the Preferred Security or Debentures, as the
case may be, subject to the Pledge thereof as provided in Articles II, III, IV,
V and VI, of the Pledge Agreement and any reference herein to the Preferred
Security or the Debenture shall be deemed to be reference to such Treasury
Portfolio.
The Income PRIDES Certificates are issuable only in registered form
and only in denominations of a single Income PRIDES and any integral multiple
thereof.
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The transfer of any Income PRIDES Certificate will be registered and Income
PRIDES Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Income PRIDES Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents permitted by
the Purchase Contract Agreement. No service charge shall be required for any
such registration of transfer or exchange, but the Company and the Agent may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. A holder who elects to substitute a
Treasury Security for Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, thereby creating Growth PRIDES,
shall be responsible for any fees or expenses payable in connection therewith.
Except as provided in the Purchase Contract Agreement, for so long as the
Purchase Contract underlying an Income PRIDES remains in effect, such Income
PRIDES shall not be separable into its constituent parts, and the rights and
obligations of the Holder of such Income PRIDES in respect of the Preferred
Security or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, and Purchase Contract constituting such Income
PRIDES may be transferred and exchanged only as an Income PRIDES. The holder of
an Income PRIDES may substitute for the Pledged Preferred Securities or the
appropriate Applicable Owner ship Interest of the Treasury Portfolio securing
its obligation under the related Purchase Contract Treasury Securities in an
aggregate principal amount equal to the aggregate Stated Amount of the Pledged
Preferred Securities or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) in the Treasury
Portfolio in accordance with the terms of the Purchase Contract Agreement and
the Pledge Agreement. From and after such Collateral Substitution, the Security
for which such Pledged Treasury Securities secures the holder's obliga tion
under the Purchase Contract shall be referred to as a "Growth PRIDES." A Holder
may make such Collateral Substitution only in integral multiples of 20 Income
PRIDES for 20 Growth PRIDES; provided, however, that if a Tax Event Redemp tion
has occurred and the Treasury Portfolio has become a component of the Income
PRIDES, a Holder may make such Collateral Substitutions only in integral
multiples of 160,000 Income PRIDES for 160,000 Growth PRIDES. Such Collateral
Substitu tion may cause the equivalent aggregate principal amount of this
Certificate to be increased or decreased; provided, however, the equivalent
aggregate principal amount outstanding under this Income PRIDES Certificate
shall not exceed $200,000,000. All such adjustments to the equivalent aggregate
principal amount of this Income PRIDES Certificate shall be duly recorded by
placing an appropriate notation on the Schedule attached hereto.
A-11
A Holder of Growth PRIDES may create or recreate Income PRIDES by (a)
delivering to the Collateral Agent Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, with a Stated Amount,
in the case of such Preferred Securities, or with the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, in the case of such appropriate Applicable Ownership
Interest of the Treasury Portfolio, equal to the aggregate principal amount of
the Pledged Treasury Securities in
exchange for the release of such Pledged Treasury Securities in accordance with
the terms of the Purchase Contract Agreement and the Pledge Agreement and (b)
(i) in the event that Contract Adjustment Payments are at a higher rate for
Income PRIDES than for Growth PRIDES, by delivering to the Agent cash in an
amount equal to the excess of the Contract Adjustment Payments that would have
accrued since the last payment date through the date of substitution on the
Income PRIDES being created or recreated by such Holders, over the Contract
Adjustment Payments that have accrued over the same time period on the related
Growth PRIDES .
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, the Contract Adjustment Payments payable in respect of each
Pur chase Contract to the Person in whose name the Income PRIDES Certificate
evidenc ing such Purchase Contract is registered at the close of business on
the Record Date for such Payment Date. Contract Adjustment Payments will be
payable at the office of the Agent in The City of New York or, at the option of
the Company, by check mailed to the address of the Person entitled thereto at
such address as it appears on the Income PRIDES Register.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election to
defer such payment (specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments so deferred
shall bear additional Contract Adjustment Payments thereon at the rate of 7.5%
per annum (computed on the basis of a 360 day year of twelve 30 day months),
compounding on each succeeding Payment Date, until paid in full (such deferred
installments of Contract Adjustment Payments, if any, together with the
additional Contract Adjustment Payments accrued thereon, are referred to herein
as the "Deferred Contract Adjustment Payments"). Deferred Contract Adjustment
Payments, if any, shall be due on the next succeeding Payment Date except to
the extent that payment is deferred pursuant
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to the Purchase Contract Agreement. No Contract Adjustment Payments may be
deferred to a date that is after the Purchase Contract Settlement Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settle ment Date, the Holder of this Income PRIDES Certificate will receive on
the Pur chase Contract Settlement Date, in lieu of a cash payment, a number of
shares of Common Stock equal to (x) the aggregate amount of Deferred Contract
Adjustment
Payments payable to the Holder of this Income PRIDES Certificate divided by (y)
the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then until the Deferred Contract Adjustment Pay
ments have been paid, the Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or make guarantee
payments with respect to the foregoing (other than (i) purchases or
acquisitions of capital stock of the Company in connection with the
satisfaction by the Company of its obligations under any employee or agent
benefit plans or the satisfaction by the Company of its obligations pursuant to
any contract or security outstanding on the date of such event requiring the
Company to purchase capital stock of the Company, (ii) as a result of a
reclassification of the Company's capital stock or the exchange or conversion
of one class or series of the Company's capital stock for another class or
series of the Company's capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged, (iv) dividends or distributions in capital stock of the Company (or
rights to acquire capital stock) or repurchases or redemptions of capital
stock solely from the issuance or exchange of capital stock or (v) redemptions
or repurchases of any rights outstanding under a shareholder rights plan and a
declaration thereunder of a dividend of rights in the future).
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments or any Deferred Contract Adjustment Payments, shall
immediately and automatically terminate, without the necessity of any notice or
action by any Holder, the Agent or the Company, if, on or prior to the Purchase
Contract Settlement Date, a Termination Event shall have occurred. Upon the
occurrence of a Termination
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Event, the Company shall promptly but in no event later than two Business Days
thereafter give written notice to the Agent, the Collateral Agent and to the
Holders, at their addresses as they appear in the Income PRIDES Register. Upon
and after the occurrence of a Termination Event, the Collateral Agent shall
release the Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, from the Pledge in
accordance with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $1,000 or an
integral multiple thereof may be settled early ("Early Settlement") as provided
in the Purchase Con tract Agreement; provided, however, that if a Tax Event
Redemption has occurred and the Treasury Portfolio has become a component of
the Income PRIDES, Holders may early settle Income PRIDES only in integral
multiples of 160,000 Income PRIDES. In order to exercise the right to effect
Early Settlement with respect to any Purchase Contracts evidenced by this
Income PRIDES Certificate, the Holder of this Income PRIDES Certificate shall
deliver this Income PRIDES Certificate to the Agent at the Corporate Trust
Office duly endorsed for transfer to the Company or in blank with the form of
Election to Settle Early set forth below duly completed and accompanied by
payment in the form of immediately available funds payable to the order of the
Company in an amount (the "Early Settlement Amount") equal to (i) the product
of (A) the Stated Amount times (B) the number of Purchase Contracts with
respect to which the Holder has elected to effect Early Settlement, plus (ii)
if such delivery is made with respect to any Purchase Contracts during the
period from the close of business on any Record Date for any Payment Date to
the opening of business on such Payment Date, an amount equal to the Contract
Adjustment Payments payable on such Payment Date with respect to such Purchase
Contracts. Upon Early Settlement of Purchase Contracts by a Holder of the
related Securities, the Pledged Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio underlying such
Securities shall be released from the Pledge as provided in the Pledge
Agreement and the Holder shall be entitled to receive a number of shares of
Common Stock on account of each Purchase Contract forming part of a Income
PRIDES as to which Early Settlement is effected equal to the Early Settlement
Rate; provided however, that upon the Early Settlement of the Purchase
Contracts, the Holder thereof will forfeit the right to receive any Deferred
Contract Adjustment Payments, if any, on such Purchase Contracts. The Early
Settlement Rate shall initially be equal to 1.0395 shares of
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Common Stock and shall be adjusted in the same manner and at the same time as
the Settlement Rate is adjusted as provided in the Purchase Contract Agreement.
Upon registration of transfer of this Income PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the
part of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract
Agreement and the Purchase Contracts evidenced hereby and the transferor shall
be released from the obligations under the Purchase Contracts evidenced by this
Income PRIDES Certificate. The Company covenants and agrees, and the Holder, by
its acceptance hereof, likewise covenants and agrees, to be bound by the
provisions of this paragraph.
The Holder of this Income PRIDES Certificate, by its acceptance
hereof, authorizes the Agent to enter into and perform the related Purchase
Contracts forming part of the Income PRIDES evidenced hereby on his behalf as
his attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the
event that the Company becomes the subject of a case under the Bankruptcy Code,
agrees to be bound by the terms and provisions thereof, covenants and agrees to
perform his obligations under such Purchase Contracts, consents to the
provisions of the Purchase Contract Agreement, authorizes the Agent to enter
into and perform the Pledge Agreement on his behalf as its attorney-in-fact,
and consents to the Pledge of the Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
underlying this Income PRIDES Certificate pursuant to the Pledge Agreement. The
Holder further covenants and agrees, that, to the extent and in the manner
provided in the Purchase Contract Agreement and the Pledge Agreement, but
subject to the terms thereof, payments in respect to the Stated Amount of the
Pledged Preferred Securities, or the appropriate Applicable Ownership Interest
(as specified in clause (A) of the definition of such term) of the Treasury
Portfolio, on the Purchase Contract Settlement Date shall be paid by the
Collateral Agent to the Company in satisfaction of such Holder's obligations
under such Purchase Contract and such Holder shall acquire no right, title or
interest in such payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
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The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Income PRIDES Certificate
is registered as the owner of the Income PRIDES evidenced hereby for the
purpose of receiving payments of distributions payable quarterly on the
Preferred Securities, receiving payments of Contract Adjustment Payments and
any Deferred Contract Adjustment Payments, performance of the Purchase
Contracts and for all other purposes whatsoever, whether or not any payments in
respect thereof be overdue and notwithstanding any notice to the contrary, and
neither the Company, the Agent nor any such agent shall be affected by notice
to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
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ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ------------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
------------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not in the above list.
---------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________________________________
_______________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Income PRIDES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing attorney to transfer said Income PRIDES
Certificates on the books of Cendant Corporation with full power of
substitution in the premises.
Dated:
--------------------- ------------------------
Signature
NOTICE: The signature to
this assignment must
correspond with the name
as it appears upon the
face of the within Income
PRIDES Certificates in
every particular, without
alteration or enlargement
or any change whatsoever.
Signature Guarantee: -------------------------
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SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Income PRIDES evidenced
by this Income PRIDES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned
at the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable
incident thereto.
Dated:
------------------- ------------------------------
Signature
Signature Guarantee:
---------
(if assigned to another person)
If shares are to be registered
in the name of and delivered to
REGISTERED HOLDER a Person other
than the Holder, please (i) print
such Person's name and address and
(ii) provide a guarantee of your
signature:
Please print name and address
of Registered Holder:
- -------------------------------- -------------------------------
Name Name
- -------------------------------- -------------------------------
Address Address
- -------------------------------- -------------------------------
- -------------------------------- -------------------------------
- -------------------------------- -------------------------------
Social Security or other
Taxpayer Identification
Number, if any -------------------------------
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ELECTION TO SETTLE EARLY
The undersigned Holder of this Income PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Income PRIDES evidenced by this Income
PRIDES Certificate specified below. The undersigned Holder directs that a
certificate for shares of Common Stock deliverable upon such Early Settlement
be registered in the name of, and delivered, together with a check in payment
for any fractional share and any Income PRIDES Certificate representing any
Income PRIDES evidenced hereby as to which Early Settlement of the related
Purchase Contracts is not effected, to the undersigned at the address indicated
below unless a different name and address have been indicated below. Pledged
Preferred Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, deliverable upon such Early Settlement
will be transferred in accordance with the transfer instructions set forth
below. If shares are to be registered in the name of a Person other than the
under signed, the undersigned will pay any transfer tax payable incident
thereto.
Dated:
------------------------ -------------------------------
Signature
Signature Guarantee:
-----------------------------
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Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
If shares of Common Stock or Income REGISTERED HOLDER
PRIDES Certificates are to be regis-
tered in the name of and delivered to
and Pledged Preferred Securities, or
the Treasury Portfolio, as the case may
be, are to be transferred to a Person
other than the Holder, please print such
Person's name and address:
Please print name and address of
Registered Holder:
- -------------------------------- -------------------------------
Name Name
- -------------------------------- -------------------------------
Address Address
- -------------------------------- -------------------------------
- -------------------------------- -------------------------------
- -------------------------------- -------------------------------
Social Security or other
Taxpayer Identification
Number, if any -------------------------------
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Transfer Instructions for Pledged Preferred Securities, or the Treasury
Portfolio, as the case may be, Transferable Upon Early Settlement or a
Termination Event:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
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[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global
Certificate have been made:
Principal Amount of
Amount of Amount of this Global Certificate
decrease in Principal increase in Principal following such decrease Signature of authorized
Amount of the Global Amount of the Global or officer of Trustee or
Date Certificate Certificate increase Securities Custodian
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EXHIBIT B
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF A CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) to the
Company or its agent for registration of transfer, exchange or payment, and any
Certificate issued is registered in the name of Cede & Co., or such other name
as requested by an authorized representative of The Depository Trust Company,
and any payment hereon is made to Cede & Co., ANY TRANS FER, 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.
No. Number of Growth PRIDES Cusip No.
Form of Face of Growth PRIDES Certificate
This Growth PRIDES Certificate certifies that __________ is the
registered Holder of the number of Growth PRIDES set forth above. Each Growth
PRIDES represents (i) a 1/20 undivided beneficial ownership interest of a
Treasury Security in an amount equal to $1,000 payable on February 15, 2001,
subject to the Pledge of such Treasury Security by such Holder pursuant to the
Pledge Agreement, and (ii) the rights and obligations of the Holder under one
Purchase Contract with Cendant Corporation, a Delaware corporation (the
"Company"). All capitalized terms used herein which are defined in the Purchase
Contract Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities constituting
part of each Growth PRIDES evidenced hereby have been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the Holder
under the Purchase Contract comprising a portion of such Growth PRIDES.
Each Purchase Contract evidenced hereby obligates the Holder of this
Growth PRIDES Certificate to purchase, and the Company, to sell, on February
16, 2001 (the
"Purchase Contract Settlement Date"), at a price equal to $50 (the "Stated
Amount"), a number of shares of Common stock, no par value per share ("Common
Stock"), of the Company equal to the Settlement Rate, unless on or prior to the
Purchase Contract Settlement Date there shall have occurred a Termination
Event or an Early Settlement with respect to the Growth PRIDES of which such
Purchase Contract is a part, all as provided in the Purchase Contract Agreement
and more fully described on the reverse hereof. The purchase price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby will be paid by application of the Proceeds from the Treasury Securities
pledged to secure the obligations under such Purchase Contract in accordance
with the terms of the Pledge Agreement.
The Company shall pay on each Payment Date in respect of each
Purchase Contract evidenced hereby an amount (the "Contract Adjustment
Payments") equal to 1.3% per annum of the Stated Amount, computed on the basis
of the actual number of days elapsed in a year of 360 day year of twelve 30 day
months, as the case may be, subject to deferral at the option of the Company as
provided in the Purchase Contract Agreement and more fully described on the
reverse hereof. Such Contract Adjustment Payments shall be payable to the
Person in whose name this Growth PRIDES Certificate (or a Predecessor Growth
PRIDES Certificate) is registered at the close of business on the Record Date
for such Payment Date.
Contract Adjustment Payments will be payable at the office of the
Agent in The City of New York or, at the option of the Company, by check mailed
to the address of the Person entitled thereto as such address appears on the
Growth PRIDES Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Growth PRIDES Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
B-2
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
CENDANT CORPORATION
By:
-----------------------------
Name:
Title:
By:
-----------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under
the Purchase Contracts)
By: THE FIRST NATIONAL BANK OF
CHICAGO, not individually but
solely as Attorney-in-Fact of
such Holder
By:
------------------------------
Name:
Title:
Dated:
B-3
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Growth PRIDES referred to in the within-mentioned
Purchase Contract Agreement.
By: THE FIRST NATIONAL BANK OF CHICAGO,
as Purchase Contract Agent
By:
----------------------------------
Authorized Officer
B-4
(Reverse of
Growth PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of March 2, 1998 (as may be supplemented from time
to time, the "Purchase Contract Agreement") between the Company and The First
National Bank of Chicago, as Purchase Contract Agent (including its successors
thereunder, herein called the "Agent"), to which the Purchase Contract
Agreement and supplemental agreements thereto reference is hereby made for a
description of the respective rights, limitations of rights, obligations,
duties and immunities thereunder of the Agent, the Company and the Holders and
of the terms upon which the Growth PRIDES Certificates are, and are to be,
executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Growth PRIDES Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount (the "Purchase
Price") a number of shares of Common Stock of the Company equal to the
Settlement Rate, unless on or prior to the Purchase Contract Settlement Date,
there shall have occurred a Termination Event or an Early Settlement with
respect to the Security of which such Purchase Contract is a part. The
"Settlement Rate" is equal to (a) if the Applicable Market Value (as defined
below) is equal to or greater than $48.10 (the "Threshold Appreciation Price"),
1.0395 shares of Common Stock per Purchase Contract, (b) if the Applicable
Market Value is less than the Threshold Appreciation Price but is greater than
$37.00, the number of shares of Common Stock per Purchase Contract equal to the
Stated Amount divided by the Applicable Market Value and (c) if the Applicable
Market Amount is less than or equal to $37.00, then 1.3514 shares of Common
Stock per Purchase Contract, in each case subject to adjustment as provided in
the Purchase Contract Agreement. No fractional shares of Common Stock will be
issued upon settlement of Purchase Contracts, as provided in the Purchase
Contract Agreement.
The "Applicable Market Value" means the average of the Closing Prices
per share of Common Stock on each of the twenty consecutive Trading Days ending
on the third Trading Day immediately preceding the Purchase Contract Settlement
Date. The "Closing Price" of the Common Stock on any date of determination
means the closing sale price (or, if no closing price is reported, the last
reported sale price) of the Common Stock on the New York Stock Exchange (the
"NYSE") on such date or, if the Common Stock is not listed for trading on the
NYSE on any such date, as reported in the composite transactions for the
principal United States securities exchange on which the Common Stock is so
listed, or if the Common Stock is not so listed on a United States national or
regional securities exchange, as reported by The Nasdaq Stock Market, or, if
the Common Stock is not so reported, the last quoted bid price for the Common
Stock in the over-the-counter market as reported by the National Quotation
Bureau or similar organization, or, if such bid price is not available, the
market value of the Common Stock on such date as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
B-5
Company. A "Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Growth PRIDES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting either an Early Settlement of each such Purchase Contract
or by applying a principal amount of the Pledged Treasury Securities underlying
such Holder's Growth PRIDES equal to the Stated Amount of such Purchase
Contract to the purchase of the Common Stock.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate purchase
price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
Each Purchase Contract evidenced hereby and all obligations and rights
of the Company and the Holder thereunder shall terminate if a Termination Event
shall have occurred. Upon the occurrence of a Termination Event, the Company
shall give written notice to the Agent and to the Holders, at their addresses
as they appear in the Growth PRIDES Register. Upon and after the occurrence of
a Termination Event, the Collateral Agent shall release the Pledged Treasury
Securities (as defined in the Pledge Agreement) forming a part of each Growth
PRIDES.
The Growth PRIDES Certificates are issuable only in registered form
and only in denominations of a single Growth PRIDES and any integral multiple
thereof. The transfer of any Growth PRIDES Certificate will be registered and
Growth PRIDES Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Growth PRIDES Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents
permitted by the Purchase Contract Agreement. No service charge shall be
required for any such registration of transfer or exchange, but the Company and
the Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A Holder who elects to
substitute Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, for Treasury
Securities, thereby recreating Income PRIDES, shall be responsible for any fees
or expenses associated therewith. Except as provided in the Purchase Contract
Agreement, for so long as the Purchase Contract underlying a Growth PRIDES
remains in effect, such Growth PRIDES shall not be separable into its
constituent parts, and the rights and obliga tions of the Holder of such Growth
PRIDES in respect of the Treasury Security and the Purchase Contract
constituting such Growth PRIDES may be transferred and exchanged only as a
Growth PRIDES. A Holder of Growth PRIDES may create or
B-6
recreate Income PRIDES by delivering to the Collateral Agent Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, with a Stated Amount, in the case of such Preferred Securities, or
with the appropriate Applicable Ownership Interest (as specified in clause (A)
of the definition of such term) of the Treasury Portfolio, in the case of such
appropriate Applicable Ownership Interest of the Treasury Portfolio, equal to
the aggregate principal amount of the Pledged Treasury Securities in exchange
for the release of such Pledged Treasury Securities in accordance with the
terms of the Purchase Contract Agreement and the Pledge Agreement. From and
after such substitution, the Holder's Security shall be referred to as an
"Income PRIDES." Such substitution may cause the equivalent aggregate principal
amount of this Certificate to be increased or decreased; provided, however, the
equivalent aggregate principal amount outstanding under this Growth PRIDES
Certificate shall not exceed $200,000,000. All such adjustments to the
equivalent aggregate principal amount of this Growth PRIDES Certificate shall
be duly recorded by placing an appropriate notation on the Schedule attached
hereto.
A Holder of an Income PRIDES may create or recreate a Growth PRIDES by
delivering to the Collateral Agent Treasury Securities in an aggregate
principal amount equal to the aggregate Stated Amount of the Pledged Preferred
Securities or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, as the
case may be, in exchange for the release of such Pledged Preferred Securities
or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement and (b) (i) in the event that Contract
Adjustment Payments are at a higher rate for Income PRIDES than for Growth
PRIDES, by delivering to the Agent cash in an amount equal to the excess of the
Contract Adjustment Payments that would have accrued since the last payment
date through the date of substitution on the Income PRIDES being created or
recreated by such Holders, over the Contract Adjustment Payments that have
accrued over the same time period on the related Growth PRIDES . Any such
recreation of a Growth PRIDES may be effected only in multiples of 20 Income
PRIDES for 20 Growth PRIDES; provided, however, if a Tax Event Redemption has
occurred and the Treasury Portfolio has become a component of the Income
PRIDES, a Holder may make such Collateral Substitution in integral multiples of
160,000 Income PRIDES for 160,000 Growth PRIDES.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, the Contract Adjustment Payments payable in respect of each
Purchase Contract to the Person in whose name the Growth PRIDES Certificate
evidencing such Purchase Contract is registered at the close of business on the
Record Date for such Payment Date. Contract Adjustment Payments will be payable
at the office of the Agent in The City of New York or, at the option of the
Company, by check mailed to the address of the Person entitled thereto at such
address as it appears on the Growth PRIDES Register.
B-7
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election to
defer such payment (specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments so deferred shall
bear additional Contract Adjustment Payments thereon at the rate of 7.5% per
annum (computed on the basis of a 360 day year of twelve 30 day months),
compounding on each succeeding Payment Date, until paid in full (such deferred
installments of Contract Adjustment Payments together with the additional
Contract Adjustment Payments accrued thereon, are referred to herein as the
"Deferred Contract Adjustment Payments"). Deferred Contract Adjustment
Payments, if any, shall be due on the next succeeding Payment Date except to
the extent that payment is deferred pursuant to the Purchase Contract
Agreement. No Contract Adjustment Payments may be deferred to a date that is
after the Purchase Contract Settlement Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, the Holder of this Growth PRIDES Certificate will receive on
the Purchase Contract Settlement Date, in lieu of a cash payment, a number of
Shares of Common Stock equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to the Holder of the Growth PRIDES Certificate
divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not declare or pay dividends on,
make distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or make guarantee
payments with respect to the foregoing (other than (i) purchases or
acquisitions of shares of capital stock of the Company in connection with the
satisfaction by the Company of its obligations under any employee or agent
benefit plans or the satisfaction by the Company of its obligations pursuant to
any contract or security outstanding on the date of such event requiring the
Company to purchase capital stock of the Company, (ii) as a result of a
reclassification of the Company's capital stock or the exchange or conversion
of one class or series of the Company's capital stock for another class or
series of the Company's capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion
or exchange provisions of the Company's capital stock or the security being
converted or exchanged, (iv) dividends or distributions in capital stock of the
Company (or rights to acquire capital stock) or repurchases or redemp tions of
capital stock solely from the issuance or exchange of capital stock or (v)
redemptions or repurchases of any rights outstanding under a shareholder rights
plan and the declaration thereunder of a dividend of right in the future).
B-8
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay Contract Adjustment
Payments or any Deferred Contract Adjustment Payments, shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Purchase Contract
Settlement Date, a Termination Event shall have occurred. Upon the occurrence
of a Termination Event, the Company shall promptly but in no event later than
two business days thereafter give written notice to the Agent, the Collateral
Agent and to the Holders, at their addresses as they appear in the Growth
PRIDES Register. Upon and after the occurrence of a Termination Event, the
Collateral Agent shall release the Treasury Securities from the Pledge in
accordance with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $1,000 or an
integral multiple thereof may be settled early ("Early Settlement") as provided
in the Purchase Contract Agreement. In order to exercise the right to effect
Early Settlement with respect to any Purchase Contracts evidenced by this
Growth PRIDES Certificate, the Holder of this Growth PRIDES Certifi cate shall
deliver this Growth PRIDES Certificate to the Agent at the Corporate Trust
Office duly endorsed for transfer to the Company or in blank with the form of
Election to Settle Early set forth below duly completed and accompanied by
payment in the form of immediately available funds payable to the order of the
Company in an amount (the "Early Settlement Amount") equal to (i) the product
of (A) the Stated Amount times (B) the number of Purchase Contracts with
respect to which the Holder has elected to effect Early Settlement, plus (ii)
if such delivery is made with respect to any Purchase Contracts during the
period from the close of business on any Record Date for any Payment Date to
the opening of business on such Payment Date, an amount equal to the Contract
Adjustment Payments payable, if any, on such Payment Date with respect to such
Purchase Contracts. Upon Early Settlement of Purchase Contracts by a Holder of
the related Securities, the Pledged Treasury Securities underlying such
Securities shall be released from the Pledge as provided in the Pledge
Agreement and the Holder shall be entitled to receive, a number of shares of
Common Stock on account of each Purchase Contract forming part of a Growth
PRIDES as to which Early Settlement is effected equal to 1.0395 shares of
Common Stock per Purchase Contract (the "Early Settlement Rate"); provided
however, that upon the Early Settlement of the Purchase Contracts, the Holder
thereof will forfeit the right to receive any Deferred Contract Adjustment
Payments on such Purchase Contracts. The Early Settlement Rate shall be
adjusted in the same manner and at the same time as the Settlement Rate is
adjusted as provided in the Purchase Contract Agreement.
Upon registration of transfer of this Growth PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the
part of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract
Agreement and the Purchase Contracts evidenced hereby and
B-9
the transferor shall be released from the obligations under the Purchase
Contracts evidenced by this Growth PRIDES Certificate. The Company covenants
and agrees, and the Holder, by his acceptance hereof, likewise covenants and
agrees, to be bound by the provisions of this paragraph.
The Holder of this Growth PRIDES Certificate, by his acceptance
hereof, authorizes the Agent to enter into and perform the related Purchase
Contracts forming part of the Growth PRIDES evidenced hereby on his behalf as
its attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the
event that the Company becomes the subject of a case under the Bankruptcy
Code, agrees to be bound by the terms and provisions thereof, covenants and
agrees to perform its obligations under such Purchase Contracts, consents to
the provisions of the Purchase Contract Agreement, authorizes the Agent to
enter into and perform the Pledge Agreement on his behalf as his
attorney-in-fact, and consents to the Pledge of the Treasury Securities
underlying this Growth PRIDES Certificate pursuant to the Pledge Agreement. The
Holder further covenants and agrees, that, to the extent and in the manner
provided in the Purchase Contract Agreement and the Pledge Agreement, but
subject to the terms thereof, payments in respect to the Stated Amount of the
Pledged Treasury Securities on the Purchase Contract Settlement Date shall be
paid by the Collateral Agent to the Company in satisfaction of such Holder's
obligations under such Purchase Contract and such Holder shall acquire no
right, title or interest in such payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Growth PRIDES Certificate
is registered as the owner of the Growth PRIDES evidenced hereby for the
purpose of receiving payments of interest on the Treasury Securities, receiving
payments of Contract Adjustment Payments and any Deferred Contract Adjustment
Payments, performance of the Purchase Contracts and for all other purposes
whatsoever, whether or not any payments in respect thereof be overdue and
notwithstanding any notice to the contrary, and neither the Company, the Agent
nor any such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
B-10
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ------------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
---------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not in the above list.
---------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________________________________
_______________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Growth PRIDES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing
- -----------------------------------------------------------------------------
attorney to transfer said Growth PRIDES Certificates on the books of Cendant
Corporation with full power of substitution in the premises.
Dated:
--------------------- ------------------------
Signature
NOTICE: The signature to
this assignment must
correspond with the name
as it appears upon the
face of the within Growth
PRIDES Certificates in
every particular, without
alteration or enlargement
or any change whatsoever.
Signature Guarantee: -------------------------
B-11
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Growth PRIDES evidenced
by this Growth PRIDES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned
at the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable
incident thereto.
Dated:
------------------------------- -----------------------------
Signature
Signature Guarantee:
If shares are to be registered
in the name of and delivered to REGISTERED HOLDER
a Person other than the Holder,
please print such Person's name
and address:
Please print name and address of
Registered Holder:
- -------------------------------- -------------------------------
Name Name
- -------------------------------- -------------------------------
Address Address
- -------------------------------- -------------------------------
- -------------------------------- -------------------------------
- -------------------------------- -------------------------------
Social Security or other
Taxpayer Identification
Number, if any -------------------------------
B-12
ELECTION TO SETTLE EARLY
The undersigned Holder of this Growth PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Growth PRIDES evidenced by this Growth
PRIDES Certificate specified below. The option to effect Early Settlement may
be exercised only with respect to Purchase Contracts underlying Growth PRIDES
with an aggregate Stated Amount equal to $1,000 or an integral multiple
thereof. The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon such Early Settlement be registered in the name of, and
delivered, together with a check in payment for any fractional share and any
Growth PRIDES Certificate representing any Growth PRIDES evidenced hereby as
to which Early Settlement of the related Purchase Contracts is not effected, to
the undersigned at the address indicated below unless a different name and
address have been indicated below. Pledged Treasury Securities deliverable upon
such Early Settlement will be transferred in accordance with the transfer
instructions set forth below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Dated:
------------------------ ------------------------------
Signature
Signature Guarantee:
-------------------------
B-13
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
Dated:
------------------------------- -----------------------------
Signature
Signature Guarantee:
If shares of Common Stock of Growth
PRIDES Certificates are to be REGISTERED HOLDER
registered in the name of and delivered
to and Pledged Treasury Securities are to
be transferred to a Person other than the
Holder, please print such Person's name
and address:
Please print name and address of
Registered Holder:
- -------------------------------- -------------------------------
Name Name
- -------------------------------- -------------------------------
Address Address
- -------------------------------- -------------------------------
- -------------------------------- -------------------------------
- -------------------------------- -------------------------------
Social Security or other
Taxpayer Identification
Number, if any -------------------------------
Transfer Instructions for Pledged Treasury Securities Transferable Upon Early
Settlement or a Termination Event:
- -------------------------------------------
- -------------------------------------------
- -------------------------------------------
B-14
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global
Certificate have been made:
Principal Amount of
Amount of Amount of this Global Certificate
decrease in Principal increase in Principal following such decrease Signature of authorized
Amount of the Global Amount of the Global or officer of Trustee or
Date Certificate Certificate increase Securities Custodian
- --------------- ---------------------- --------------------- ------------------------ ------------------------
- --------------- ---------------------- --------------------- ------------------------ ------------------------
- --------------- ---------------------- --------------------- ------------------------ ------------------------
- --------------- ---------------------- --------------------- ------------------------ ------------------------
- --------------- ---------------------- --------------------- ------------------------ ------------------------
- --------------- ---------------------- --------------------- ------------------------ ------------------------
- --------------- ---------------------- --------------------- ------------------------ ------------------------
- --------------- ---------------------- --------------------- ------------------------ ------------------------
- --------------- ---------------------- --------------------- ------------------------ ------------------------
- --------------- ---------------------- --------------------- ------------------------ ------------------------
- --------------- ---------------------- --------------------- ------------------------ ------------------------
- --------------- ---------------------- --------------------- ------------------------ ------------------------
- --------------- ---------------------- --------------------- ------------------------ ------------------------
- --------------- ---------------------- --------------------- ------------------------ ------------------------
- --------------- ---------------------- --------------------- ------------------------ ------------------------
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- --------------- ---------------------- --------------------- ------------------------ ------------------------
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- --------------- ---------------------- --------------------- ------------------------ ------------------------
B-15
EXHIBIT C
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO
COLLATERAL AGENT
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10010-2697
Attention: Corporate Trust Administration Department
Re: FELINE PRIDES of Cendant Corporation (the "Company"),
and Cendant Capital I
We hereby notify you in accordance with Section 4.1 of the
Pledge Agreement, dated as of March 2, 1998, among the Company, yourselves, as
Collateral Agent, and ourselves, as Purchase Contract Agent and as
attorney-in-fact for the holders of [Income PRIDES] [Growth PRIDES] from time
to time, that the holder of securities listed below (the "Holder") has elected
to substitute [$_____ aggregate [principal amount] of Treasury Securities]
[$_______ Stated Amount of Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,] in exchange
for the [Pledged Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,] [Pledged Treasury
Securities] held by you in accordance with the Pledge Agreement and has
delivered to us a notice stating that the Holder has Transferred [Treasury
Securities] [Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,] to you, as Collateral
Agent. We hereby instruct you, upon receipt of such [Pledged Treasury
Securities] [Pledged Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be], and upon the
payment by such Holder of any applicable fees, to release the [Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] [Treasury Securities] related to such [Income
PRIDES] [Growth PRIDES] to us in accordance with the Holder's instructions.
Date:
------------------------- ---------------------------
By:
----------------------
Name:
Title:
Signature Guarantee:
------
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,] for the
[Pledged Preferred Securities or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be,] [Pledged Treasury Securities]:
- ----------------------------------------- -----------------------------
Name Social Security or other Taxpayer
Identification Number, if any
- -----------------------------------------
Address
- -----------------------------------------
- -----------------------------------------
C-2
EXHIBIT D
INSTRUCTION TO PURCHASE CONTRACT AGENT
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust Services Division
Re: FELINE PRIDES of Cendant Corporation (the "Company"), and
Cendant Capital I
The undersigned Holder hereby notifies you that it has
delivered to The Chase Manhattan Bank, as Collateral Agent, $_______ aggregate
principal amount of [Treasury Securities] [Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be,] in exchange for the [Pledged Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be,] [Pledged Treasury Securities] held by the Collateral Agent, in
accordance with Section 4.1 of the Pledge Agreement, dated March 2, 1998,
between you, the Company and the Collateral Agent. The undersigned Holder has
paid the Collateral Agent all applicable fees relating to such exchange. The
undersigned Holder hereby instructs you to instruct the Collateral Agent to
release to you on behalf of the undersigned Holder the [Pledged Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] [Pledged Treasury Securities] related to such
[Income PRIDES] [Growth PRIDES].
Date:
------------------------- ---------------------------
Signature
Signature Guarantee:
----------------
Please print name and address of Registered Holder:
- ----------------------------------- ----------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
- ------------------------------------
- ------------------------------------
- ------------------------------------
EXHIBIT E
NOTICE TO SETTLE BY SEPARATE CASH
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust Services Division
Re: FELINE PRIDES of Cendant Corporation (the "Company"), and
Cendant Capital I
The undersigned Holder hereby irrevocably notifies you in
accordance with Section 5.4 of the Purchase Contract Agreement, dated as of
March 2, 1998 among the Company, yourselves, as Purchase Contract Agent and as
Attorney-in-Fact for the Holders of the Purchase Contracts, that such Holder
has elected to pay to the Collateral Agent, on or prior to 11:00 a.m. New York
City time, on the Business Day immediately preceding the Purchase Contract
Settlement Date, (in lawful money of the United States by [certified or
cashiers check or] wire transfer, in each case in immediately available funds),
$_________ as the Purchase Price for the shares of Common Stock issuable to
such Holder by the Company under the related Purchase Contract on the Purchase
Contract Settlement Date. The undersigned Holder hereby instructs you to notify
promptly the Collateral Agent of the undersigned Holders election to make such
cash settlement with respect to the Purchase Contracts related to such Holder's
[Income PRIDES] [Growth PRIDES].
Date:
------------------------- ---------------------------
Signature
Signature Guarantee:
-----------------
Please print name and address of Registered Holder:
- ----------------------------------- ----------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
- ------------------------------------
- ------------------------------------
- ------------------------------------
E-1
------------------------------------------
CENDANT CORPORATION
TO
THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK,
Trustee
------------------------------------------
Indenture
Dated as of February 24, 1998
-----------------------
CONVERTIBLE AND NON-CONVERTIBLE
SENIOR DEBT SECURITIES
------------------------------------------
CENDANT CORPORATION
Reconciliation and tie between Trust Indenture Act
of 1939 and Indenture, dated as of January , 1998
Trust Indenture Indenture
Act Section
ss. 310(a)(1) .................................... 607(a)
(a)(2) ...................................... 607(a)
(b) ...................................... 608
ss. 312(c) .................................... 701
ss. 314(a) .................................... 703
(a)(4) ...................................... 1004
(c)(1) ...................................... 102
(c)(2) ...................................... 102
(e) ...................................... 102
ss. 315(b) .................................... 601
ss. 316(a)(last
sentence) ...................................... 101 ("Outstanding")
(a)(1)(A) ...................................... 502, 512
(a)(1)(B) ...................................... 513
(b) ...................................... 508
(c) ...................................... 104(e)
ss. 317(a)(1) .................................... 503
(a)(2) ...................................... 504
(b) ...................................... 1003
ss. 318(a) .................................... 111
- --------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
1
Table of Contents(1)
Page
----
PARTIES ................................................................... 1
RECITALS OF THE COMPANY..................................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions................................................... 1
Act.................................................................... 2
Additional Amounts..................................................... 2
Affiliate.............................................................. 2
Authenticating Agent................................................... 2
Authorized Newspaper................................................... 2
Bearer Security........................................................ 2
Beneficial Owner....................................................... 2
Board of Directors..................................................... 3
Board Resolution....................................................... 3
Business Day........................................................... 3
Capital Stock.......................................................... 3
CEDEL S.A.............................................................. 4
Commission............................................................. 4
Common Depositary...................................................... 4
Company................................................................ 4
Company Request or Company Order....................................... 4
Corporate Trust Office................................................. 4
corporation............................................................ 4
coupon................................................................. 4
Currency............................................................... 4
Currency Conversion Date............................................... 4
Currency Conversion Event.............................................. 4
Debt................................................................... 5
Default................................................................ 5
Defaulted Interest..................................................... 5
Dollar or $............................................................ 5
Dollar Equivalent of the Currency Unit................................. 5
Dollar Equivalent of the Foreign Currency.............................. 5
ECU.................................................................... 5
Election Date.......................................................... 5
Euroclear.............................................................. 5
European Communities................................................... 5
European Monetary System............................................... 5
Event of Default....................................................... 5
Exchange Date.......................................................... 5
Exchange Rate Agent.................................................... 5
Exchange Rate Officer's Certificate.................................... 5
i
Federal Bankruptcy Code................................................ 6
Foreign Currency....................................................... 6
Government Obligations................................................. 6
Holder................................................................. 6
Indenture.............................................................. 6
Indexed Security....................................................... 7
interest............................................................... 7
Interest Payment Date.................................................. 7
Issue Date............................................................. 7
Lien................................................................... 7
Market Exchange Rate................................................... 7
Maturity................................................................ 8
Officers' Certificate................................................... 8
Opinion of Counsel...................................................... 8
Optional Reset Date..................................................... 8
Original Issue Discount Security........................................ 8
Outstanding............................................................. 8
Paying Agent............................................................ 9
Person.................................................................. 9
Place of Payment........................................................ 9
Predecessor Security.................................................... 9
Principal Property..................................................... 10
Redemption Date........................................................ 10
Redemption Price....................................................... 10
Registered Security.................................................... 10
Regular Record Date.................................................... 10
Repayment Date......................................................... 10
Repayment Price.........................................................10
Responsible Officer.................................................... 10
Securities............................................................. 11
Security Register...................................................... 11
Special Record Date.................................................... 11
Stated Maturity........................................................ 11
Subordinated Indenture................................................. 11
Subsidiary............................................................. 11
Total Assets........................................................... 11
Trust Indenture Act.................................................... 11
Trustee................................................................ 11
United States.......................................................... 12
United States person................................................... 12
Valuation Date......................................................... 12
Vice President......................................................... 12
Voting Stock........................................................... 12
Yield to Maturity...................................................... 12
SECTION 102. Compliance Certificates and Opinions......................... 12
SECTION 103. Form of Documents Delivered to Trustee....................... 13
SECTION 104. Acts of Holders.............................................. 13
SECTION 105. Notices, etc. to Trustee and Company......................... 15
SECTION 106. Notice to Holders; Waiver.................................... 15
SECTION 107. Effect of Headings and Table of Contents..................... 17
ii
SECTION 108. Successors and Assigns....................................... 17
SECTION 109. Separability Clause.......................................... 17
SECTION 110. Benefits of Indenture........................................ 17
SECTION 111. Governing Law................................................ 17
SECTION 112. Legal Holidays............................................... 17
SECTION 113. Trust Indenture Act.......................................... 18
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.............................................. 18
SECTION 202. Form of Trustee's Certificate of Authentication.............. 19
SECTION 203. Securities Issuable in Global Form........................... 19
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series......................... 20
SECTION 302. Denominations................................................ 24
SECTION 303. Execution, Authentication, Delivery and Dating............... 24
SECTION 304. Temporary Securities......................................... 27
SECTION 305. Registration, Registration of Transfer and Exchange.......... 29
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities............. 32
SECTION 307. Payment of Interest; Interest Rights Preserved;
Optional Interest Reset.................................... 33
SECTION 308. Optional Extension of Stated Maturity........................ 36
SECTION 309. Persons Deemed Owners........................................ 36
SECTION 310. Cancellation................................................. 37
SECTION 311. Computation of Interest...................................... 38
SECTION 312. Currency and Manner of Payments in Respect of Securities..... 38
SECTION 313. Appointment and Resignation of Successor Exchange Rate Agent. 41
SECTION 314. Designation as Senior Indebtedness........................... 42
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture...................... 42
SECTION 402. Application of Trust Money................................... 44
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default............................................ 44
iii
SECTION 502. Acceleration of Maturity; Rescission and Annulment........... 45
SECTION 503. Collection of Indebtedness and Suits for Enforcement
by Trustee................................................. 47
SECTION 504. Trustee May File Proofs of Claim............................. 48
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.. 48
SECTION 506. Application of Money Collected............................... 49
SECTION 507. Limitation on Suits.......................................... 49
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest....................................... 50
SECTION 509. Restoration of Rights and Remedies........................... 50
SECTION 510. Rights and Remedies Cumulative............................... 50
SECTION 511. Delay or Omission Not Waiver................................. 51
SECTION 512. Control by Holders........................................... 51
SECTION 513. Waiver of Past Defaults...................................... 51
SECTION 514. Waiver of Stay or Extension Laws............................. 52
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults........................................... 52
SECTION 602. Certain Rights of Trustee.................................... 53
SECTION 603. Trustee Not Responsible for Recitals or Issuance of
Securities................................................. 54
SECTION 604. May Hold Securities.......................................... 54
SECTION 605. Money Held in Trust.......................................... 55
SECTION 606. Compensation and Reimbursement............................... 55
SECTION 607. Corporate Trustee Required; Eligibility...................... 55
SECTION 608. Resignation and Removal; Appointment of Successor............ 56
SECTION 609. Acceptance of Appointment by Successor....................... 57
SECTION 610. Merger, Conversion, Consolidation or Succession to Business.. 58
SECTION 611. Appointment of Authenticating Agent.......................... 59
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders................. 61
SECTION 702. Reports by Trustee........................................... 61
SECTION 703. Reports by Company........................................... 61
ARTICLE EIGHT
MERGER, CONSOLIDATION AND SALE OF ASSETS
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms......... 62
SECTION 802. Successor Person Substituted................................. 62
SECTION 803. Securities to Be Secured in Certain Events................... 62
iv
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders........... 63
SECTION 902. Supplemental Indentures with Consent of Holders.............. 65
SECTION 903. Execution of Supplemental Indentures......................... 66
SECTION 904. Effect of Supplemental Indentures............................ 66
SECTION 905. Conformity with Trust Indenture Act.......................... 66
SECTION 906. Reference in Securities to Supplemental Indentures........... 66
SECTION 907. Notice of Supplemental Indentures............................ 67
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, and Interest.......... 67
SECTION 1002. Maintenance of Office or Agency.............................. 67
SECTION 1003. Money for Securities Payments to Be Held in Trust............ 69
SECTION 1004. Statement as to Compliance................................... 70
SECTION 1005. Additional Amounts........................................... 71
SECTION 1006. Payment of Taxes and Other Claims............................ 71
SECTION 1007. Corporate Existence.......................................... 72
SECTION 1008. Waiver of Certain Covenants.................................. 72
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article..................................... 72
SECTION 1102. Election to Redeem; Notice to Trustee........................ 72
SECTION 1103. Selection by Trustee of Securities to Be Redeemed............ 73
SECTION 1104. Notice of Redemption......................................... 73
SECTION 1105. Deposit of Redemption Price.................................. 74
SECTION 1106. Securities Payable on Redemption Date........................ 74
SECTION 1107. Securities Redeemed in Part.................................. 75
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article..................................... 76
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities........ 76
SECTION 1203. Redemption of Securities for Sinking Fund.................... 77
v
ARTICLE THIRTEEN
REPAYMENT AT OPTION OF HOLDERS
SECTION 1301. Applicability of Article..................................... 78
SECTION 1302. Repayment of Securities...................................... 78
SECTION 1303. Exercise of Option........................................... 78
SECTION 1304. When Securities Presented for Repayment Become Due
and Payable................................................ 79
SECTION 1305. Securities Repaid in Part.................................... 80
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Company's Option to Effect Defeasance or Covenant
Defeasance................................................. 80
SECTION 1402. Defeasance and Discharge..................................... 80
SECTION 1403. Covenant Defeasance.......................................... 81
SECTION 1404. Conditions to Defeasance or Covenant Defeasance.............. 81
SECTION 1405. Deposited Money and Government Obligations to Be Held
in Trust; Other Miscellaneous Provision.................... 83
SECTION 1406. Reinstatement................................................ 84
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called.................... 84
SECTION 1502. Call, Notice and Place of Meetings........................... 84
SECTION 1503. Persons Entitled to Vote at Meetings......................... 85
SECTION 1504. Quorum; Action............................................... 85
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment
of Meetings................................................ 86
SECTION 1506. Counting Votes and Recording Action of Meetings.............. 88
TESTIMONIUM
SIGNATURES AND SEALS
EXHIBIT A FORMS OF CERTIFICATION
EXHIBIT A-1 FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED TO RECEIVE
BEARER SECURITY OR TO OBTAIN INTEREST PAYABLE PRIOR TO THE
EXCHANGE DATE
EXHIBIT A-2 FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR AND CEDEL S.A. IN
CONNECTION WITH THE EXCHANGE OF A PORTION OF A TEMPORARY GLOBAL
SECURITY OR TO OBTAIN INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE
(1) Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
vi
PARTIES
INDENTURE, dated as of February 24, 1998, between CENDANT CORPORATION,
a corporation duly organized and existing under the laws of the State of
Delaware (herein called the "Company"), having its principal office at 6 Sylvan
Way, Parsippany, New Jersey 07054, and THE BANK OF NOVA SCOTIA TRUST COMPANY OF
NEW YORK, a New York banking corporation duly organized and existing under the
laws of the State of New York, as Trustee (herein called the "Trustee") having
its principal office at One Liberty Plaza, 23rd Floor, New York, New York
10006.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), which may or may not be convertible into or exchangeable for any
securities of any Person (including the Company), to be issued in one or more
series as provided in this Indenture.
This Indenture is subject to the provisions of the Trust Indenture Act
of 1939, as amended, that are required to be part of this Indenture and shall,
to the extent applicable, be governed by such provisions.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities or of any
series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein, and the terms "cash transaction" and
"self-liquidating paper", as used in TIA Section 311, shall have the
meanings assigned to them in the rules of the Commission adopted under the
Trust Indenture Act;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to
1
them in accordance with generally accepted accounting principles, and,
except as otherwise herein expressly provided, the term "generally accepted
accounting principles" with respect to any computation required or
permitted hereunder shall mean such accounting principles as are generally
accepted at the date of such computation; and
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Three, are defined in that
Article.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Additional Amounts" has the meaning specified in Section 1005.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee to
act on behalf of the Trustee to authenticate Securities.
"Authorized Newspaper" means a newspaper, in the English language or
in an official language of the country of publication, customarily published on
each Business Day, whether or not published on Saturdays, Sundays or holidays,
and of general circulation in each place in connection with which the term is
used or in the financial community of each such place. Where successive
publications are required to be made in Authorized Newspapers, the successive
publications may be made in the same or in different newspapers in the same
city meeting the foregoing requirements and in each case on any Business Day.
"Bearer Security" means any Security except a Registered Security.
"Beneficial Owner" of shares of Capital Stock means, with respect to
any Person, any such shares:
(a) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the sole or shared right to vote or
dispose of or has "beneficial ownership" of (as determined pursuant to Rule
13d-3 promulgated under the Exchange Act or pursuant to any successor
provision), including, but not limited to, pursuant to any agreement,
arrangement or understanding, whether or not in writing; provided, that a
Person shall not be deemed the "Beneficial Owner" of, or to "Beneficially
Own", any security under this subparagraph as a result of an agreement,
arrangement or understanding to vote such security that both (y) arises
solely from a revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the rules and regulations promulgated under the
Exchange Act and (z) is not reportable by such person on Schedule 13D
promulgated under the Exchange Act (or any comparable or successor report)
without giving effect to any applicable waiting period, or Exchange Act (or
any comparable or successor report) without giving
2
effect to any applicable waiting period; or
(b) which are Beneficially Owned, directly or indirectly, by any other
person (or any Affiliate or Associate thereof) with which such person (or
any of such person's Affiliates or Associates) has any agreement,
arrangement or understanding, whether or not in writing, for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy as
described in the proviso to subparagraph (a) above) or disposing of any
Capital Stock;
provided, that (i) no director or officer of the Corporation (nor any
Affiliate or Associate of any such director or officer) shall, solely by
reason of any or all of such directors or officers acting in their
capacities as such, be deemed the "Beneficial Owner" of or to "Beneficially
Own" any shares of Capital Stock that are Beneficially Owned by any other
such director or officer, and (ii) no person shall be deemed the
"Beneficial Owner" of or to "Beneficially Own" any shares of Capital Stock
held in any voting trust, any employee stock ownership plan or any similar
plan or trust if such person does not possess the right to vote, to direct
the voting of or to be consulted with respect to the voting of such shares.
For the purposes of this definition, the terms "Affiliate" and
"Associate" shall have the respective meanings ascribed to such terms in
Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as
amended as in effect on June 14, 1996 (the term "registrant" in said Rule
12b-2 meaning in this case the Company).
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors (or a committee of the Board of Directors empowered to
exercise all of the powers of the Board of Directors) and to be in full force
and effect on the date of such certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York
or in the city in which the Corporate Trust Office is located are authorized or
obligated by law or executive order to close.
"Capital Stock" means any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock of the
Company or any Subsidiary.
"CEDEL S.A." means Cedel, S.A., or its successor.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934,
or, if at any time after the execution of this Indenture such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Depositary" has the meaning specified in Section 304.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
3
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman, its President, any Vice
President, its Treasurer or an Assistant Treasurer, and delivered to the
Trustee.
"Corporate Trust Office" means the principal corporate trust office of
the Trustee, at which at any particular time its corporate trust business shall
be administered, which office on the date of execution of this Indenture is
located at One Liberty Plaza, N.Y., N.Y., except that with respect to
presentation of Securities for payment or for registration of transfer or
exchange, such term shall mean the office or agency of the Trustee at which, at
any particular time, its corporate agency business shall be conducted.
"corporation" includes corporations, associations, companies and
business trusts.
"coupon" means any interest coupon appertaining to a Bearer Security.
"Currency" means any currency or currencies, composite currency or
currency unit or currency units, including, without limitation, the ECU, issued
by the government of one or more countries or by any recognized confederation
or association of such governments.
"Currency Conversion Date" has the meaning specified in Section
312(d).
"Currency Conversion Event" means the cessation of use of (i) a
Foreign Currency both by the government of the country which issued such
Currency and by a central bank or other public institution of or within the
international banking community for the settlement of transactions, (ii) the
ECU both within the European Monetary System and for the settlement of
transactions by public institutions of or within the European Communities or
(iii) any currency unit (or composite currency) other than the ECU for the
purposes for which it was established.
"Debt" means notes, bonds, debentures or other similar evidences of
indebtedness for money borrowed.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 307.
"Dollar" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States of America as at the time shall be legal
tender for the payment of public and private debts.
"Dollar Equivalent of the Currency Unit" has the meaning specified in
Section 312(g).
"Dollar Equivalent of the Foreign Currency" has the meaning specified
in Section 312(f).
"ECU" means the European Currency Unit as defined and revised from
time to time by the Council of the European Communities.
"Election Date" has the meaning specified in Section 312(h).
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
Office, or its
4
successor as operator of the Euroclear System.
"European Communities" means the European Economic Community, the
European Coal and Steel Community and the European Atomic Energy Community.
"European Monetary System" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of the
European Communities.
"Event of Default" has the meaning specified in Section 501.
"Exchange Date" has the meaning specified in Section 304.
"Exchange Rate Agent" means, with respect to Securities of or within
any series, unless otherwise specified with respect to any Securities pursuant
to Section 301, a New York Clearing House bank, designated pursuant to Section
301 or Section 313.
"Exchange Rate Officer's Certificate" means a tested telex or a
certificate setting forth (i) the applicable Market Exchange Rate and (ii) the
Dollar or Foreign Currency amounts of principal (and premium, if any) and
interest, if any (on an aggregate basis and on the basis of a Security having
the lowest denomination principal amount determined in accordance with Section
302 in the relevant Currency), payable with respect to a Security of any series
on the basis of such Market Exchange Rate, sent (in the case of a telex) or
signed (in the case of a certificate) by the Treasurer, any Vice President or
any Assistant Treasurer of the Company.
"Federal Bankruptcy Code" means the Bankruptcy Act of Title 11 of the
United States Code, as amended from time to time.
"Foreign Currency" means any Currency other than Currency of the
United States.
"Government Obligations" means, unless otherwise specified with
respect to any series of Securities pursuant to Section 301, securities which
are (i) direct obligations of the government which issued the Currency in which
the Securities of a particular series are payable or (ii) obligations of a
Person controlled or supervised by and acting as an agency or instrumentality
of the government which issued the Currency in which the Securities of such
series are payable, the payment of which is unconditionally guaranteed by such
government, which, in either case, are full faith and credit obligations of
such government payable in such Currency and are not callable or redeemable at
the option of the issuer thereof and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such
Government Obligation or a specific payment of interest on or principal of any
such Government Obligation held by such custodian for the account of the holder
of a depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depository receipt from any amount received by the custodian
in respect of the Government Obligation or the specific payment of interest or
principal of the Government Obligation evidenced by such depository receipt.
"Holder" means, in the case of a Registered Security, the Person in
whose name a Security is registered in the Security Register and, in the case
of a Bearer Security, the bearer thereof and, when used with respect to any
coupon, shall mean the bearer thereof.
"Indenture" means this instrument as originally executed and as it may
from time to time
5
be supplemented or amended by one or more indentures supplemental hereto
entered into pursuant to the applicable provisions hereof, and shall include
the terms of any particular series of Securities established as contemplated by
Section 301; provided, however, that, if at any time more than one Person is
acting as Trustee under this instrument, "Indenture" shall mean, with respect
to any one or more series of Securities for which such Person is Trustee, this
instrument as originally executed or as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof and shall include the terms
of particular series of Securities for which such Person is Trustee established
as contemplated by Section 301, exclusive, however, of any provisions or terms
which relate solely to other series of Securities for which such Person is not
Trustee, regardless of when such terms or provisions were adopted, and
exclusive of any provisions or terms adopted by means of one or more indentures
supplemental hereto executed and delivered after such Person had become such
Trustee but to which such Person, as such Trustee, was not a party.
"Indexed Security" means a Security the terms of which provide that
the principal amount thereof payable at Stated Maturity may be more or less
than the principal face amount thereof at original issuance.
"interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity at the rate prescribed in such Original Issue Discount
Security.
"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Issue Date" with respect to a Security means the date of first
issuance of such Security under this Indenture.
"Lien" means any pledge, mortgage, lien, charge, encumbrance or
security interest except that a Lien shall not mean any license or right to use
intellectual property of the Company or a Subsidiary granted by the Company or
a Subsidiary.
"Market Exchange Rate" means, unless otherwise specified with respect
to any Securities pursuant to Section 301, (i) for any conversion involving a
currency unit on the one hand and Dollars or any Foreign Currency on the other,
the exchange rate between the relevant currency unit and Dollars or such
Foreign Currency calculated by the method specified pursuant to Section 301 for
the Securities of the relevant series, (ii) for any conversion of Dollars into
any Foreign Currency, the noon (New York City time) buying rate for such
Foreign Currency for cable transfers quoted in New York City as certified for
customs purposes by the Federal Reserve Bank of New York and (iii) for any
conversion of one Foreign Currency into Dollars or another Foreign Currency,
the spot rate at noon local time in the relevant market at which, in accordance
with normal banking procedures, the Dollars or Foreign Currency into which
conversion is being made could be purchased with the Foreign Currency from
which conversion is being made from major banks located in either New York
City, London or any other principal market for Dollars or such purchased
Foreign Currency, in each case determined by the Exchange Rate Agent. Unless
otherwise specified with respect to any Securities pursuant to Section 301, in
the event of the unavailability of any of the exchange rates provided for in
the foregoing clauses (i), (ii) and (iii), the Exchange Rate Agent shall use,
in its sole discretion and without liability on its part, such quotation of the
Federal Reserve Bank of New York as of the most recent available date, or
quotations from one or more major banks in New York City, London or another
principal market for the Currency in question, or such other quotations as the
Exchange Rate Agent shall deem appropriate. Unless otherwise specified by the
6
Exchange Rate Agent, if there is more than one market for dealing in any
Currency by reason of foreign exchange regulations or otherwise, the market to
be used in respect of such Currency shall be that upon which a non-resident
issuer of securities designated in such Currency would purchase such Currency
in order to make payments in respect of such securities.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, notice of option to elect
repayment or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman,
the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, including an employee of the Company, and who shall be
acceptable to the Trustee.
"Optional Reset Date" has the meaning specified in Section 307(b).
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or redemption
or repayment at the option of the Holder money in the necessary amount has
been theretofore deposited with the Trustee or any Paying Agent (other than
the Company) in trust or set aside and segregated in trust by the Company
(if the Company shall act as its own Paying Agent) for the Holders of such
Securities and any coupons appertaining thereto; provided that, if such
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made;
(iii) Securities, except to the extent provided in Sections 1402 and
1403, with respect to which the Company has effected defeasance and/or
covenant defeasance as provided in Article Fourteen; and
(iv) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver
7
hereunder or are present at a meeting of Holders for quorum purposes, and for
the purpose of making the calculations required by TIA Section 313, (i) the
principal amount of an Original Issue Discount Security that may be counted in
making such determination or calculation and that shall be deemed to be
Outstanding for such purpose shall be equal to the amount of principal thereof
that would be (or shall have been declared to be) due and payable, at the time
of such determination, upon a declaration of acceleration of the maturity
thereof pursuant to Section 502, (ii) the principal amount of any Security
denominated in a Foreign Currency that may be counted in making such
determination or calculation and that shall be deemed Outstanding for such
purpose shall be equal to the Dollar equivalent, determined as of the date such
Security is originally issued by the Company as set forth in an Exchange Rate
Officer's Certificate delivered to the Trustee, of the principal amount (or, in
the case of an Original Issue Discount Security, the Dollar equivalent as of
such date of original issuance of the amount determined as provided in clause
(i) above), of such Security, (iii) the principal amount of any Indexed
Security that may be counted in making such determination or calculation and
that shall be deemed outstanding for such purpose shall be equal to the
principal face amount of such Indexed Security at original issuance, unless
otherwise provided with respect to such Security pursuant to Section 301, and
(iv) Securities owned by the Company or any other obligor upon the Securities
or any Affiliate of the Company or of such other obligor shall be disregarded
and deemed not to be Outstanding, except that, in determining whether the
Trustee shall be protected in making such calculation or in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or such other obligor.
"Paying Agent" means any Person (including the Company acting as
Paying Agent) authorized by the Company to pay the principal of (or premium, if
any, on) or interest on any Securities on behalf of the Company.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"Place of Payment" means, when used with respect to the Securities of
or within any series, the place or places where the principal of (and premium,
if any, on) and interest on such Securities are payable as specified as
contemplated by Sections 301 and 1002.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupons
appertains, as the case may be.
"Principal Property" means any reservation centers, leaseholds,
telecommunications contracts, computerized systems contracts, intellectual
property rights, or Franchise Contracts, owned by the Company or any Subsidiary
and located in the United States, the gross book value (without deduction of
any reserve for depreciation) of which on the date as of which the
determination is being made is an amount which exceeds 5% of Total Assets,
other than any such property which, in the opinion of the
8
Board of Directors, is not of material importance to the total business
conducted by the Company and its Subsidiaries, taken as a whole.
"Redemption Date", when used with respect to any Security to be
redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Security" means any Security registered in the Security
Register.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Registered Securities of or within any series means the date
specified for that purpose as contemplated by Section 301.
"Repayment Date" means, when used with respect to any Security to be
repaid at the option of the Holder, the date fixed for such repayment pursuant
to this Indenture.
"Repayment Price" means, when used with respect to any Security to be
repaid at the option of the Holder, the price at which it is to be repaid
pursuant to this Indenture.
"Responsible Officer", when used with respect to the Trustee, means
the chairman or any vice-chairman of the board of directors, the chairman or
any vice-chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer, the
cashier, any assistant cashier, any trust officer or assistant trust officer,
the controller or any assistant controller or any other officer of the 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 his knowledge of and familiarity with the particular subject.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and
delivered under this Indenture; provided, however, that if at any time there is
more than one Person acting as Trustee under this Indenture, "Securities" with
respect to the Indenture as to which such Person is Trustee shall have the
meaning stated in the first recital of this Indenture and shall more
particularly mean Securities authenticated and delivered under this Indenture,
exclusive, however, of Securities of any series as to which such Person is not
Trustee.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of or within any series means a date fixed by the Trustee
pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable, as such date may be extended pursuant
to the provisions of Section 308.
9
"Subordinated Indenture" means the indenture to be entered into
between the Company and The Bank of Nova Scotia Trust Company of New York in
connection with the January 1998 shelf registration of the Company.
"Subsidiary" means any corporation of which at the time of
determination the Company, directly and/or indirectly through one or more
Subsidiaries, owns more than 50% of the shares of Voting Stock.
"Total Assets" means the total amount of assets (less applicable
reserves and other properly deductible items), as set forth on the most recent
balance sheet of the Company and its consolidated Subsidiaries and computed in
accordance with generally accepted accounting principles.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939
as in force at the date as of which this Indenture was executed, except as
provided in Section 905.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder;
provided, however, that if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any series shall mean only
the Trustee with respect to Securities of that series.
"United States" means, unless otherwise specified with respect to any
Securities pursuant to Section 301, the United States of America (including the
states and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction.
"United States person" means, unless otherwise specified with respect
to any Securities pursuant to Section 301, an individual who is a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source.
"Valuation Date" has the meaning specified in Section 312(c).
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
"Voting Stock" means stock of the class or classes having general
voting power under ordinary circumstances to elect at least a majority of the
board of directors, managers or trustees of a corporation (irrespective of
whether or not at the time stock of any other class or classes shall have or
might have voting power by reason of the happening of any contingency).
"Yield to Maturity" means the yield to maturity, computed at the time
of issuance of a Security (or, if applicable, at the most recent
redetermination of interest on such Security) and as set forth in such Security
in accordance with generally accepted United States bond yield computation
principles.
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Section 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture (including any covenant compliance with
which constitutes a condition precedent) relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent, if any, have been complied with,
except that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or request, including,
without limitation, the certificate of authentication provided pursuant to
Section 303, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
covenant or condition provided for in this Indenture (other than pursuant to
Section 1004) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such covenant or condition has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests,
11
consents, certificates, statements, opinions or other instruments under this
Indenture, they may, but need not, be consolidated and form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders of the Outstanding Securities of all series or one or more series,
as the case may be, may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person
or by agents duly appointed in writing. If Securities of a series are
issuable as Bearer Securities, any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this
Indenture to be given or taken by Holders of such series may,
alternatively, be embodied in and evidenced by the record of Holders of
Securities of such series voting in favor thereof, either in person or by
proxies duly appointed in writing, at any meeting of Holders of Securities
of such series duly called and held in accordance with the provisions of
Article Fifteen, or a combination of such instruments and any such record.
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments or record or both are
delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments and any such record (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the Holders signing such instrument or instruments or so
voting at any such meeting. Proof of execution of any such instrument or of
a writing appointing any such agent, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section. The record of any meeting of Holders of
Securities shall be proved in the manner provided in Section 1506.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer acting in a capacity
other than his individual capacity, such certificate or affidavit shall
also constitute sufficient proof of authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which the
Trustee deems sufficient.
(c) The principal amount and serial numbers of Registered Securities
held by any Person, and the date of holding the same, shall be proved by
the Security Register.
(d) The principal amount and serial numbers of Bearer Securities held
by any Person, and the date of holding the same, may be proved by the
production of such Bearer Securities or by a certificate executed, as
depositary, by any trust company, bank, banker or other depositary,
wherever situated, if such certificate shall be deemed by the Trustee to be
satisfactory, showing that at the date therein mentioned such Person had on
deposit with such depositary, or exhibited to it, the Bearer Securities
therein described; or such facts may be proved by the certificate or
affidavit of the Person holding such Bearer Securities, if such certificate
or affidavit is deemed by the Trustee to be satisfactory. The Trustee and
the Company may assume that such ownership of any Bearer Security continues
until (1) another certificate or affidavit bearing a later date issued in
respect of the same Bearer Security is produced, or (2) such Bearer
Security is produced to the Trustee by some other Person, or (3) such
Bearer Security is surrendered in exchange for a
12
Registered Security, or (4) such Bearer Security is no longer Outstanding.
The principal amount and serial numbers of Bearer Securities held by any
Person, and the date of holding the same, may also be proved in any other
manner which the Trustee deems sufficient.
(e) If the Company shall solicit from the Holders of Registered
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, by or pursuant to
Board Resolution, fix in advance a record date for the determination of
Holders entitled to give such request, demand, authorization, direction,
notice, consent, waiver or other Act, but the Company shall have no
obligation to do so. Notwithstanding TIA Section 316(c), such record date
shall be the record date specified in or pursuant to such Board Resolution,
which shall be a date not earlier than the date 30 days prior to the first
solicitation of Holders generally in connection therewith and not later
than the date such solicitation is completed. If such a record date is
fixed, such request, demand, authorization, direction, notice, consent,
waiver or other Act may be given before or after such record date, but only
the Holders of record at the close of business on such record date shall be
deemed to be Holders for the purposes of determining whether Holders of the
requisite proportion of Outstanding Securities have authorized or agreed or
consented to such request, demand, authorization, direction, notice,
consent, waiver or other Act, and for that purpose the Outstanding
Securities shall be computed as of such record date; provided that no such
authorization, agreement or consent by the Holders on such record date
shall be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than eleven months after the record
date.
(f) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Security.
SECTION 105. Notices, Etc. to Trustee and Company
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other documents provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this Indenture or at any other address previously
furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice of any event to Holders of
Registered Securities by the Company or the Trustee, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, to each such Holder affected by such
event,
13
at his address as it appears in the Security Register within the time
prescribed for the giving of such notice. In any case where notice to Holders
of Registered Securities is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders of
Registered Securities or the sufficiency of any notice to Holders of Bearer
Securities given as provided. Any notice mailed to a Holder in the manner
herein prescribed shall be conclusively deemed to have been received by such
Holder, whether or not such Holder actually receives such notice.
In case, by reason of the suspension of or irregularities in regular
mail service or by reason of any other cause, it shall be impractical to mail
notice of any event to Holders of Registered Securities when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Trustee shall be
deemed to be sufficient giving of such notice for every purpose hereunder.
Except as otherwise expressly provided herein or otherwise specified
with respect to any Securities pursuant to Section 301, where this Indenture
provides for notice to Holders of Bearer Securities of any event, such notice
shall be sufficiently given to Holders of Bearer Securities if published in an
Authorized Newspaper in The City of New York and in such other city or cities
as may be specified in such Securities on a Business Day at least twice, the
first such publication to be not earlier than the earliest date, and not later
than the latest date, prescribed for the giving of such notice. Any such notice
shall be deemed to have been given on the date of the first such publication.
In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to Holders of Bearer Securities as provided above, nor any defect
in any notice so published, shall affect the sufficiency of such notice with
respect to other Holders of Bearer Securities or the sufficiency of any notice
to Holders of Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of
the country of publication.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken
in reliance upon such waiver.
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SECTION 107. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 108. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 109. Separability Clause.
In case any provision in this Indenture or in any Security or coupon
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 110. Benefits of Indenture.
Nothing in this Indenture or in the Securities or coupons, express or
implied, shall give to any Person, other than the parties hereto, any
Authenticating Agent, any Paying Agent, any Securities Registrar and their
successors hereunder and the Holders of Securities or coupons, any benefit or
any legal or equitable right, remedy or claim under this Indenture.
SECTION 111. Governing Law.
THIS INDENTURE AND THE SECURITIES AND COUPONS SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. THIS INDENTURE
IS SUBJECT TO THE PROVISIONS OF THE TRUST INDENTURE ACT OF 1939, AS AMENDED,
THAT ARE REQUIRED TO BE PART OF THIS INDENTURE AND SHALL, TO THE EXTENT
APPLICABLE, BE GOVERNED BY SUCH PROVISIONS.
SECTION 112. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, sinking
fund payment date or Stated Maturity or Maturity of any Security shall not be a
Business Day at any Place of Payment, then (notwithstanding any other provision
of this Indenture or of any Security or coupon other than a provision in the
Securities of any series which specifically states that such provision shall
apply in lieu of this Section) payment of interest or principal (and premium,
if any) need not be made at such Place of Payment on such date, but may be made
on the next succeeding Business Day at such Place of Payment with the same
force and effect as if made on the Interest Payment Date or Redemption Date or
sinking fund payment date, or at the Stated Maturity or Maturity; provided that
no interest shall accrue for the period from and after such Interest Payment
Date, Redemption Date, sinking fund payment date, Stated Maturity or Maturity,
as the case may be.
15
SECTION 113. Trust Indenture Act.
This Indenture is subject to the provisions of the Trust Indenture Act
that are required to be part of this Indenture and shall, to the extent
applicable, be governed by such provisions.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Registered Securities, if any, of each series and the Bearer
Securities, if any, of each series and related coupons shall be in
substantially the forms as shall be established by or pursuant to a Board
Resolution or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities exchange
or as may, consistently herewith, be determined by the officers executing such
Securities or coupons, as evidenced by their execution of the Securities or
coupons. If the forms of Securities or coupons of any series are established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of
the Company and delivered to the Trustee at or prior to the delivery of the
Company Order contemplated by Section 303 for the authentication and delivery
of such Securities or coupons. Any portion of the text of any Security may be
set forth on the reverse thereof, with an appropriate reference thereto on the
face of the Security.
Unless otherwise specified as contemplated by Section 301, Securities
in bearer form shall have interest coupons attached.
The Trustee's certificate of authentication on all Securities shall be
in substantially the form set forth in this Article.
The definitive Securities and coupons shall be printed, lithographed
or engraved on steel-engraved borders or may be produced in any other manner,
all as determined by the officers of the Company executing such Securities, as
evidenced by their execution of such Securities or coupons.
SECTION 202. Form of Trustee's Certificate of Authentication.
Subject to Section 611, the Trustee's certificate of authentication
shall be in substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE BANK OF NOVA SCOTIA TRUST
COMPANY OF NEW YORK,
as Trustee
16
By
--------------------------------
Authorized Officer
SECTION 203. Securities Issuable in Global Form.
If Securities of or within a series are issuable in global form, as
specified as contemplated by Section 301, then, notwithstanding clause (8) of
Section 301, any such Security shall represent such of the Outstanding
Securities of such series as shall be specified therein and may provide that it
shall represent the aggregate amount of Outstanding Securities of such series
from time to time endorsed thereon and that the aggregate amount of Outstanding
Securities of such series represented thereby may from time to time be
increased or decreased to reflect exchanges. Any endorsement of a Security in
global form to reflect the amount, or any increase or decrease in the amount,
of Outstanding Securities represented thereby shall be made by the Trustee in
such manner and upon instructions given by such Person or Persons as shall be
specified therein or in the Company Order to be delivered to the Trustee
pursuant to Section 303 or Section 304. Subject to the provisions of Section
303 and, if applicable, Section 304, the Trustee shall deliver and redeliver
any Security in permanent global form in the manner and upon instructions given
by the Person or Persons specified therein or in the applicable Company Order.
If a Company Order pursuant to Section 303 or Section 304 has been, or
simultaneously is, delivered, any instructions by the Company with respect to
endorsement or delivery or redelivery of a Security in global form shall be in
writing but need not comply with Section 102 and need not be accompanied by an
Opinion of Counsel.
The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Company and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of Section 303.
Notwithstanding the provisions of Section 307, unless otherwise
specified as contemplated by Section 301, payment of principal of and any
premium and interest on any Security in permanent global form shall be made to
the Person or Persons specified therein.
Notwithstanding the provisions of Section 309 and except as provided
in the preceding paragraph, the Company, the Trustee and any agent of the
Company and the Trustee shall treat as the Holder of such principal amount of
Outstanding Securities represented by a permanent global Security (i) in the
case of a permanent global Security in registered form, the Holder of such
permanent global Security in registered form, or (ii) in the case of a
permanent global Security in bearer form, Euroclear or CEDEL as specified by
the common depositary for such global securities.
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture and the Subordinated Indenture
is unlimited.
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The Securities may be issued in one or more series. There shall be
established in one or more Board Resolutions or pursuant to authority granted
by one or more Board Resolutions and, subject to Section 303, set forth in, or
determined in the manner provided in, an Officers' Certificate, or established
in one or more indentures supplemental hereto, prior to the issuance of
Securities of any series, any or all of the following, as applicable (each of
which (except for the matters set forth in clauses (1), (2) and (17) below), if
so provided, may be determined from time to time by the Company with respect to
unissued Securities of the series and set forth in such Securities of the
series when issued from time to time):
(1) the title of the Securities of the series (which shall distinguish
the Securities of the series from all other series of Securities);
(2) any limit upon the aggregate principal amount of the Securities of
the series that may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 304, 305, 306, 906, 1107 or 1305);
(3) the date or dates, or the method by which such date or dates will
be determined or extended, on which the principal of the Securities of the
series is payable;
(4) the rate or rates at which the Securities of the series shall bear
interest, if any, or the method by which such rate or rates shall be
determined, the date or dates from which such interest shall accrue, or the
method by which such date or dates shall be determined, the Interest
Payment Dates on which such interest shall be payable and the Regular
Record Date, if any, for the interest payable on any Registered Security on
any Interest Payment Date, or the method by which such date or dates shall
be determined, and the basis upon which interest shall be calculated if
other than on the basis of a 360-day year of twelve 30-day months;
(5) the place or places, if any, other than or in addition to the
Borough of Manhattan, The City of New York, where the principal of (and
premium, if any, on) and any interest on Securities of the series shall be
payable, any Registered Securities of the series may be surrendered for
registration of transfer, Securities of the series may be surrendered for
exchange and, if different than the location specified in Section 106, the
place or places where notices or demands to or upon the Company in respect
of the Securities of the series and this Indenture may be served;
(6) the period or periods within which, the price or prices at which,
the Currency in which, and other terms and conditions upon which Securities
of the series may be redeemed, in whole or in part, at the option of the
Company, if the Company is to have that option;
(7) the obligation, if any, of the Company to redeem, repay or
purchase Securities of the series pursuant to any sinking fund or analogous
provision or at the option of a Holder thereof, and the period or periods
within which, the price or prices at which, the Currency in which, and
other terms and conditions upon which Securities of the series shall be
redeemed, repaid or purchased, in whole or in part, pursuant to such
obligation;
(8) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Registered Securities of the series
shall be issuable and, if other than the denomination of $5,000, the
denomination or denominations in which any Bearer Securities of the series
shall be issuable;
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(9) if other than the Trustee, the identity of each Security Registrar
and/or Paying Agent;
(10) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series that shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 502
or the method by which such portion shall be determined;
(11) if other than Dollars, the Currency in which payment of the
principal of (and premium, if any, on) or interest, if any, on the
Securities of the series shall be payable or in which the Securities of the
series shall be denominated and the particular provisions applicable
thereto in accordance with, in addition to or in lieu of any of the
provisions of Section 312;
(12) whether the amount of payments of principal of (and premium, if
any, on) or interest on the Securities of the series may be determined with
reference to an index, formula or other method (which index, formula or
method may be based, without limitation, on one or more Currencies,
commodities, equity indices or other indices), and the manner in which such
amounts shall be determined;
(13) whether the principal of (and premium, if any, on) and interest,
if any, on the Securities of the series are to be payable, at the election
of the Company or a Holder thereof, in a Currency other than that in which
such Securities are denominated or stated to be payable, the period or
periods within which (including the Election Date), and the terms and
conditions upon which, such election may be made, and the time and manner
of determining the exchange rate between the Currency in which such
Securities are denominated or stated to be payable and the Currency in
which such Securities are to be so payable, in each case in accordance
with, in addition to or in lieu of any of the provisions of Section 312;
(14) the designation of the initial Exchange Rate Agent, if any;
(15) any provisions in modification of, in addition to or in lieu of
the provisions of Article Fourteen that shall be applicable to the
Securities of the series;
(16) provisions, if any, granting special rights to the Holders of
Securities of the series upon the occurrence of such events as may be
specified;
(17) any deletions from, modifications of or additions to the Events
of Default or covenants of the Company with respect to Securities of the
series, whether or not such Events of Default or covenants are consistent
with the Events of Default or covenants set forth herein;
(18) whether Securities of the series are to be issuable as Registered
Securities, Bearer Securities (with or without coupons) or both, any
restrictions applicable to the offer, sale or delivery of Bearer
Securities, whether any Securities of the series are to be issuable
initially in temporary global form and whether any Securities of the series
are to be issuable in permanent global form with or without coupons and, if
so, whether beneficial owners of interests in any such permanent global
Security may exchange such interests for Securities of such series and of
like tenor of any authorized form and denomination and the circumstances
under which any such exchanges may occur, if other than in the manner
provided in Section 305, whether Registered Securities of the series may be
exchanged for Bearer Securities of the series (if permitted by applicable
laws and regulations), whether Bearer Securities of the series may be
exchanged for
19
Registered Securities of the series, and the circumstances under which and
the place or places where such exchanges may be made and if Securities of
the series are to be issuable in global form, the identity of any initial
depository therefor;
(19) the date as of which any Bearer Securities of the series and any
temporary global Security representing Outstanding Securities of the series
shall be dated if other than the date of original issuance of the first
Security of the series to be issued;
(20) the Person to whom any interest on any Registered Security of the
series shall be payable, if other than the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close
of business on the Regular Record Date for such interest, the manner in
which, or the Person to whom, any interest on any Bearer Security of the
series shall be payable, if otherwise than upon presentation and surrender
of the coupons appertaining thereto as they severally mature, and the
extent to which, or the manner in which, any interest payable on a
temporary global Security on an Interest Payment Date will be paid if other
than in the manner provided in Section 304;
(21) if Securities of the series are to be issuable in definitive form
(whether upon original issue or upon exchange of a temporary Security of
such series) only upon receipt of certain certificates or other documents
or satisfaction of other conditions, the form and/or terms of such
certificates, documents or conditions;
(22) if the Securities of the series are to be issued upon the
exercise of warrants or upon the conversion or exchange of other
securities, the time, manner and place for such Securities to be
authenticated and delivered;
(23) whether and under what circumstances the Company will pay
Additional Amounts as contemplated by Section 1005 on the Securities of the
series to any Holder who is not a United States person (including any
modification to the definition of such term) in respect of any tax,
assessment or governmental charge and, if so, whether the Company will have
the option to redeem such Securities rather than pay such Additional
Amounts (and the terms of any such option);
(24) if the Securities of the series are to be convertible into or
exchangeable for any securities of any Person (including the Company), the
terms and conditions upon which such Securities will be so convertible or
exchangeable;
(25) any other terms, conditions, rights and preferences (or
limitations on such rights and preferences) relating to the series (which
terms shall not be inconsistent with the requirements of the Trust
Indenture Act or the provisions of this Indenture).
All Securities of any one series and the coupons appertaining to any
Bearer Securities of such series shall be substantially identical except, in
the case of Registered Securities, as to denomination and except as may
otherwise be provided in or pursuant to such Board Resolution (subject to
Section 303) and set forth in such Officers' Certificate or in any such
indenture supplemental hereto. Not all Securities of any one series need be
issued at the same time, and, unless otherwise provided, a series may be
reopened for issuances of additional Securities of such series.
If any of the terms of the series are established by action taken
pursuant to one or more
20
Board Resolutions, such Board Resolutions shall be delivered to the Trustee at
or prior to the delivery of the Officers' Certificate setting forth the terms
of the series.
SECTION 302. Denominations.
All Securities shall be issuable in such denominations as shall be
specified as contemplated by Section 301. With respect to Securities of any
series denominated in Dollars, in the absence of any such provisions, the
Registered Securities of such series, other than Registered Securities issued
in global form (which may be of any denomination), shall be issuable in
denominations of $1,000 and any integral multiple thereof and the Bearer
Securities of such Series, other than the Bearer Securities issued in global
form (which may be of any denomination), shall be issuable in a denomination of
$5,000.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities and any coupons appertaining thereto shall be executed
on behalf of the Company by its Chairman, its President or a Vice President,
under its corporate seal reproduced thereon attested by its Secretary or an
Assistant Secretary. The signature of any of these officers on the Securities
or coupons may be the manual or facsimile signatures of the present or any
future such authorized officer and may be imprinted or otherwise reproduced on
the Securities.
Securities or coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities or
coupons.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series together with
any coupon appertaining thereto, executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with such Company
Order shall authenticate and deliver such Securities; provided, however, that,
in connection with its original issuance, no Bearer Security shall be mailed or
otherwise delivered to any location in the United States; and provided further
that, unless otherwise specified with respect to any series of Securities
pursuant to Section 301, a Bearer Security may be delivered in connection with
its original issuance only if the Person entitled to receive such Bearer
Security shall have furnished a certificate in the form set forth in Exhibit
A-1 to this Indenture, dated no earlier than 15 days prior to the earlier of
the date on which such Bearer Security is delivered and the date on which any
temporary Security first becomes exchangeable for such Bearer Security in
accordance with the terms of such temporary Security and this Indenture. If any
Security shall be represented by a permanent global Bearer Security, then, for
purposes of this Section and Section 304, the notation of a beneficial owner's
interest therein upon original issuance of such Security or upon exchange of a
portion of a temporary global Security shall be deemed to be delivered in
connection with its original issuance of such beneficial owner's interest in
such permanent global Security. Except as permitted by Section 306, the Trustee
shall not authenticate and deliver any Bearer Security unless all appurtenant
coupons for interest then matured have been detached and cancelled. If not all
the Securities of any series are to be issued at one time and if the Board
Resolution or supplemental indenture establishing such series shall so permit,
such Company Order may set forth procedures acceptable to the Trustee for the
issuance of such Securities and determining terms of particular Securities of
such series such as interest rate, maturity date, date of issuance and date
from which interest shall accrue.
In authenticating such Securities, and accepting the additional
responsibilities under this
21
Indenture in relation to such Securities, the Trustee shall be entitled to
receive, and (subject to TIA Sections 315(a) through 315(d)) shall be fully
protected in relying upon, an Opinion of Counsel stating:
(a) that the form or forms of such Securities and any coupons have
been established in conformity with the provisions of this Indenture;
(b) that the terms of such Securities and any coupons have been
established in conformity with the provisions of this Indenture;
(c) that such Securities, together with any coupons appertaining
thereto, when completed by appropriate insertions and executed and
delivered by the Company to the Trustee for authentication in accordance
with this Indenture, authenticated and delivered by the Trustee in
accordance with this Indenture and issued by the Company in the manner and
subject to any conditions specified in such Opinion of Counsel, will
constitute the legal, valid and binding obligations of the Company,
enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization and other similar laws of general
applicability relating to or affecting the enforcement of creditors'
rights, to general equitable principles and to such other qualifications as
such counsel shall conclude do not materially affect the rights of Holders
of such Securities and any coupons;
(d) that all laws and requirements in respect of the execution and
delivery by the Company of such Securities, any coupons and of the
supplemental indentures, if any, have been complied with (except for the
federal securities laws, the Trust Indenture Act of 1939, as amended, and
the securities or blue sky laws of the various states, as to which no
opinion need be expressed) and that authentication and delivery of such
Securities and any coupons and the execution and delivery of the
supplemental indenture, if any, by the Trustee will not violate the terms
of the Indenture;
(e) that the Company has the corporate power to issue such Securities
and any coupons, and has duly taken all necessary corporate action with
respect to such issuance; and
(f) that the issuance of such Securities and any coupons will not
contravene the articles of incorporation or by-laws of the Company or
result in any violation of any of the terms or provisions of any law or
regulation or of any indenture, mortgage or other agreement known to such
Counsel by which the Company is bound.
Notwithstanding the provisions of Section 301 and of the preceding two
paragraphs, if less than all the Securities of any series are to be issued at
one time, it shall not be necessary to deliver the Officers' Certificate
otherwise required pursuant to Section 301 or the Company Order and Opinion of
Counsel otherwise required pursuant to the preceding two paragraphs prior to or
at the time of issuance of each Security, but such documents shall be delivered
prior to or at the time of issuance of the first Security of such series.
The Trustee shall not be required to authenticate and deliver any such
Securities if the issue of such Securities pursuant to this Indenture will
affect the Trustee's own rights, duties or immunities under the Securities and
this Indenture or otherwise in a manner which is not reasonably acceptable to
the Trustee.
Each Registered Security shall be dated the date of its
authentication; and each Bearer
22
Security shall be dated as of the date specified as contemplated by Section
301.
No Security or coupon shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on
such Security a certificate of authentication substantially in the form
provided for herein duly executed by the Trustee by manual signature of an
authorized officer, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated
and delivered hereunder and is entitled to the benefits of this Indenture.
Notwithstanding the foregoing, if any Security shall have been authenticated
and delivered hereunder but never issued and sold by the Company, and the
Company shall deliver such Security to the Trustee for cancellation as provided
in Section 310 together with a written statement (which need not comply with
Section 102 and need not be accompanied by an Opinion of Counsel) stating that
such Security has never been issued and sold by the Company, for all purposes
of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form or, if authorized, in bearer form with one or
more coupon or without coupons, and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as conclusively evidenced by their execution of such
Securities. In the case of Securities of any series, such temporary Securities
may be in global form.
Except in the case of temporary Securities in global form (which shall
be exchanged in accordance with the provisions of the following paragraphs), if
temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series, upon surrender of the temporary Securities of such series at the
office or agency of the Company in a Place of Payment for that series, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities of any series (accompanied by any unmatured coupons
appertaining thereto), the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of the same series of authorized denominations; provided,
however, that no definitive Bearer Security shall be delivered in exchange for
a temporary Registered Security; and provided further that a definitive Bearer
Security shall be delivered in exchange for a temporary Bearer Security only in
compliance with the conditions set forth in Section 303. Until so exchanged the
temporary Securities of any series shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of such series.
If temporary Securities of any series are issued in global form, any
such temporary global Security shall, unless otherwise provided therein, be
delivered to the London office of a depositary or common depositary (the
"Common Depositary"), for the benefit of Euroclear and CEDEL S.A., for credit
to the respective accounts of the beneficial owners of such Securities (or to
such other accounts as they may direct).
Without unnecessary delay, but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary global
Security (the "Exchange Date"), the
23
Company shall deliver to the Trustee definitive Securities, in aggregate
principal amount equal to the principal amount of such temporary global
Security, executed by the Company. On or after the Exchange Date such temporary
global Security shall be surrendered by the Common Depositary to the Trustee,
as the Company's agent for such purpose, to be exchanged, in whole or from time
to time in part, for definitive Securities without charge and the Trustee shall
authenticate and deliver, in exchange for each portion of such temporary global
Security, an equal aggregate principal amount of definitive Securities of the
same series of authorized denominations and of like tenor as the portion of
such temporary global Security to be exchanged. The definitive Securities to be
delivered in exchange for any such temporary global Security shall be in bearer
form, registered form, permanent global bearer form or permanent global
registered form, or any combination thereof, as specified as contemplated by
Section 301, and, if any combination thereof is so specified, as requested by
the beneficial owner thereof; provided, however, that, unless otherwise
specified in such temporary global Security, upon such presentation by the
Common Depositary, such temporary global Security is accompanied by a
certificate dated the Exchange Date or a subsequent date and signed by
Euroclear as to the portion of such temporary global Security held for its
account then to be exchanged and a certificate dated the Exchange Date or a
subsequent date and signed by CEDEL S.A. as to the portion of such temporary
global Security held for its account then to be exchanged, each in the form set
forth in Exhibit A-2 to this Indenture (or in such other form as may be
established pursuant to Section 301); and provided further that definitive
Bearer Securities shall be delivered in exchange for a portion of a temporary
global Security only in compliance with the requirements of Section 303.
Unless otherwise specified in such temporary global Security, the
interest of a beneficial owner of Securities of a series in a temporary global
Security shall be exchanged for definitive Securities of the same series and of
like tenor following the Exchange Date when the account holder instructs
Euroclear or CEDEL S.A., as the case may be, to request such exchange on his
behalf and delivers to Euroclear or CEDEL S.A., as the case may be, a
certificate in the form set forth in Exhibit A-1 to this Indenture (or in such
other form as may be established pursuant to Section 301), dated no earlier
than 15 days prior to the Exchange Date, copies of which certificate shall be
available from the offices of Euroclear and CEDEL S.A., the Trustee, any
Authenticating Agent appointed for such series of Securities and each Paying
Agent. Unless otherwise specified in such temporary global Security, any such
exchange shall be made free of charge to the beneficial owners of such
temporary global Security, except that a Person receiving definitive Securities
must bear the cost of insurance, postage, transportation and the like in the
event that such Person does not take delivery of such definitive Securities in
person at the offices of Euroclear or CEDEL S.A. Definitive Securities in
bearer form to be delivered in exchange for any portion of a temporary global
Security shall be delivered only outside the United States.
Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated by Section 301, interest payable on a temporary
global Security on an Interest Payment Date for Securities of such series
occurring prior to the applicable Exchange Date shall be payable to Euroclear
and CEDEL S.A. on such Interest Payment Date upon delivery by Euroclear and
CEDEL S.A. to the Trustee of a certificate or certificates in the form set
forth in Exhibit A-2 to this Indenture (or in such other form as may be
established pursuant to Section 301), for credit without further interest on or
after such Interest Payment Date to the respective accounts of the Persons who
are the beneficial owners of such temporary global Security on such Interest
Payment Date and who have each delivered to Euroclear or CEDEL S.A., as the
case may be, a certificate dated no earlier than 15 days prior to the Interest
Payment Date occurring prior to such Exchange Date in the form set forth in
Exhibit A-1 to this Indenture (or in such other form as may be established
pursuant to Section 301). Notwithstanding
24
anything to the contrary herein contained, the certifications made pursuant to
this paragraph shall satisfy the certification requirements of the preceding
two paragraphs of this Section and of the third paragraph of Section 303 of
this Indenture and the interests of the Persons who are the beneficial owners
of the temporary global Security with respect to which such certification was
made will be exchanged for definitive Securities of the same series and of like
tenor on the Exchange Date or the date of certification if such date occurs
after the Exchange Date, without further act or deed by such beneficial owners.
Except as otherwise provided in this paragraph, no payments of principal or
interest owing with respect to a beneficial interest in a temporary global
Security will be made unless and until such interest in such temporary global
Security shall have been exchanged for an interest in a definitive Security.
Any interest so received by Euroclear and CEDEL S.A. and not paid as herein
provided shall be returned to the Trustee immediately prior to the expiration
of two years after such Interest Payment Date in order to be repaid to the
Company in accordance with Section 1003.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register for each series of Securities (the registers maintained
in the Corporate Trust Office of the Trustee and in any other office or agency
of the Company in a Place of Payment being herein sometimes collectively
referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Registered Securities and of transfers of Registered Securities. The
Security Register shall be in written form or any other form capable of being
converted into written form within a reasonable time. At all reasonable times,
the Security Register shall be open to inspection by the Trustee. The Trustee
is hereby initially appointed as security registrar (the "Security Registrar")
for the purpose of registering Registered Securities and transfers of
Registered Securities as herein provided.
Upon surrender for registration of transfer of any Registered Security
of any series at the office or agency in a Place of Payment for that series,
the Company shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee, one or more new Registered Securities of
the same series, of any authorized denominations and of a like aggregate
principal amount and tenor.
At the option of the Holder, Registered Securities of any series may
be exchanged for other Registered Securities of the same series, of any
authorized denomination and of a like aggregate principal amount, upon
surrender of the Registered Securities to be exchanged at such office or
agency. Whenever any Registered Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Registered Securities which the Holder making the exchange is entitled to
receive. Unless otherwise specified with respect to any series of Securities as
contemplated by Section 301, Bearer Securities may not be issued in exchange
for Registered Securities.
If (but only if) expressly permitted in or pursuant to the applicable
Board Resolution and (subject to Section 303) set forth in the applicable
Officers' Certificate, or in any indenture supplemental hereto, delivered as
contemplated by Section 301, at the option of the Holder, Bearer Securities of
any series may be exchanged for Registered Securities of the same series of any
authorized denomination and of a like aggregate principal amount and tenor,
upon surrender of the Bearer Securities to be exchanged at any such office or
agency, with all unmatured coupons and all matured coupons in default thereto
appertaining. If the Holder of a Bearer Security is unable to produce any such
unmatured coupon or coupons or matured coupon or coupons in default, any such
permitted exchange may be effected if the Bearer Securities are accompanied by
payment in funds acceptable to the Company in an amount equal to the face
amount of such missing coupon or coupons, or the surrender of such missing
coupon or coupons
25
may be waived by the Company and the Trustee if there is furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Security shall surrender to
any Paying Agent any such missing coupon in respect of which such a payment
shall have been made, such Holder shall be entitled to receive the amount of
such payment; provided, however, that, except as otherwise provided in Section
1002, interest represented by coupons shall be payable only upon presentation
and surrender of those coupons at an office or agency located outside the
United States. Notwithstanding the foregoing, in case a Bearer Security of any
series is surrendered at any such office or agency in a permitted exchange for
a Registered Security of the same series and like tenor after the close of
business at such office or agency on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at
such office or agency on the related proposed date for payment of Defaulted
Interest, such Bearer Security shall be surrendered without the coupon relating
to such Interest Payment Date or proposed date for payment, as the case may be,
and interest or Defaulted Interest, as the case may be, will not be payable on
such Interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture.
Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent global Security shall be
exchangeable only as provided in this paragraph. If any beneficial owner of an
interest in a permanent global Security is entitled to exchange such interest
for Securities of such series and of like tenor and principal amount of another
authorized form and denomination, as specified as contemplated by Section 301
and provided that any applicable notice provided in the permanent global
Security shall have been given, then without unnecessary delay but in any event
not later than the earliest date on which such interest may be so exchanged,
the Company shall deliver to the Trustee definitive Securities in aggregate
principal amount equal to the principal amount of such beneficial owner's
interest in such permanent global Security, executed by the Company. On or
after the earliest date on which such interests may be so exchanged, such
permanent global Security shall be surrendered by the Common Depositary or such
other depositary as shall be specified in the Company Order with respect
thereto to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
without charge, and the Trustee shall authenticate and deliver, in exchange for
each portion of such permanent global Security, an equal aggregate principal
amount of definitive Securities of the same series of authorized denominations
and of like tenor as the portion of such permanent global Security to be
exchanged which, unless the Securities of the series are not issuable both as
Bearer Securities and as Registered Securities, as specified as contemplated by
Section 301, shall be in the form of Bearer Securities or Registered
Securities, or any combination thereof, as shall be specified by the beneficial
owner thereof; provided, however, that no such exchanges may occur during a
period beginning at the opening of business 15 days before any selection of
Securities to be redeemed and ending on the relevant Redemption Date if the
Security for which exchange is requested may be among those selected for
redemption; and provided further that no Bearer Security delivered in exchange
for a portion of a permanent global Security shall be mailed or otherwise
delivered to any location in the United States. If a Registered Security is
issued in exchange for any portion of a permanent global Security after the
close of business at the office or agency where such exchange occurs on (i) any
Regular Record Date and before the opening of business at such office or agency
on the relevant Interest Payment Date, or (ii) any Special Record Date and the
opening of business
26
at such office or agency on the related proposed date for payment of interest
or Defaulted Interest, as the case may be, will not be payable on such Interest
Payment Date or proposed date for payment, as the case may be, in respect of
such Registered Security, but will be payable on such Interest Payment Date or
proposed date for payment, as the case may be, only to the Person to whom
interest in respect of such portion of such permanent global Security is
payable in accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Security
Registrar) be duly endorsed, or be accompanied by a written instrument of
transfer, in form satisfactory to the Company and the Security Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906, 1107 or 1305 not involving any
transfer.
The Company shall not be required (i) to issue, to register the
transfer of or to exchange Securities of any series during a period beginning
at the opening of business 15 days before the day of the selection for
redemption of Securities of that series under Section 1103 or 1203 and ending
at the close of business on (A) if Securities of the series are issuable only
as Registered Securities, the day of the mailing of the relevant notice of
redemption and (B) if Securities of the series are issuable as Bearer
Securities, the day of the first publication of the relevant notice of
redemption or, if Securities of the series are also issuable as Registered
Securities and there is no publication, the mailing of the relevant notice of
redemption, or (ii) to register the transfer of or exchange any Registered
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part, or (iii) to exchange any Bearer
Security so selected for redemption except that such a Bearer Security may be
exchanged for a Registered Security of that series and like tenor; provided
that such Registered Security shall be simultaneously surrendered for
redemption, or (iv) to issue, to register the transfer of or to exchange any
Security which has been surrendered for repayment at the option of the Holder,
except the portion, if any, of such Security not to be so repaid.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security or a Security with a mutilated coupon
appertaining to it is surrendered to the Trustee, the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding, with coupons corresponding to the coupons,
if any, appertaining to the surrendered Security, or, in case any such
mutilated Security or coupon has become or is about to become due and payable,
the Company in its discretion may, instead of issuing a new Security, with
coupons corresponding to the coupons, if any, appertaining to the surrendered
Security, pay such Security or coupon.
If there shall be delivered to the Company and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security or coupon and (ii) such security or indemnity as may be required by
them to save each of them and any agent of either of them harmless, then, in
the
27
absence of notice to the Company or the Trustee that such Security or coupon
has been acquired by a bona fide purchaser, the Company shall execute and upon
Company Order the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security or in exchange for the Security for which a
destroyed, lost or stolen coupon appertains (with all appurtenant coupons not
destroyed, lost or stolen), a new Security of the same series and of like tenor
and principal amount and bearing a number not contemporaneously outstanding,
with coupons corresponding to the coupons, if any, appertaining to such
destroyed, lost or stolen Security or to the Security to which such destroyed,
lost or stolen coupon appertains, or, in case any such destroyed, lost or
stolen Security or coupon has become or is about to become due and payable, the
Company in its discretion may, instead of issuing a new Security, with coupons
corresponding to the coupons, if any, appertaining to such destroyed, lost or
stolen Security or to the Security to which such destroyed, lost or stolen
coupon appertains, pay such Security or coupon.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series with its coupons, if any, issued
pursuant to this Section in lieu of any destroyed, lost or stolen Security or
in exchange for a Security to which a destroyed, lost or stolen coupon
appertains, shall constitute an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen Security and its
coupons, if any, or the destroyed, lost or stolen coupon shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series and their coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities or
coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved; Optional
Interest Reset.
(a) Unless otherwise provided as contemplated by Section 301 with
respect to any series of Securities, interest on any Registered Security which
is payable, and is punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the Person in whose name such Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest at the office or agency of the Company
maintained for such purpose pursuant to Section 1002; provided, however, that
each installment of interest on any Registered Security may at the Company's
option be paid by (i) mailing a check for such interest, payable to or upon the
written order of the Person entitled thereto pursuant to Section 309, to the
address of such Person as it appears on the Security Register or (ii) transfer
to an account maintained by the payee located in the United States.
Unless otherwise provided as contemplated by Section 301 with respect
to the Securities of any series, payment of interest may be made, in the case
of a Bearer Security, by transfer to an account maintained by the payee with a
bank located outside the United States.
Unless otherwise provided as contemplated by Section 301, every
permanent global Security will provide that interest, if any, payable on any
Interest Payment Date will be paid to each of Euroclear and CEDEL S.A. with
respect to that portion of such permanent global Security held for its account
by the Common Depositary, for the purpose of permitting each of Euroclear and
CEDEL S.A. to
28
credit the interest received by it in respect of such permanent global Security
to the accounts of the beneficial owners thereof.
Any interest on any Registered Security of any series which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date shall forthwith cease to be payable to the Holder on the relevant
Regular Record Date by virtue of having been such Holder, and such defaulted
interest and, if applicable, interest on such defaulted interest (to the extent
lawful) at the rate specified in the Securities of such series (such defaulted
interest and, if applicable, interest thereon herein collectively called
"Defaulted Interest") may be paid by the Company, at its election in each case,
as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Registered Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Registered Security of such series and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money in the Currency in which the Securities of such
series are payable (except as otherwise specified pursuant to Section 301
for the Securities of such series and except, if applicable, as provided in
Sections 312(b), 312(d) and 312(e)) equal to the aggregate amount proposed
to be paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit on or prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be given in the manner provided in
Section 106, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so given, such Defaulted Interest shall be
paid to the Persons in whose name the Registered Securities of such series
(or their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
(b) The provisions of this Section 307(b) may be made applicable to
any series of Securities pursuant to Section 301 (with such modifications,
additions or substitutions as may be specified pursuant to such Section 301).
The interest rate (or the spread or spread multiplier used to calculate such
interest rate, if applicable) on any Security of such series may be reset by
the Company on the date or dates specified on the face of such Security (each
an "Optional Reset Date"). The Company may exercise such option with respect to
such Security by notifying the Trustee of such exercise at least 50 but not
29
more than 60 days prior to an Optional Reset Date for such Note. Not later than
40 days prior to each Optional Reset Date, the Trustee shall transmit, in the
manner provided for in Section 106, to the Holder of any such Security a notice
(the "Reset Notice") indicating whether the Company has elected to reset the
interest rate (or the spread or spread multiplier used to calculate such
interest rate, if applicable), and if so (i) such new interest rate (or such
new spread or spread multiplier, if applicable) and (ii) the provisions, if
any, for redemption during the period from such Optional Reset Date to the next
Optional Reset Date or if there is no such next Optional Reset Date, to the
Stated Maturity Date of such Security (each such period a "Subsequent Interest
Period"), including the date or dates on which or the period or periods during
which and the price or prices at which such redemption may occur during the
Subsequent Interest Period.
Notwithstanding the foregoing, not later than 20 days prior to the
Optional Reset Date, the Company may, at its option, revoke the interest rate
(or the spread or spread multiplier used to calculate such interest rate, if
applicable) provided for in the Reset Notice and establish an interest rate (or
a spread or spread multiplier used to calculate such interest rate, if
applicable) that is higher than the interest rate (or the spread or spread
multiplier, if applicable) provided for in the Reset Notice, for the Subsequent
Interest Period by causing the Trustee to transmit, in the manner provided for
in Section 106, notice of such higher interest rate (or such higher spread or
spread multiplier, if applicable) to the Holder of such Security. Such notice
shall be irrevocable. All Securities with respect to which the interest rate
(or the spread or spread multiplier used to calculate such interest rate, if
applicable) is reset on an Optional Reset Date, and with respect to which the
Holders of such Securities have not tendered such Securities for repayment (or
have validly revoked any such tender) pursuant to the next succeeding
paragraph, will bear such higher interest rate (or such higher spread or spread
multiplier, if applicable).
The Holder of any such Security will have the option to elect
repayment by the Company of the principal of such Security on each Optional
Reset Date at a price equal to the principal amount thereof plus interest
accrued to such Optional Reset Date. In order to obtain repayment on an
Optional Reset Date, the Holder must follow the procedures set forth in Article
Thirteen for repayment at the option of Holders except that the period for
delivery or notification to the Trustee shall be at least 25 but not more than
35 days prior to such Optional Reset Date and except that, if the Holder has
tendered any Security for repayment pursuant to the Reset Notice, the Holder
may, by written notice to the Trustee, revoke such tender or repayment until
the close of business on the tenth day before such Optional Reset Date.
Subject to the foregoing provisions of this Section and Section 305,
each Security delivered under this Indenture upon registration of transfer of
or in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 308. Optional Extension of Stated Maturity.
The provisions of this Section 308 may be made applicable to any
series of Securities pursuant to Section 301 (with such modifications,
additions or substitutions as may be specified pursuant to such Section 301).
The Stated Maturity of any Security of such series may be extended at the
option of the Company for the period or periods specified on the face of such
Security (each an "Extension Period") up to but not beyond the date (the "Final
Maturity") set forth on the face of such Security. The Company may exercise
such option with respect to any Security by notifying the Trustee of such
exercise at least 50 but not more than 60 days prior to the Stated Maturity of
such Security in effect prior to the exercise of such option (the "Original
Stated Maturity"). If the Company exercises such option, the Trustee shall
transmit, in the manner provided for in Section 106, to the Holder of such
Security not later than 40 days
30
prior to the Original Stated Maturity a notice (the "Extension Notice")
indicating (i) the election of the Company to extend the Stated Maturity, (ii)
the new Stated Maturity, (iii) the interest rate applicable to the Extension
Period and (iv) the provisions, if any, for redemption during such Extension
Period. Upon the Trustee's transmittal of the Extension Notice, the Stated
Maturity of such Security shall be extended automatically and, except as
modified by the Extension Notice and as described in the next paragraph, such
Security will have the same terms as prior to the transmittal of such Extension
Notice.
Notwithstanding the foregoing, not later than 20 days before the
Original Stated Maturity of such Security, the Company may, at its option,
revoke the interest rate provided for in the Extension Notice and establish a
higher interest rate for the Extension Period by causing the Trustee to
transmit, in the manner provided for in Section 106, notice of such higher
interest rate to the Holder of such Security. Such notice shall be irrevocable.
All Securities with respect to which the Stated Maturity is extended will bear
such higher interest rate.
If the Company extends the Maturity of any Security, the Holder will
have the option to elect repayment of such Security by the Company on the
Original Stated Maturity at a price equal to the principal amount thereof, plus
interest accrued to such date. In order to obtain repayment on the Original
Stated Maturity once the Company has extended the Maturity thereof, the Holder
must follow the procedures set forth in Article Thirteen for repayment at the
option of Holders, except that the period for delivery or notification to the
Trustee shall be at least 25 but not more than 35 days prior to the Original
Stated Maturity and except that, if the Holder has tendered any Security for
repayment pursuant to an Extension Notice, the Holder may by written notice to
the Trustee revoke such tender for repayment until the close of business on the
tenth day before the Original Stated Maturity.
SECTION 309. Persons Deemed Owners.
Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Registered Security is registered as
the owner of such Registered Security for the purpose of receiving payment of
principal of (and premium, if any, on) and (subject to Sections 305 and 307)
interest on such Security and for all other purposes whatsoever, whether or not
such Security be overdue, and none of the Company, the Trustee or any agent of
the Company or the Trustee shall be affected by notice to the contrary.
Title to any Bearer Security and any coupons appertaining thereto
shall pass by delivery. The Company, the Trustee and any agent of the Company
or the Trustee may treat the bearer of any Bearer Security and the bearer of
any coupon as the absolute owner of such Security or coupon for the purpose of
receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Security or coupons be overdue, and none of the
Company, the Trustee or any agent of the Company or the Trustee shall be
affected by notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
31
Notwithstanding the foregoing, with respect to any global Security,
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by any depositary, as a Holder, with respect
to such global Security or impair, as between such depositary and owners of
beneficial interests in such global Security, the operation of customary
practices governing the exercise of the rights of such depositary (or its
nominee) as Holder of such global Security.
SECTION 310. Cancellation.
All Securities and coupons surrendered for payment, redemption,
repayment at the option of the Holder, registration of transfer or exchange or
for credit against any current or future sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee.
All Securities and coupons so delivered to the Trustee shall be promptly
cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and may deliver
to the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the
Company has not issued and sold, and all Securities so delivered shall be
promptly cancelled by the Trustee. If the Company shall so acquire any of the
Securities, however, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Securities unless and
until the same are surrendered to the Trustee for cancellation. No Securities
shall be authenticated in lieu of or in exchange for any Securities cancelled
as provided in this Section, except as expressly permitted by this Indenture.
All cancelled Securities held by the Trustee shall be disposed of by the
Trustee in accordance with its customary procedures and certification of their
disposal delivered to the Company unless by Company Order the Company shall
direct that cancelled Securities be returned to it.
SECTION 311. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 with
respect to any Securities, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
SECTION 312. Currency and Manner of Payments in Respect of Securities.
(a) Unless otherwise specified with respect to any Securities pursuant
to Section 301, with respect to Registered Securities of any series not
permitting the election provided for in paragraph (b) below or the Holders of
which have not made the election provided for in paragraph (b) below, and with
respect to Bearer Securities of any series, except as provided in paragraph (d)
below, payment of the principal of (and premium, if any, on) and interest, if
any, on any Registered or Bearer Security of such series will be made in the
Currency in which such Registered Security or Bearer Security, as the case may
be, is payable. The provisions of this Section 312 may be modified or
superseded with respect to any Securities pursuant to Section 301.
(b) It may be provided pursuant to Section 301 with respect to
Registered Securities of any series that Holders shall have the option, subject
to paragraphs (d) and (e) below, to receive payments of principal of (and
premium, if any, on) or interest, if any, on such Registered Securities in any
of the Currencies which may be designated for such election by delivering to
the Trustee a written election with signature guarantees and in the applicable
form established pursuant to Section 301, not later than the close of business
on the Election Date immediately preceding the applicable payment date. If a
Holder so elects to receive such payments in any such Currency, such election
will remain in effect for such Holder
32
or any transferee of such Holder until changed by such Holder or such
transferee by written notice to the Trustee (but any such change must be made
not later than the close of business on the Election Date immediately preceding
the next payment date to be effective for the payment to be made on such
payment date and no such change of election may be made with respect to
payments to be made on any Registered Security of such series with respect to
which an Event of Default has occurred or with respect to which the Company has
deposited funds pursuant to Article Four or with respect to which a notice of
redemption has been given by the Company or a notice of option to elect
repayment has been sent by such Holder or such transferee). Any Holder of any
such Registered Security who shall not have delivered any such election to the
Trustee not later than the close of business on the applicable Election Date
will be paid the amount due on the applicable payment date in the relevant
Currency as provided in Section 312(a). The Trustee shall notify the Exchange
Rate Agent as soon as practicable after the Election Date of the aggregate
principal amount of Registered Securities for which Holders have made such
written election.
(c) Unless otherwise specified pursuant to Section 301, if the
election referred to in paragraph (b) above has been provided for pursuant to
Section 301, then, unless otherwise specified pursuant to Section 301, not
later than the fourth Business Day after the Election Date for each payment
date for Registered Securities of any series, the Exchange Rate Agent will
deliver to the Company a written notice specifying, in the Currency in which
Registered Securities of such series are payable, the respective aggregate
amounts of principal of (and premium, if any, on) and interest, if any, on the
Registered Securities to be paid on such payment date, specifying the amounts
in such Currency so payable in respect of the Registered Securities as to which
the Holders of Registered Securities of such series shall have elected to be
paid in another Currency as provided in paragraph (b) above. If the election
referred to in paragraph (b) above has been provided for pursuant to Section
301 and if at least one Holder has made such election, then, unless otherwise
specified pursuant to Section 301, on the second Business Day preceding such
payment date the Company will deliver to the Trustee for such series of
Registered Securities an Exchange Rate Officer's Certificate in respect of the
Dollar or Foreign Currency payments to be made on such payment date. Unless
otherwise specified pursuant to Section 301, the Dollar or Foreign Currency
amount receivable by Holders of Registered Securities who have elected payment
in a Currency as provided in paragraph (b) above shall be determined by the
Company on the basis of the applicable Market Exchange Rate in effect on the
third Business Day (the "Valuation Date") immediately preceding each payment
date, and such determination shall be conclusive and binding for all purposes,
absent manifest error.
(d) If a Currency Conversion Event occurs with respect to a Foreign
Currency in which any of the Securities are denominated or payable other than
pursuant to an election provided for pursuant to paragraph (b) above, then with
respect to each date for the payment of principal of (and premium, if any, on)
and interest, if any, on the applicable Securities denominated or payable in
such Foreign Currency occurring after the last date on which such Foreign
Currency was used (the "Currency Conversion Date"), the Dollar shall be the
Currency of payment for use on each such payment date. Unless otherwise
specified pursuant to Section 301, the Dollar amount to be paid by the Company
to the Trustee and by the Trustee or any Paying Agent to the Holders of such
Securities with respect to such payment date shall be, in the case of a Foreign
Currency other than a currency unit, the Dollar Equivalent of the Foreign
Currency or, in the case of a currency unit, the Dollar Equivalent of the
Currency Unit, in each case as determined by the Exchange Rate Agent in the
manner provided in paragraph (f) or (g) below.
(e) Unless otherwise specified pursuant to Section 301, if the Holder
of a Registered Security denominated in any Currency shall have elected to be
paid in another Currency as provided in paragraph (b) above, and a Currency
Conversion Event occurs with respect to such elected Currency, such
33
Holder shall receive payment in the Currency in which payment would have been
made in the absence of such election; and if a Currency Conversion Event occurs
with respect to the Currency in which payment would have been made in the
absence of such election, such Holder shall receive payment in Dollars as
provided in paragraph (d) above.
(f) The "Dollar Equivalent of the Foreign Currency" shall be
determined by the Exchange Rate Agent and shall be obtained for each subsequent
payment date by converting the specified Foreign Currency into Dollars at the
Market Exchange Rate on the Currency Conversion Date.
(g) The "Dollar Equivalent of the Currency Unit" shall be determined
by the Exchange Rate Agent and subject to the provisions of paragraph (h) below
shall be the sum of each amount obtained by converting the Specified Amount of
each Component Currency into Dollars at the Market Exchange Rate for such
Component Currency on the Valuation Date with respect to each payment.
(h) For purposes of this Section 312 the following terms shall have
the following meanings:
A "Component Currency" shall mean any Currency which, on the Currency
Conversion Date, was a component currency of the relevant currency unit,
including, but not limited to, the ECU.
A "Specified Amount" of a Component Currency shall mean the number of
units of such Component Currency or fractions thereof which were
represented in the relevant currency unit, including, but not limited to,
the ECU, on the Currency Conversion Date. If after the Currency Conversion
Date the official unit of any Component Currency is altered by way of
combination or subdivision, the Specified Amount of such Component Currency
shall be divided or multiplied in the same proportion. If after the
Currency Conversion Date two or more Component Currencies are consolidated
into a single currency, the respective Specified Amounts of such Component
Currencies shall be replaced by an amount in such single Currency equal to
the sum of the respective Specified Amounts of such consolidated Component
Currencies expressed in such single Currency, and such amount shall
thereafter be a Specified Amount and such single Currency shall thereafter
be a Component Currency. If after the Currency Conversion Date any
Component Currency shall be divided into two or more currencies, the
Specified Amount of such Component Currency shall be replaced by amounts of
such two or more currencies, having an aggregate Dollar Equivalent value at
the Market Exchange Rate on the date of such replacement equal to the
Dollar Equivalent value of the Specified Amount of such former Component
Currency at the Market Exchange Rate immediately before such division and
such amounts shall thereafter be Specified Amounts and such currencies
shall thereafter be Component Currencies. If, after the Currency Conversion
Date of the relevant currency unit, including, but not limited to, the ECU,
a Currency Conversion Event (other than any event referred to above in this
definition of "Specified Amount") occurs with respect to any Component
Currency of such currency unit and is continuing on the applicable
Valuation Date, the Specified Amount of such Component Currency shall, for
purposes of calculating the Dollar Equivalent of the Currency Unit, be
converted into Dollars at the Market Exchange Rate in effect on the
Currency Conversion Date of such Component Currency.
"Election Date" shall mean the date for any series of Registered
Securities as specified pursuant to clause (13) of Section 301 by which the
written election referred to in paragraph (b) above may be made.
34
All decisions and determinations of the Exchange Rate Agent regarding
the Dollar Equivalent of the Foreign Currency, the Dollar Equivalent of the
Currency Unit, the Market Exchange Rate and changes in the Specified Amounts as
specified above shall be in its sole discretion and shall, in the absence of
manifest error, be conclusive for all purposes and irrevocably binding upon the
Company, the Trustee and all Holders of such Securities denominated or payable
in the relevant Currency. The Exchange Rate Agent shall promptly give written
notice to the Company and the Trustee of any such decision or determination.
In the event that the Company determines in good faith that a Currency
Conversion Event has occurred with respect to a Foreign Currency, the Company
will immediately give written notice thereof to the Trustee and to the Exchange
Rate Agent (and the Trustee will promptly thereafter give notice in the manner
provided for in Section 106 to the affected Holders) specifying the Currency
Conversion Date. In the event the Company so determines that a Currency
Conversion Event has occurred with respect to the ECU or any other currency
unit in which Securities are denominated or payable, the Company will
immediately give written notice thereof to the Trustee and to the Exchange Rate
Agent (and the Trustee will promptly thereafter give notice in the manner
provided for in Section 106 to the affected Holders) specifying the Currency
Conversion Date and the Specified Amount of each Component Currency on the
Currency Conversion Date. In the event the Company determines in good faith
that any subsequent change in any Component Currency as set forth in the
definition of Specified Amount above has occurred, the Company will similarly
give written notice to the Trustee and the Exchange Rate Agent.
The Trustee shall be fully justified and protected in relying and
acting upon information received by it from the Company and the Exchange Rate
Agent and shall not otherwise have any duty or obligation to determine the
accuracy or validity of such information independent of the Company or the
Exchange Rate Agent.
SECTION 313. Appointment and Resignation of Successor Exchange Rate
Agent.
(a) Unless otherwise specified pursuant to Section 301, if and so long
as the Securities of any series (i) are denominated in a Currency other than
Dollars or (ii) may be payable in a Currency other than Dollars, or so long as
it is required under any other provision of this Indenture, then the Company
will maintain with respect to each such series of Securities, or as so
required, at least one Exchange Rate Agent. The Company will cause the Exchange
Rate Agent to make the necessary foreign exchange determinations at the time
and in the manner specified pursuant to Section 301 for the purpose of
determining the applicable rate of exchange and, if applicable, for the purpose
of converting the issued Currency into the applicable payment Currency for the
payment of principal (and premium, if any) and interest, if any, pursuant to
Section 312.
(b) No resignation of the Exchange Rate Agent and no appointment of a
successor Exchange Rate Agent pursuant to this Section shall become effective
until the acceptance of appointment by the successor Exchange Rate Agent as
evidenced by a written instrument delivered to the Company and the Trustee.
(c) If the Exchange Rate Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Exchange
Rate Agent for any cause with respect to the Securities of one or more series,
the Company, by or pursuant to a Board Resolution, shall promptly appoint a
successor Exchange Rate Agent or Exchange Rate Agents with respect to the
Securities of that or those series (it being understood that any such successor
Exchange Rate Agent may be appointed with
35
respect to the Securities of one or more or all of such series and that, unless
otherwise specified pursuant to Section 301, at any time there shall only be
one Exchange Rate Agent with respect to the Securities of any particular series
that are originally issued by the Company on the same date and that are
initially denominated and/or payable in the same Currency).
SECTION 314. Designation as Senior Indebtedness.
The Company hereby confirms the designation of the Securities as
"Senior Indebtedness" for the purposes of any securities of the Company that
may be issued pursuant to the Subordinated Indenture.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect with respect to any series of Securities (except as to any surviving
rights of registration of transfer or exchange of Securities of such series
herein expressly provided for and the obligation of the Company to pay any
Additional Amounts as contemplated by Section 1005) and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture as to such series when
(1) either
(A) all Securities of such series theretofore authenticated and
delivered and all coupons, if any, appertaining thereto (other than
(i) coupons appertaining to Bearer Securities surrendered for exchange
for Registered Securities and maturing after such exchange, whose
surrender is not required or has been waived as provided in Section
305, (ii) Securities and coupons of such series which have been
destroyed, lost or stolen and which have been replaced or paid as
provided in Section 306, (iii) coupons appertaining to Securities
called for redemption and maturing after the relevant Redemption Date,
whose surrender has been waived as provided in Section 1106, and (iv)
Securities and coupons of such series for whose payment money has
theretofore been deposited in trust with the Trustee or any Paying
Agent or segregated and held in trust by the Company and thereafter
repaid to the Company, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(B) all Securities of such series and, in the case of (i) or (ii)
below, any coupons appertaining thereto not theretofore delivered to
the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) if redeemable at the option of the Company, are to be
called for redemption within one year under arrangements
satisfactory to the Trustee for the
36
giving of notice of redemption by the Trustee in the name, and
at the expense, of the Company, and the Company, in the case of
(i), (ii) or (iii) above, has irrevocably deposited or caused to
be deposited with the Trustee as trust funds in trust for the
purpose an amount, in the Currency in which the Securities of such
series are payable, sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation, for principal (and premium, if any) and
interest to the date of such deposit (in the case of Securities
which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture as to such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 606, the obligations of
the Trustee to any Authenticating Agent under Section 611 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities, the
coupons and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any) and interest for whose payment such money has been deposited
with the Trustee, but such money need not be segregated from other funds except
to the extent required by law.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(1) default in the payment of any interest on any Security of that
series, or any related coupon, when such interest or coupon becomes due and
payable, and continuance of such default for a period of 30 days; or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of
37
that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of the Securities of that series and Article Twelve; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a default in the performance,
or breach of a covenant or warranty which is specifically dealt with
elsewhere in this Section), and continuance of such default or breach for a
period of 60 days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by
the Holders of at least 25% in principal amount of all Outstanding
Securities a written notice specifying such default or breach and requiring
it to be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(5) the entry of a decree or order by a court having jurisdiction in
the premises adjudging the Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment
or composition of or in respect of the Company under the Federal Bankruptcy
Code or any other applicable federal or state law, or appointing a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance
of any such decree or order unstayed and in effect for a period of 90
consecutive days; or
(6) the institution by the Company of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of
bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under the
Federal Bankruptcy Code or any other applicable federal or state law, or
the consent by it to the filing of any such petition or to the appointment
of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Company or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due; or
(7) (A) there shall have occurred one or more defaults by the Company
or any Subsidiary in the payment of the principal of or premium, if any, on
Debt aggregating $50 million or more, when the same becomes due and payable
at the stated maturity thereof, and such default or defaults shall have
continued after any applicable grace period and shall not have been cured
or waived or (B) Debt of the Company or any Subsidiary aggregating $50
million or more shall have been accelerated or otherwise declared due and
payable, or required to be prepaid or repurchased (other than by regularly
scheduled required prepayment), prior to the stated maturity thereof; or
(8) any other Event of Default provided with respect to Securities of
that series.
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SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default described in clause (1), (2), (3), (4), (7) or
(8) of Section 501 with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if the
Securities of that series are Original Issue Discount Securities or Indexed
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all of the Securities of that series to be due and
payable immediately, by a notice in writing to the Company (and to the Trustee
if given by Holders), and upon any such declaration such principal amount (or
specified portion thereof) shall become immediately due and payable. If an
Event of Default described in clause (5) or (6) of Section 501 occurs and is
continuing, then the principal amount of all the Debt Securities shall ipso
facto become and be immediately due and payable without declaration or other
act on the part of the Trustee or any Holder.
At any time after a declaration of acceleration with respect to
Securities of any series (or of all series, as the case may be) has been made
and before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter in this Article provided, the Holders of a
majority in principal amount of the Outstanding Securities of that series (or
of all series, as the case may be), by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay in the Currency in which the Securities of such series
are payable (except as otherwise specified pursuant to Section 301 for the
Securities of such series and except, if applicable, as provided in
Sections 312(b), 312(d) and 312(e)),
(A) all overdue interest on all Outstanding Securities of that
series (or of all series, as the case may be) and any related coupons,
(B) all unpaid principal of (and premium, if any, on) any
Outstanding Securities of that series (or of all series, as the case
may be) which has become due otherwise than by such declaration of
acceleration, and interest on such unpaid principal at the rate or
rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful,
interest on overdue interest at the rate or rates prescribed therefor
in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of that series
(or of all series, as the case may be), other than the non-payment of
amounts of principal of (or premium, if any, on) or interest on Securities
of that series (or of all series, as the case may be) which have become due
solely by such declaration of acceleration, have been cured or waived as
provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Notwithstanding the preceding paragraph, in the event of a declaration
of acceleration in
39
respect of the Securities because of an Event of Default specified in Section
501(7) shall have occurred and be continuing, such declaration of acceleration
shall be automatically annulled if the Debt that is the subject of such Event
of Default has been discharged or the holders thereof have rescinded their
declaration of acceleration in respect of such Debt, and written notice of such
discharge or rescission, as the case may be, shall have been given to the
Trustee by the Company and countersigned by the holders of such Debt or a
trustee, fiduciary or agent for such holders, within 30 days after such
declaration of acceleration in respect of the Securities, and no other Event of
Default has occurred during such 30-day period which has not been cured or
waived during such period.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any installment of interest on
any Security and any related coupon when such interest becomes due and
payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof,
then the Company will, upon demand of the Trustee, pay to the Trustee for the
benefit of the Holders of such Securities and coupons, the whole amount then
due and payable on such Securities and coupons for principal (and premium, if
any) and interest, and interest on any overdue principal (and premium, if any)
and to the extent that payment of such interest is lawful on any overdue
interest, at the rate or rates prescribed therefor in such Securities, and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to Securities of any series (or of
all series, as the case may be) occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities of such series (or of all series, as the case may be) by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
40
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal, premium, if any, or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(i) to file and prove a claim for the whole amount of principal (and
premium, if any), or such portion of the principal amount of any series of
Original Issue Discount Securities or Indexed Securities as may be
specified in the terms of such series, and interest owing and unpaid in
respect of the Securities and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of
the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders,
to pay to the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and any other amounts due the Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities.
All rights of action and claims under this Indenture or the Securities
or coupons may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or coupons or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities and coupons in respect
of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, upon presentation of the Securities or coupons, or both,
as the case may be, and the notation thereon of the payment if only partially
paid and upon surrender thereof if fully paid:
41
First: To the payment of all amounts due the Trustee under Section
606;
Second: To the payment of the amounts then due and unpaid for
principal of (and premium, if any, on) and interest on the Securities and
coupons in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Securities and coupons for principal
(and premium, if any) and interest, respectively; and
Third: The balance, if any, to the Person or Persons entitled thereto
including, without limitation, the Company.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series or any related coupons shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series in the case of any Event of Default
described in clause (1), (2), (3), (4), (7) or (8) of Section 501, or, in
the case of any Event of Default described in clause (5) or (6) of Section
501, the Holders of not less than 25% in principal amount of all
Outstanding Securities, shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of at least a
majority or more in principal amount of the Outstanding Securities of that
series in the case of any Event of Default described in clause (1), (2),
(3), (4), (7) or (8) of Section 501, or, in the case of any Event of
Default described in clause (5) or (6) of Section 501, by the Holders of a
majority or more in principal amount of all Outstanding Securities;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Securities of the same series, in the case of any Event of Default
described in clause (1), (2), (3), (4), (7) or (8) of Section 501, or of
Holders of all Securities in the case of any Event of Default described in
clause (5) or (6) of Section 501, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all Holders of Securities of the same series, in the case of any
Event of Default described in clause (1), (2), (3), (4), (7) or (8) of Section
501, or of Holders of all Securities in the case of any Event of Default
described in clause (5) or (6) of Section
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501.
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment, as provided herein (including, if applicable, Article
Fourteen) and in such Security, of the principal of (and premium, if any, on)
and (subject to Section 307) interest on, such Security or payment of such
coupon on the respective Stated Maturities expressed in such Security or coupon
(or, in the case of redemption, on the Redemption Date) and to institute suit
for the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders of
Securities and coupons shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons in the
last paragraph of Section 306, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders of Securities or coupons is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security
or coupon to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time
to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
43
SECTION 512. Control by Holders.
With respect to the Securities of any series, the Holders of not less
than a majority in principal amount of the Outstanding Securities of such
series shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred on the Trustee, relating to or arising under clause (1),
(2), (3), (4), (7) or (8) of Section 501, and, with respect to all Securities,
the Holders of not less than a majority in principal amount of all Outstanding
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, not relating to or
arising under clause (1), (2), (3), (4), (7) or (8) of Section 501, provided
that in each case
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve it in
personal liability or be unjustly prejudicial to the Holders of Securities
of such series not consenting.
SECTION 513. Waiver of Past Defaults.
Subject to Section 502, the Holders of not less than a majority in
principal amount of the Outstanding Securities of any series may on behalf of
the Holders of all the Securities of such series waive any past default
described in clause (1), (2), (3), (4), (7) or (8) of Section 501 (or, in the
case of a default described in clause (5) or (6) of Section 501, the Holders of
not less than a majority in principal amount of all Outstanding Securities may
waive any such past default), and its consequences, except a default
(1) in respect of the payment of the principal of (or premium, if any,
on) or interest on any Security or any related coupon, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, any such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 514. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any
such law and covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Trustee, but will suffer and permit the
execution
44
of every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults.
Within 90 days after the occurrence of any Default hereunder with
respect to the Securities of any series, the Trustee shall transmit in the
manner and to the extent provided in TIA Section 313(c), notice of such default
hereunder known to the Trustee, unless such Default shall have been cured or
waived; provided, however, that, except in the case of a Default in the payment
of the principal of (or premium, if any, on) or interest on any Security of
such series or in the payment of any sinking fund installment with respect to
Securities of such series, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Trustee in good
faith determine that the withholding of such notice is in the interest of the
Holders of Securities of such series and any related coupons; and provided
further that in the case of any Default of the character specified in Section
501(4) with respect to Securities of such series, no such notice to Holders
shall be given until at least 30 days after the occurrence thereof.
SECTION 602. Certain Rights of Trustee.
Subject to the provisions of TIA Sections 315(a) through 315(d):
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document reasonably believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Securities of any series or any coupons
appertaining thereto pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
45
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(8) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 603. Trustee Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the Securities, except for the
Trustee's certificates of authentication, and in any coupons shall be taken as
the statements of the Company, and neither the Trustee nor any Authenticating
Agent assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder and that the statements made by it in a
Statement of Eligibility and Qualification on Form T-1 supplied to the Company
are true and accurate, subject to the qualifications set forth therein. Neither
the Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof.
SECTION 604. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company or of the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities
and coupons and, subject to TIA Sections 310(b) and 311, may otherwise deal
with the Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Security Registrar or such other agent.
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SECTION 605. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 606. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of the trust or trusts hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
The obligations of the Company under this Section to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture. As security for the performance of such
obligations of the Company, the Trustee shall have a claim prior to the
Securities upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the payment of principal of (and premium,
if any, on) or interest on particular Securities or any coupons.
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting
Interest.
There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1). Each successor Trustee
shall have a combined capital and surplus of at least $50,000,000. If such
corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of federal, state, territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.
SECTION 608. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor
47
Trustee in accordance with the applicable requirements of Section 609.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 609 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of not less than a majority in
principal amount of the Outstanding Securities of such series, delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six
months, or
(2) the Trustee shall cease to be eligible under Section 607(a) and
shall fail to resign after written request therefor by the Company or by
any Holder who has been a bona fide Holder of a Security for at least six
months, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee with respect to all Securities, or (ii) subject to TIA Section 315(e),
any Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee with respect
to all Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause,
with respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or
more or all of such series and that at any time there shall be only one Trustee
with respect to the Securities of any particular series). If, within one year
after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities of any series shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee with respect to
the Securities of such series and to that extent supersede the successor
Trustee appointed by the Company. If no successor Trustee with respect to the
Securities of any series shall have been so appointed by the Company or the
Holders and accepted appointment in the manner hereinafter provided, any Holder
who has been a bona fide Holder of a Security of such series for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
48
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
to the Holders of Securities of such series in the manner provided for in
Section 106. Each notice shall include the name of the successor Trustee with
respect to the Securities of such series and the address of its Corporate Trust
Office.
SECTION 609. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1)
shall contain such provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of
that or those series to which the appointment of such successor Trustee
relates, (2) if the retiring Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution and delivery of
such supplemental indenture to resignation or removal of the retiring Trustee
shall become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Company or any successor
Trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee
hereunder with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates. Whenever there is a successor
Trustee with respect to one or more (but less than all) series of securities
issued pursuant to this Indenture, the terms "Indenture" and "Securities" shall
have the meanings specified in the provisos to the respective definitions of
those terms in Section 101 which contemplate such situation.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all rights, powers and trusts referred to
in paragraph (a) or (b) of this Section, as the case may be.
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(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 610. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities;
and in case at that time any of the Securities shall not have been
authenticated, any successor Trustee may authenticate such Securities either in
the name of any predecessor hereunder or in the name of the successor Trustee;
and in all such cases such certificates shall have the full force which it is
anywhere in the Securities or in this Indenture provided that the certificate
of the Trustee shall have; provided, however, that the right to adopt the
certificate of authentication of any predecessor Trustee or to authenticate
Securities in the name of any predecessor Trustee shall apply only to its
successor or successors by merger, conversion or consolidation.
SECTION 611. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding, the Trustee
may appoint an Authenticating Agent or Agents with respect to one or more
series of Securities which shall be authorized to act on behalf of the Trustee
to authenticate Securities of such series and the Trustee shall give written
notice of such appointment to all Holders of Securities of the series with
respect to which such Authenticating Agent will serve, in the manner provided
for in Section 106. Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes
as if authenticated by the Trustee hereunder. Any such appointment shall be
evidenced by an instrument in writing signed by a Responsible Officer of the
Trustee, and a copy of such instrument shall be promptly furnished to the
Company. Wherever reference is made in this Indenture to the authentication and
delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the
United States of America, any state thereof or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by federal or state authority. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of said supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most recent report
of condition so published. If at any time an Authenticating Agent shall cease
to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate
50
agency or corporate trust business of an Authenticating Agent, shall continue
to be an Authenticating Agent, provided such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or
any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give written notice of
such appointment to all Holders of Securities of the series with respect to
which such Authenticating Agent will serve, in the manner provided for in
Section 106. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named as
an Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 606.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:
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This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE BANK OF NOVA SCOTIA TRUST
COMPANY OF NEW YORK,
as Trustee
By
--------------------------------
as Authenticating Agent
By
--------------------------------
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders.
Every Holder of Securities or coupons, by receiving and holding the
same, agrees with the Company and the Trustee that none of the Company or the
Trustee or any agent of either of them shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders in accordance with TIA Section 312, regardless of the source from which
such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
TIA Section 312(b).
SECTION 702. Reports by Trustee.
Within 60 days after May 15 of each year commencing with the first May
15 after the first issuance of Securities pursuant to this Indenture, the
Trustee shall transmit to the Holders of Securities, in the manner and to the
extent provided in TIA Section 313(c), a brief report dated as of such May 15
if required by TIA Section 313(a).
SECTION 703. Reports by Company.
The Company shall:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934; or, if the Company is not required to file
information, documents or reports pursuant to either of such Sections, then
it shall file with the Trustee and the Commission, in accordance with rules
and
52
regulations prescribed from time to time by the Commission, such of
the supplementary and periodic information, documents and reports which may
be required pursuant to Section 13 of the Securities Exchange Act of 1934
in respect of a security listed and registered on a national securities
exchange as may be prescribed from time to time in such rules and
regulations;
(2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(3) transmit to all Holders, in the manner and to the extent provided
in TIA Section 313(c), within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and reports required
to be filed by the Company pursuant to paragraphs (1) and (2) of this
Section as may be required by rules and regulations prescribed from time to
time by the Commission.
ARTICLE EIGHT
MERGER, CONSOLIDATION AND SALE OF ASSETS
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, unless:
(1) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or transfer,
or which leases, the properties and assets of the Company substantially as
an entirety (A) shall be a corporation, partnership or trust organized and
validly existing under the laws of the United States of America, any state
thereof or the District of Columbia and (B) shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, the Company's obligation for the due and
punctual payment of the principal of (and premium, if any, on) and interest
on all the Securities and the performance and observance of every covenant
of this Indenture on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing; and
(3) the Company or such Person shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and such supplemental
indenture comply with this Article and that all conditions precedent herein
provided for relating to such transaction have been complied with.
This Section shall only apply to a merger or consolidation in which
the Company is not the surviving corporation and to conveyances, leases and
transfers by the Company as transferor or lessor.
SECTION 802. Successor Person Substituted.
Upon any consolidation by the Company with or merger by the Company
into any other
53
corporation or any conveyance, transfer or lease of the properties and assets
of the Company substantially as an entirety to any Person in accordance with
Section 801, the successor Person formed by such consolidation or into which
the Company is merged or to which such conveyance, transfer or lease is made
shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and in the event of any
such conveyance or transfer, the Company (which term shall for this purpose
mean the Person named as the "Company" in the first paragraph of this Indenture
or any successor Person which shall theretofore become such in the manner
described in Section 801), except in the case of a lease, shall be discharged
of all obligations and covenants under this Indenture and the Securities and
the coupons and may be dissolved and liquidated.
SECTION 803. Securities to Be Secured in Certain Events.
If, upon any such consolidation of the Company with or merger of the
Company into any other corporation, or upon any conveyance, lease or transfer
of the property of the Company as an entirety or substantially as an entirety
to any other Person, any Principal Property of the Company or of any
Subsidiary, would thereupon become subject to any Lien, then unless such Lien
could be created under the Indenture without equally and ratably securing the
Securities, the Company, prior to or simultaneously with such consolidation,
merger, conveyance, lease or transfer, will, as to such Principal Property,
secure the Securities Outstanding hereunder (together with, if the Company
shall so determine, any other Debt of the Company now existing or hereafter
created which is not subordinate to the Securities) equally and ratably with
(or prior to) the Debt which upon such consolidation, merger, conveyance, lease
or transfer is to become secured as to such Principal Property by such Lien, or
will cause such Securities to be so secured; provided that, for the purpose of
providing such equal and ratable security, the principal amount of Original
Issue Discount Securities and Indexed Securities shall mean that amount which
would at the time of making such effective provision be due and payable
pursuant to Section 502 and the terms of such Original Issue Discount
Securities and Indexed Securities upon a declaration of acceleration of the
Maturity thereof, and the extent of such equal and ratable security shall be
adjusted, to the extent permitted by law, as and when said amount changes over
time pursuant to the terms of such Original Issue Discount Securities and
Indexed Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by or
pursuant to a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company
contained herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities and any related coupons (and if
such covenants are to be for the benefit of less than all series of
Securities, stating that such covenants are being included solely for the
benefit of such series) or to surrender any right or power herein conferred
upon the Company; or
54
(3) to add any additional Events of Default (and if such Events of
Default are to be for the benefit of less than all series of Securities,
stating that such Events of Default are being included solely for the
benefit of such series); or
(4) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to
change or eliminate any restrictions on the payment of principal of or any
premium or interest on Bearer Securities, to permit Bearer Securities to be
issued in exchange for Registered Securities, to permit Bearer Securities
to be issued in exchange for Bearer Securities of other authorized
denominations or to permit or facilitate the issuance of Securities in
uncertificated form; provided that any such action shall not adversely
affect the interests of the Holders of Securities of any series or any
related coupons in any material respect; or
(5) to change or eliminate any of the provisions of this Indenture;
provided that any such change or elimination shall become effective only
when there is no Security Outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit
of such provision; or
(6) to secure the Securities pursuant to the requirements of Section
803 or otherwise; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 609(b); or
(9) to close this Indenture with respect to the authentication and
delivery of additional series of Securities, to cure any ambiguity, to
correct or supplement any provision herein which may be inconsistent with
any other provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture; provided that such
action shall not adversely affect the interests of the Holders of
Securities of any series and any related coupons in any material respect;
(10) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Sections 401, 1402 and
1403; provided that any such action shall not adversely affect the
interests of the Holders of Securities of such series and any related
coupons or any other series of Securities in any material respect; or
(11) to effect or maintain the qualification of the Indenture under
the Trust Indenture Act.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of all Outstanding Securities of any series, by Act of said
Holders delivered to the Company and the Trustee, the Company, when authorized
by or pursuant to a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture which affect such series of Securities or
55
of modifying in any manner the rights of the Holders of Securities under this
Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Security affected
thereby,
(1) change the Stated Maturity of the principal of, or any installment
of interest on, any Security or reduce the principal amount thereof or the rate
of interest thereon or any premium payable upon the redemption thereof, or
change any obligation of the Company to pay Additional Amounts contemplated by
Section 1005 (except as contemplated by Section 801(1) and permitted by Section
901(1)), or reduce the amount of the principal of an Original Issue Discount
Security that would be due and payable upon a declaration of acceleration of
the Maturity thereof pursuant to Section 502 or the amount thereof provable in
bankruptcy pursuant to Section 504, or adversely affect any right of repayment
at the option of any Holder of any Security, or change any Place of Payment
where, or the Currency in which, any Security or any premium or the interest
thereon is payable, or impair the right to institute suit for the enforcement
of any such payment on or after the Stated Maturity thereof (or, in the case of
redemption or repayment at the option of the Holder, on or after the Redemption
Date or Repayment Date, as the case may be), or adversely affect any right to
convert or manage any Security as may be provided pursuant to Section 301
herein, or
(2) reduce the percent in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, for any waiver of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences provided for in this Indenture, or reduce the requirements of
Section 1504 for quorum or voting.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series. Any such
supplemental indenture adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture, or modifying in any manner
the rights of the Holders of Securities of such series, shall not affect the
rights under this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
56
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every
Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
SECTION 907. Notice of Supplemental Indentures.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 902, the Company
shall give notice thereof to the Holders of each Outstanding Security affected,
in the manner provided for in Section 106, setting forth in general terms the
substance of such supplemental indenture.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, and Interest.
The Company covenants and agrees for the benefit of the Holders of
each series of Securities and any related coupons that it will duly and
punctually pay the principal of (and premium, if any, on) and interest on the
Securities of that series in accordance with the terms of the Securities, any
coupons appertaining thereto and this Indenture. Unless otherwise specified as
contemplated by Section 301 with respect to any series of Securities, any
interest installments due on Bearer Securities on or before Maturity shall be
payable only upon presentation and surrender of the several coupons for such
interest installments as are evidenced thereby as they severally mature.
SECTION 1002. Maintenance of Office or Agency.
If the Securities of a series are issuable only as Registered
Securities, the Company will maintain in each Place of Payment for any series
of Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange, where Securities of that
series that are convertible may be
57
surrendered for conversion, if applicable, and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served.
If Securities of a series are issuable as Bearer Securities, the
Company will maintain (A) in The City of New York, an office or agency where
any Registered Securities of that series may be presented or surrendered for
payment, where any Registered Securities of that series may be surrendered for
registration of transfer, where Securities of that series may be surrendered
for exchange, where notices and demands to or upon the Company in respect of
the Securities of that series and this Indenture may be served and where Bearer
Securities of that series and related coupons may be presented or surrendered
for payment in the circumstances described in the following paragraph (and not
otherwise); (B) subject to any laws or regulations applicable thereto, in a
Place of Payment for that series which is located outside the United States, an
office or agency where Securities of that series and related coupons may be
presented and surrendered for payment; provided, however, that, if the
Securities of that series are listed on any stock exchange located outside the
United States and such stock exchange shall so require, the Company will
maintain a Paying Agent for the Securities of that series in any required city
located outside the United States so long as the Securities of that series are
listed on such exchange, and (C) subject to any laws or regulations applicable
thereto, in a Place of Payment for that series located outside the United
States an office or agency where any Registered Securities of that series may
be surrendered for registration of transfer, where Securities of that series
may be surrendered for exchange and where notices and demands to or upon the
Company in respect of the Securities of that series and this Indenture may be
served.
The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, except that Bearer Securities of any series and the
related coupons may be presented and surrendered for payment at the offices
specified in the Security, in London, and the Company hereby appoints the same
as its agents to receive such respective presentations, surrenders, notices and
demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, no payment of principal, premium or interest on Bearer Securities
shall be made at any office or agency of the Company in the United States or by
check mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States; provided, however, that,
if the Securities of a series are payable in Dollars, payment of principal of
(and premium, if any, on) and interest on any Bearer Security shall be made at
the office of the Company's Paying Agent in The City of New York, if (but only
if) payment in Dollars of the full amount of such principal, premium or
interest, as the case may be, at all offices or agencies outside the United
States maintained for the purpose by the Company in accordance with this
Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
any such designation; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in accordance with the requirements set forth above for Securities of
any series for such purposes. The Company will give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency. Unless otherwise specified with
respect to any Securities as contemplated by Section 301 with respect to a
series of Securities, the Company hereby
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designates as a Place of Payment for each series of Securities the office or
agency of the Trustee in the Borough of Manhattan, The City of New York, and
initially appoints the Trustee, as Paying Agent in such city as its agent to
receive all such presentations, surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, if and so long as the Securities of any series (i) are denominated
in a Currency other than Dollars or (ii) may be payable in a Currency other
than Dollars, or so long as it is required under any other provision of the
Indenture, then the Company will maintain with respect to each such series of
Securities, or as so required, at least one Exchange Rate Agent.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities and any related coupons, it will, on or
before each due date of the principal of (and premium, if any, on) or interest
on any of the Securities of that series, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum in the Currency in which the
Securities of such series are payable (except as otherwise specified pursuant
to Section 301 for the Securities of such series and except, if applicable, as
provided in Sections 312(b), 312(d) and 312(e)) sufficient to pay the principal
(and premium, if any) or interest so becoming due until such sums shall be paid
to such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities and any related coupons, it will, prior to or on each due
date of the principal of (and premium, if any, on) or interest on any
Securities of that series, deposit with a Paying Agent a sum (in the Currency
described in the preceding paragraph) sufficient to pay the principal (and
premium, if any) or interest so becoming due, such sum to be held in trust for
the benefit of the Persons entitled to such principal, premium or interest, and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
The Company will cause each Paying Agent (other than the Trustee) for
any series of Securities to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any, on) and interest on Securities of such series in trust for
the benefit of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of such series) in the making of any
payment of principal of (or premium, if any, on) or interest on the
Securities of such series; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which sums were held by the Company
or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all
59
further liability with respect to such sums.
Except as provided in the Securities of any series, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of (and premium, if any, on) or interest
on any Security of any series, or any coupon appertaining thereto, and
remaining unclaimed for two years after such principal (and premium, if any) or
interest has become due and payable shall be paid to the Company on Company
Request, or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Security or coupon shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once, in an Authorized Newspaper, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
SECTION 1004. Statement as to Compliance.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year, a brief certificate from the principal executive officer,
principal financial officer or principal accounting officer as to his or her
knowledge of the Company's compliance with all conditions and covenants under
this Indenture. For purposes of this Section 1004, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
SECTION 1005. Additional Amounts.
If any Securities of a series provide for the payment of additional
amounts to any Holder who is not a United States person in respect of any tax,
assessment or governmental charge ("Additional Amounts"), the Company will pay
to the Holder of any Security of such series or any coupon appertaining thereto
such Additional Amounts as may be specified as contemplated by Section 301.
Whenever in this Indenture there is mentioned, in any context, the payment of
the principal (or premium, if any, on) or interest on, or in respect of, any
Security of a series or payment of any related coupon or the net proceeds
received on the sale or exchange of any Security of a series, such mention
shall be deemed to include mention of the payment of Additional Amounts
provided for by the terms of such series established pursuant to Section 301 to
the extent that, in such context, Additional Amounts are, were or would be
payable in respect thereof pursuant to such terms and express mention of the
payment of Additional Amounts (if applicable) in any provisions hereof shall
not be construed as excluding Additional Amounts in those provisions hereof
where such express mention is not made.
Except as otherwise specified as contemplated by Section 301, if the
Securities of a series provide for the payment of Additional Amounts, at least
10 days prior to the first Interest Payment Date with respect to that series of
Securities (or if the Securities of that series will not bear interest prior to
Maturity, the first day on which a payment of principal (and premium, if any)
is made), and at least 10 days prior to each date of payment of principal (and
premium, if any) or interest if there has been any change with respect to the
matters set forth in the below-mentioned Officers' Certificate, the Company
will furnish the Trustee and the Company's principal Paying Agent or Paying
Agents, if other than the Trustee, with an Officers' Certificate instructing
the Trustee and such Paying Agent or Paying Agents whether such payment of
principal of (and premium, if any, on) or interest on the Securities of that
series shall be made to Holders of Securities of that series or any related
coupons who are not United States
60
persons without withholding for or on account of any tax, assessment or other
governmental charge described in the Securities of the series. If any such
withholding shall be required, then such Officers' Certificate shall specify by
country the amount, if any, required to be withheld on such payments to such
Holders of Securities of that series or related coupons and the Company will
pay to the Trustee or such Paying Agent the Additional Amounts required by the
terms of such Securities. In the event that the Trustee or any Paying Agent, as
the case may be, shall not so receive the above-mentioned certificate, then the
Trustee or such Paying Agent shall be entitled to (i) assume that no such
withholding or deduction is required with respect to any payment of principal
(and premium, if any) or interest with respect to any Securities of a series or
related coupons until it shall have received a certificate advising otherwise
and (ii) to make all payments of principal (and premium, if any) and interest
with respect to the Securities of a series or related coupons without
withholding or deductions until otherwise advised. The Company covenants to
indemnify the Trustee and any Paying Agent for, and to hold them harmless
against, any loss, liability or expense reasonably incurred without negligence
or bad faith on their part arising out of or in connection with actions taken
or omitted by any of them in reliance on any Officers' Certificate furnished
pursuant to this Section.
SECTION 1006. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all material taxes, assessments
and governmental charges levied or imposed upon the Company or any Subsidiary
or upon the income, profits or property of the Company or any Subsidiary, and
(2) all material lawful claims for labor, materials and supplies which, if
unpaid, might by law become a Lien upon any Principal Property of the Company
or any Subsidiary; provided, however, that the Company shall not be required to
pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings.
SECTION 1007. Corporate Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the rights (charter and statutory) and franchises of the Company
and any Subsidiary; provided, however, that the Company shall not be required
to preserve any such right or franchise if the Company shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries as a whole and provided further that the
foregoing does not prohibit any mergers or consolidations between Subsidiaries
or between the Company and one or more Subsidiaries so long as any such merger
or consolidation complies with Article Eight.
SECTION 1008. Waiver of Certain Covenants.
The Company may, with respect to any series of Securities, omit in any
particular instance to comply with any term, provision or condition which
affects such series set forth in Section 803 or Sections 1006 to 1007,
inclusive, if before the time for such compliance the Holders of at least a
majority in principal amount of all Outstanding Securities of any series, by
Act of such Holders, waive such compliance in such instance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until
such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.
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ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with the terms of such Securities
and (except as otherwise specified as contemplated by Section 301 for
Securities of any series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by or pursuant to a Board Resolution. In case of any redemption at
the election of the Company, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Securities of such series to be redeemed and shall
deliver to the Trustee such documentation and records as shall enable the
Trustee to select the Securities to be redeemed pursuant to Section 1103. In
the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions of the principal of Securities of such series; provided,
however, that no such partial redemption shall reduce the portion of the
principal amount of a Security not redeemed to less than the minimum authorized
denomination for Securities of such series established pursuant to Section 301.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
SECTION 1104. Notice of Redemption.
Except as otherwise specified as contemplated by Section 301, notice
of redemption shall be given in the manner provided for in Section 106 not less
than 30 nor more than 60 days prior to the Redemption Date, to each Holder of
Securities to be redeemed.
All notices of redemption shall state:
62
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series are
to be redeemed, the identification (and, in the case of partial
redemption, the principal amounts) of the particular Securities to be
redeemed,
(4) that on the Redemption Date the Redemption Price (together
with accrued interest, if any, to the Redemption Date payable as
provided in Section 1106) will become due and payable upon each such
Security, or the portion thereof, to be redeemed and, if applicable,
that interest thereon will cease to accrue on and after said date,
(5) the place or places where such Securities, together in the
case of Bearer Securities with all coupons appertaining thereto, if
any, maturing after the Redemption Date, are to be surrendered for
payment of the Redemption Price,
(6) that the redemption is for a sinking fund, if such is the
case,
(7) that, unless otherwise specified in such notice, Bearer
Securities of any series, if any, surrendered for redemption must be
accompanied by all coupons maturing subsequent to the Redemption Date
or the amount of any such missing coupon or coupons will be deducted
from the Redemption Price unless security or indemnity satisfactory to
the Company, the Trustee and any Paying Agent is furnished, and
(8) if Bearer Securities of any series are to be redeemed and any
Registered Securities of such series are not to be redeemed, and if
such Bearer Securities may be exchanged for Registered Securities not
subject to redemption on such Redemption Date pursuant to Section 305
or otherwise, the last date, as determined by the Company, on which
such exchanges may be made.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money in the Currency in which the Securities of such series are payable
(except as otherwise specified pursuant to Section 301 for the Securities of
such series and except, if applicable, as provided in Sections 312(b), 312(d)
and 312(e)) sufficient to pay the Redemption Price of, and accrued interest on,
all the Securities which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified in the Currency in which the Securities of
such series are payable (except as otherwise specified pursuant to
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Section 301 for the Securities of such series and except, if applicable, as
provided in Sections 312(b), 312(d) and 312(e)) (together with accrued
interest, if any, to the Redemption Date), and from and after such date (unless
the Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall, if the same were interest-bearing, cease to
bear interest and the coupons for such interest appertaining to any Bearer
Securities so to be redeemed, except to the extent provided below, shall be
void. Upon surrender of any such Security for redemption in accordance with
said notice, together with all coupons, if any, appertaining thereto maturing
after the Redemption Date, such Security shall be paid by the Company at the
Redemption Price, together with accrued interest, if any, to the Redemption
Date; provided, however, that installments of interest on Bearer Securities
whose Stated Maturity is on or prior to the Redemption Date shall be payable
only at an office or agency located outside the United States (except as
otherwise provided in Section 1002) and, unless otherwise specified as
contemplated by Section 301, only upon presentation and surrender of coupons
for such interest, and provided further that installments of interest on
Registered Securities whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
307.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such
missing coupon or coupons may be waived by the Company and the Trustee if there
be furnished to them such security or indemnity as they may require to save
each of them and any Paying Agent harmless. If thereafter the Holder of such
Security shall surrender to the Trustee or any Paying Agent any such missing
coupon in respect of which a deduction shall have been made from the Redemption
Price, such Holder shall be entitled to receive the amount so deducted;
provided, however, that interest represented by coupons shall be payable only
at an office or agency located outside the United States (except as otherwise
provided in Section 1002) and, unless otherwise specified as contemplated by
Section 301, only upon presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate of interest or
Yield to Maturity (in the case of Original Issue Discount Securities) set forth
in the Security.
SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part (pursuant to the
provisions of this Article or of Article Twelve) shall be surrendered at a
Place of Payment therefor (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities of the same series, of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
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ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
Retirements of Securities of any series pursuant to any sinking fund
shall be made in accordance with the terms of such Securities and (except as
otherwise specified as contemplated by Section 301 for Securities of any
series) in accordance with this Article.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Securities of any
series, the cash amount of any mandatory sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
Subject to Section 1203, in lieu of making all or any part of any
mandatory sinking fund payment with respect to any Securities of a series in
cash, the Company may at its option (1) deliver to the Trustee Outstanding
Securities of a series (other than any previously called for redemption)
theretofore purchased or otherwise acquired by the Company together in the case
of any Bearer Securities of such series with all unmatured coupons appertaining
thereto, and/or (2) receive credit for the principal amount of Securities of
such series which have been previously delivered to the Trustee by the Company
or for Securities of such series which have been redeemed either at the
election of the Company pursuant to the terms of such Securities or through the
application of permitted optional sinking fund payments pursuant to the terms
of such Securities, in each case in satisfaction of all or any part of any
mandatory sinking fund payment with respect to the Securities of the same
series required to be made pursuant to the terms of such Securities as provided
for by the terms of such series; provided, however, that such Securities have
not been previously so credited. Such Securities shall be received and credited
for such purpose by the Trustee at the Redemption Price specified in such
Securities for redemption through operation of the sinking fund and the amount
of such mandatory sinking fund payment shall be reduced accordingly.
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SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash in the Currency in which the
Securities of such series are payable (except as otherwise specified pursuant
to Section 301 for the Securities of such series and except, if applicable, as
provided in Sections 312(b), 312(d) and 312(e)) and the portion thereof, if
any, which is to be satisfied by delivering or crediting Securities of that
series pursuant to Section 1202 (which Securities will, if not previously
delivered, accompany such certificate) and whether the Company intends to
exercise its right to make a permitted optional sinking fund payment with
respect to such series. Such certificate shall be irrevocable and upon its
delivery the Company shall be obligated to make the cash payment or payments
therein referred to, if any, on or before the next succeeding sinking fund
payment date. In the case of the failure of the Company to deliver such
certificate, the sinking fund payment due on the next succeeding sinking fund
payment date for that series shall be paid entirely in cash and shall be
sufficient to redeem the principal amount of such Securities subject to a
mandatory sinking fund payment without the option to deliver or credit
Securities as provided in Section 1202 and without the right to make any
optional sinking fund payment, if any, with respect to such series.
Not more than 60 days before each such sinking fund payment date the
Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 1103 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1106 and 1107.
Prior to any sinking fund payment date, the Company shall pay to the
Trustee or a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) in cash a sum
equal to any interest that will accrue to the date fixed for redemption of
Securities or portions thereof to be redeemed on such sinking fund payment date
pursuant to this Section 1203.
Notwithstanding the foregoing, with respect to a sinking fund for any
series of Securities, if at any time the amount of cash to be paid into such
sinking fund on the next succeeding sinking fund payment date, together with
any unused balance of any preceding sinking fund payment or payments for such
series, does not exceed in the aggregate $100,000, the Trustee, unless
requested by the Company, shall not give the next succeeding notice of the
redemption of Securities of such series through the operation of the sinking
fund. Any such unused balance of moneys deposited in such sinking fund shall be
added to the sinking fund payment for such series to be made in cash on the
next succeeding sinking fund payment date or, at the request of the Company,
shall be applied at any time or from time to time to the purchase of Securities
of such series, by public or private purchase, in the open market or otherwise,
at a purchase price for such Securities (excluding accrued interest and
brokerage commissions, for which the Trustee or any Paying Agent will be
reimbursed by the Company) not in excess of the principal amount thereof.
ARTICLE THIRTEEN
REPAYMENT AT OPTION OF HOLDERS
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SECTION 1301. Applicability of Article.
Repayment of Securities of any series before their Stated Maturity at
the option of Holders thereof shall be made in accordance with the terms of
such Securities and (except as otherwise specified as contemplated by Section
301 for Securities of any series) in accordance with this Article.
SECTION 1302. Repayment of Securities.
Securities of any series subject to repayment in whole or in part at
the option of the Holders thereof will, unless otherwise provided in the terms
of such Securities, be repaid at a price equal to the principal amount thereof,
together with interest, if any, thereon accrued to the Repayment Date specified
in or pursuant to the terms of such Securities. The Company covenants that on
or before the Repayment Date it will deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 1003) an amount of money in the Currency in
which the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series and except, if
applicable, as provided in Sections 312(b), 312(d) and 312(e)) sufficient to
pay the principal (or, if so provided by the terms of the Securities of any
series, a percentage of the principal) of, and (except if the Repayment Date
shall be an Interest Payment Date) accrued interest on, all the Securities or
portions thereof, as the case may be, to be repaid on such date.
SECTION 1303. Exercise of Option.
Securities of any series subject to repayment at the option of the
Holders thereof will contain an "Option to Elect Repayment" form on the reverse
of such Securities. To be repaid at the option of the Holder, any Security so
providing for such repayment, with the "Option to Elect Repayment" form on the
reverse of such Security duly completed by the Holder (or by the Holder's
attorney duly authorized in writing), must be received by the Company at the
Place of Payment therefor specified in the terms of such Security (or at such
other place or places of which the Company shall from time to time notify the
Holders of such Securities) not earlier than 45 days nor later than 30 days
prior to the Repayment Date. If less than the entire principal amount of such
Security is to be repaid in accordance with the terms of such Security, the
principal amount of such Security to be repaid, in increments of the minimum
denomination for Securities of such series, and the denomination or
denominations of the Security or Securities to be issued to the Holder for the
portion of the principal amount of such Security surrendered that is not to be
repaid, must be specified. The principal amount of any Security providing for
repayment at the option of the Holder thereof may not be repaid in part if,
following such repayment, the unpaid principal amount of such Security would be
less than the minimum authorized denomination of Securities of the series of
which such Security to be repaid is a part. Except as otherwise may be provided
by the terms of any Security providing for repayment at the option of the
Holder thereof, exercise of the repayment option by the Holder shall be
irrevocable unless waived by the Company.
SECTION 1304. When Securities Presented for Repayment Become Due and
Payable.
If Securities of any series providing for repayment at the option of
the Holders thereof shall have been surrendered as provided in this Article and
as provided by or pursuant to the terms of such Securities, such Securities or
the portions thereof, as the case may be, to be repaid shall become due and
payable and shall be paid by the Company on the Repayment Date therein
specified, and on and after such Repayment Date (unless the Company shall
default in the payment of such Securities on such Repayment Date) such
Securities shall, if the same were interest-bearing, cease to bear interest and
the coupons for
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such interest appertaining to any Bearer Securities so to be repaid, except to
the extent provided below, shall be void. Upon surrender of any such Security
for repayment in accordance with such provisions, together with all coupons, if
any, appertaining thereto maturing after the Repayment Date, the principal
amount of such Security so to be repaid shall be paid by the Company, together
with accrued interest, if any, to the Repayment Date; provided, however, that
coupons whose Stated Maturity is on or prior to the Repayment Date shall be
payable only at an office or agency located outside the United States (except
as otherwise provided in Section 1002) and, unless otherwise specified pursuant
to Section 301, only upon presentation and surrender of such coupons, and
provided further that, in the case of Registered Securities, installments of
interest, if any, whose Stated Maturity is on or prior to the Repayment Date
shall be payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 307.
If any Bearer Security surrendered for repayment shall not be
accompanied by all appurtenant coupons maturing after the Repayment Date, such
Security may be paid after deducting from the amount payable therefor as
provided in Section 1302 an amount equal to the face amount of all such missing
coupons, or the surrender of such missing coupon or coupons may be waived by
the Company and the Trustee if there be furnished to them such security or
indemnity as they may require to save each of them and any Paying Agent
harmless. If thereafter the Holder of such Security shall surrender to the
Trustee or any Paying Agent any such missing coupon in respect of which a
deduction shall have been made as provided in the preceding sentence, such
Holder shall be entitled to receive the amount so deducted; provided, however,
that interest represented by coupons shall be payable only at an office or
agency located outside the United States (except as otherwise provided in
Section 1002) and, unless otherwise specified as contemplated by Section 301,
only upon presentation and surrender of those coupons.
If the principal amount of any Security surrendered for repayment
shall not be so repaid upon surrender thereof, such principal amount (together
with interest, if any, thereon accrued to such Repayment Date) shall, until
paid, bear interest from the Repayment Date at the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) set forth in such
Security.
SECTION 1305. Securities Repaid in Part.
Upon surrender of any Registered Security which is to be repaid in
part only, the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Security, without service charge and at the
expense of the Company, a new Registered Security or Securities of the same
series, of any authorized denomination specified by the Holder, in an aggregate
principal amount equal to and in exchange for the portion of the principal of
such Security so surrendered which is not to be repaid.
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Company's Option to Effect Defeasance or Covenant
Defeasance.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, the provisions of this Article Fourteen shall apply
to each series of Securities, and the Company may, at its option, effect
defeasance of the Securities of or within a series under Section 1402, or
covenant defeasance of or within a series under Section 1403 in accordance with
the terms of such Securities and in accordance with this Article.
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SECTION 1402. Defeasance and Discharge.
Upon the Company's exercise of the above option applicable to this
Section with respect to any Securities of or within a series, the Company shall
be deemed to have been discharged from its obligations with respect to such
Outstanding Securities and any related coupons on the date the conditions set
forth in Section 1404 are satisfied (hereinafter, "defeasance"). For this
purpose, such defeasance means that the Company shall be deemed to have paid
and discharged the entire indebtedness represented by such Outstanding
Securities and any related coupons, which shall thereafter be deemed to be
"Outstanding" only for the purposes of Section 1405 and the other Sections of
this Indenture referred to in (A) and (B) below, and to have satisfied all its
other obligations under such Securities and any related coupons and this
Indenture insofar as such Securities and any related coupons are concerned (and
the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder: (A) the rights of Holders of such
Outstanding Securities and any related coupons (i) to receive, solely from the
trust fund described in Section 1404 and as more fully set forth in such
Section, payments in respect of the principal of (and premium, if any, on) and
interest on such Securities and any related coupons when such payments are due,
and (ii) to receive shares of common stock or other Securities from the Company
upon the conversion of any convertible securities issued hereunder, (B) the
Company's obligations with respect to such Securities under Sections 304, 305,
306, 1002 and 1003 and with respect to the payment of Additional Amounts, if
any, on such Securities as contemplated by Section 1005, (C) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and (D) this
Article Fourteen. Subject to compliance with this Article Fourteen, the Company
may exercise its option under this Section 1402 notwithstanding the prior
exercise of its option under Section 1403 with respect to such Securities and
any related coupons.
SECTION 1403. Covenant Defeasance.
Upon the Company's exercise of the above option applicable to this
Section with respect to any Securities of or within a series, the Company shall
be released from its obligations under Section 803 and Sections 1006 through
1008, and, if specified pursuant to Section 301, its obligations under any
other covenant, with respect to such Outstanding Securities and any related
coupons on and after the date the conditions set forth in Section 1404 are
satisfied (hereinafter, "covenant defeasance"), and such Securities and any
related coupons shall thereafter be deemed not to be "Outstanding" for the
purposes of any direction, waiver, consent or declaration or Act of Holders
(and the consequences of any thereof) in connection with such covenants, but
shall continue to be deemed "Outstanding" for all other purposes hereunder. For
this purpose, such covenant defeasance means that, with respect to such
Outstanding Securities and any related coupons, the Company may omit to comply
with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
reference in any such covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a Default or an Event
of Default under Section 501(4) or Section 501(8) or otherwise, as the case may
be, but, except as specified above, the remainder of this Indenture and such
Securities and any related coupons shall be unaffected thereby.
SECTION 1404. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section
1402 or Section 1403 to any Outstanding Securities of or within a series and
any related coupons:
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(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 607 who shall agree to comply with the provisions of this
Article Fourteen applicable to it) in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated
solely to, the benefit of the Holders of such Securities and any related
coupons, (A) money in an amount (in such Currency in which such Securities
and any related coupons are then specified as payable at Stated Maturity),
or (B) Government Obligations applicable to such Securities (determined on
the basis of the Currency in which such Securities are then specified as
payable at Stated Maturity) which through the scheduled payment of
principal and interest in respect thereof in accordance with their terms
will provide, not later than one day before the due date of any payment of
principal (including any premium) and interest, if any, under such
Securities and any related coupons, money in an amount, or (C) a
combination thereof, sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, and which shall be
applied by the Trustee (or other qualifying trustee) to pay and discharge,
(i) the principal of (and premium, if any, on) and interest on such
Outstanding Securities and any related coupons on the Stated Maturity (or
Redemption Date, if applicable) of such principal (and premium, if any) or
installment or interest and (ii) any mandatory sinking fund payments or
analogous payments applicable to such Outstanding Securities and any
related coupons on the day on which such payments are due and payable in
accordance with the terms of this Indenture and of such Securities and any
related coupons; provided that the Trustee shall have been irrevocably
instructed to apply such money or the proceeds of such Government
Obligations to said payments with respect to such Securities and any
related coupons. Before such a deposit, the Company may give to the
Trustee, in accordance with Section 1102 hereof, a notice of its election
to redeem all or any portion of such Outstanding Securities at a future
date in accordance with the terms of the Securities of such series and
Article Eleven hereof, which notice shall be irrevocable. Such irrevocable
redemption notice, if given, shall be given effect in applying the
foregoing.
(2) No Default or Event of Default with respect to such Securities or
any related coupons shall have occurred and be continuing on the date of
such deposit or, insofar as paragraphs (5) and (6) of Section 501 are
concerned, at any time during the period ending on the 91st day after the
date of such deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period).
(3) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any other material agreement or instrument to which the Company is a party
or by which it is bound.
(4) In the case of an election under Section 1402, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (x) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (y) since the date of execution of this
Indenture, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such opinion
shall confirm that, the Holders of such Outstanding Securities and any
related coupons will not recognize income, gain or loss for federal income
tax purposes as a result of such defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such defeasance had not occurred.
(5) In the case of an election under Section 1403, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such Outstanding Securities and
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any related coupons will not recognize income, gain or loss for
federal income tax purposes as a result of such covenant defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such covenant
defeasance had not occurred.
(6) Notwithstanding any other provisions of this Section, such
defeasance or covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations in connection
therewith pursuant to Section 301.
(7) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section 1402
or the covenant defeasance under Section 1403 (as the case may be) have
been complied with.
SECTION 1405. Deposited Money and Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all
money and Government Obligations (or other property as may be provided pursuant
to Section 301) (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee--collectively for purposes of this Section 1405, the
"Trustee") pursuant to Section 1404 in respect of such Outstanding Securities
and any related coupons shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and any related coupons and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities and any related coupons of all
sums due and to become due thereon in respect of principal (and premium, if
any) and interest, but such money need not be segregated from other funds
except to the extent required by law.
Unless otherwise specified with respect to any Security pursuant to
Section 301, if, after a deposit referred to in Section 1404(1) has been made,
(a) the Holder of a Security in respect of which such deposit was made is
entitled to, and does, elect pursuant to Section 312(b) or the terms of such
Security to receive payment in a Currency other than that in which the deposit
pursuant to Section 1404(1) has been made in respect of such Security, or (b) a
Conversion Event occurs as contemplated in Section 312(d) or 312(e) or by the
terms of any Security in respect of which the deposit pursuant to Section
1404(1) has been made, the indebtedness represented by such Security and any
related coupons shall be deemed to have been, and will be, fully discharged and
satisfied through the payment of the principal of (premium, if any, on), and
interest, if any, on such Security as they become due out of the proceeds
yielded by converting (from time to time as specified below in the case of any
such election) the amount or other property deposited in respect of such
Security into the Currency in which such Security becomes payable as a result
of such election or Conversion Event based on the applicable Market Exchange
Rate for such Currency in effect on the third Business Day prior to each
payment date, except, with respect to a Conversion Event, for such Currency in
effect (as nearly as feasible) at the time of the Conversion Event.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the Government Obligations
deposited pursuant to Section 1404 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of such Outstanding Securities and any related
coupons.
Anything in this Article Fourteen to the contrary notwithstanding, the
Trustee shall deliver
71
or pay to the Company from time to time upon Company Request any money or
Government Obligations (or other property and any proceeds therefrom) held by
it as provided in Section 1404 which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, are in excess of the amount thereof which
would then be required to be deposited to effect an equivalent defeasance or
covenant defeasance, as applicable, in accordance with this Article.
SECTION 1406. Reinstatement.
If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 1405 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and such
Securities and any related coupons shall be revived and reinstated as though no
deposit had occurred pursuant to Section 1402 or 1403, as the case may be,
until such time as the Trustee or Paying Agent is permitted to apply all such
money in accordance with Section 1405; provided, however, that if the Company
makes any payment of principal of (or premium, if any, on) or interest on any
such Security or any related coupon following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities and any related coupons to receive such payment from the money
held by the Trustee or Paying Agent.
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called.
If Securities of a series are issuable as Bearer Securities, a meeting
of Holders of Securities of such series may be called at any time and from time
to time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series.
SECTION 1502. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of
Securities of any series for any purpose specified in Section 1501, to be held
at such time and at such place in The City of New York or in London as the
Trustee shall determine. Notice of every meeting of Holders of Securities of
any series, setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be given, in the
manner provided for in Section 106, not less than 21 nor more than 180 days
prior to the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board Resolution,
or the Holders of at least 10% in principal amount of the Outstanding
Securities of any series shall have requested the Trustee to call a meeting of
the Holders of Securities of such series for any purpose specified in Section
1501, by written request setting forth in reasonable detail the action proposed
to be taken at the meeting, and the Trustee shall not have made the first
publication of the notice of such meeting within 21 days after receipt of such
request or shall not thereafter proceed to cause the meeting to be held as
provided herein, then the Company or the Holders of Securities of such series
in the amount above specified, as the case may be, may determine the time and
the place in The City of New York or in London for such meeting and may call
such meeting for such purposes by giving notice thereof as
72
provided in paragraph (a) of this Section.
SECTION 1503. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Securities of
such series, or (2) a Person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more Outstanding Securities of such series by
such Holder or Holders. The only Persons who shall be entitled to be present or
to speak at any meeting of Holders of Securities of any series shall be the
Person entitled to vote at such meeting and their counsel, any representatives
of the Trustee and its counsel and any representatives of the Company and its
counsel.
SECTION 1504. Quorum; Action.
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series; provided, however, that, if any action is
to be taken at such meeting with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of not less than a
specified percentage in principal amount of the Outstanding Securities of a
series, the Persons entitled to vote such specified percentage in principal
amount of the Outstanding Securities of such series shall constitute a quorum.
In the absence of a quorum within 30 minutes of the time appointed for any such
meeting, the meeting shall, if convened at the request of Holders of Securities
of such series, be dissolved. In any other case the meeting may be adjourned
for a period of not less than 10 days as determined by the chairman of the
meeting prior to the adjournment of such meeting. In the absence of a quorum at
any such adjourned meeting, such adjourned meeting may be further adjourned for
a period of not less than 10 days as determined by the chairman of the meeting
prior to the adjournment of such adjourned meeting. Notice of the reconvening
of any adjourned meeting shall be given as provided in Section 1502(a), except
that such notice need be given only once not less than five days prior to the
date on which the meeting is scheduled to be reconvened. Notice of the
reconvening of any adjourned meeting shall state expressly the percentage, as
provided above, of the principal amount of the Outstanding Securities of such
series which shall constitute a quorum.
Subject to the foregoing, at the reconvening of any meeting adjourned
for lack of a quorum the Persons entitled to vote 25% in principal amount of
the Outstanding Securities at the time shall constitute a quorum for the taking
of any action set forth in the notice of the original meeting.
Except as limited by the proviso to Section 902, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum
is present as aforesaid may be adopted by the affirmative vote of the Holders
of not less than a majority in principal amount of the Outstanding Securities
of that series; provided, however, that, except as limited by the proviso to
Section 902, any resolution with respect to any request, demand, authorization,
direction, notice, consent, waiver or other action which this Indenture
expressly provides may be made, given or taken by the Holders of a specified
percentage, which is less than a majority, in principal amount of the
Outstanding Securities of a series may be adopted at a meeting or an adjourned
meeting duly reconvened and at which a quorum is present as aforesaid by the
affirmative vote of the Holders of not less than such specified percentage in
principal amount of the Outstanding Securities of that series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series
73
and the related coupons, whether or not present or represented at the meeting.
Notwithstanding the foregoing provisions of this Section 1504, if any
action is to be taken at a meeting of Holders of Securities of any series with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that this Indenture expressly provides may be made,
given or taken by the Holders of a specified percentage in principal amount of
all Outstanding Securities affected thereby, or of the Holders of such series
and one or more additional series:
(i) there shall be no minimum quorum requirement for such meeting; and
(ii) the principal amount of the Outstanding Securities of such series
that vote in favor of such request, demand, authorization, direction,
notice, consent, waiver or other action shall be taken into account in
determining whether such request, demand, authorization, direction, notice,
consent, waiver or other action has been made, given or taken under this
Indenture.
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment
of Meetings.
(a) Notwithstanding any provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities of a series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard to
the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as its shall deem
appropriate. Except as otherwise permitted or required by any such regulations,
the holding of Securities shall be proved in the manner specified in Section
104 and the appointment of any proxy shall be proved in the manner specified in
Section 104 or by having the signature of the person executing the proxy
witnessed or guaranteed by any trust company, bank or banker authorized by
Section 104 to certify to the holding of Bearer Securities. Such regulations
may provide that written instruments appointing proxies, regular on their face,
may be presumed valid and genuine without the proof specified in Section 104 or
other proof.
(b) The Trustee shall, by an instrument in writing appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 1502(b), in which
case the Company or the Holders of Securities of the series calling the
meeting, as the case may be, shall in like manner appoint a temporary chairman.
A permanent chairman and a permanent secretary of the meeting shall be elected
by vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series or proxy
shall be entitled to one vote for each $1,000 principal amount of Outstanding
Securities of such series held or represented by him (determined as specified
in the definition of "Outstanding" in Section 101); provided, however, that no
vote shall be cast or counted at any meeting in respect of any Security
challenged as not Outstanding and ruled by the chairman of the meeting to be
not Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of a Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1502 at which a quorum is present may be adjourned from
time to time by Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.
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SECTION 1506. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the Secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1502 and, if
applicable, Section 1504. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
This Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Indenture.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
CENDANT CORPORATION
By: /s/ James E. Buckman
-------------------------------
Name: James E. Buckman
Title: Senior Executive Vice
President and General
Counsel
[Seal]
Attest:
THE BANK OF NOVA SCOTIA TRUST
COMPANY OF NEW YORK
Trustee
By: /s/ Warren A. Goshine
-------------------------------
Name: Warren A. Goshine
Title: Secretary/Trust Officer
[Seal]
Attest:
76
EXHIBIT A-1
FORM OF CERTIFICATE TO BE GIVEN BY
PERSON ENTITLED TO RECEIVE BEARER SECURITY
OR TO OBTAIN INTEREST PAYABLE PRIOR
TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description
of Securities to be delivered]
This is to certify that as of the date hereof, and except as set forth
below, the above-captioned Securities held by you for our account (i) are owned
by person(s) that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States federal income taxation regardless of its source
("United States persons(s)"), (ii) are owned by United States person(s) that
are (a) foreign branches of United States financial institutions (financial
institutions, as defined in United States Treasury Regulations Section
2.165-12(c)(1)(v) are herein referred to as "financial institutions")
purchasing for their own account or for resale, or (b) United States person(s)
who acquired the Securities through foreign branches of United States financial
institutions and who hold the Securities through such United States financial
institutions on the date hereof (and in either case (a) or (b), each such
United States financial institution hereby agrees, on its own behalf or through
its agent, that you may advise [Name of Issuer] or its agent that such
financial institution will comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the United States Internal Revenue Code of 1986, as
amended, and the regulations thereunder), or (iii) are owned by United States
or foreign financial institution(s) for purposes of resale during the
restricted period (as defined in United States Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)), and, in addition, if the owner is a United States or
foreign financial institution described in clause (iii) above (whether or not
also described in clause (i) or (ii)), this is to further certify that such
financial institution has not acquired the Securities for purposes of resale
directly or indirectly to a United States person or to a person within the
United States or its possessions.
As used herein, "United States" means the United States of America
(including the states and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the
above-captioned Securities held by you for our account in accordance with your
Operating Procedures if any applicable statement herein is not correct on such
date, and in the absence of any such notification it may be assumed that this
certification applies as of such date.
This certificate excepts and does not relate to [U.S.$] of such
interest in the above-captioned Securities in respect of which we are not able
to certify and as to which we understand an exchange for an interest in a
Permanent Global Security or an exchange for and delivery of definitive
Securities (or, if relevant, collection of any interest) cannot be made until
we do so certify.
We understand that this certificate may be required in connection with
certain tax legislation in the
77
United States. If administrative or legal proceedings are commenced or
threatened in connection with which this certificate is or would be relevant,
we irrevocably authorize you to produce this certificate or a copy thereof to
any interested party in such proceedings.
Dated:
[To be dated no earlier than the 15th day prior to (i) the Exchange Date or
(ii) the relevant Interest Payment Date occurring prior to the Exchange Date,
as applicable]
[Name of Person Making
Certification]
-----------------------------------
(Authorized Signatory)
Name:
Title:
78
EXHIBIT A-2
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR
AND CEDEL S.A. IN
CONNECTION WITH THE EXCHANGE OF A PORTION OF A
TEMPORARY GLOBAL SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description
of Securities to be delivered]
This is to certify that based solely on written certifications that we
have received in writing, by tested telex or by electronic transmission from
each of the persons appearing in our records as persons entitled to a portion
of the principal amount set forth below (our "Member Organizations")
substantially in the form attached hereto, as of the date hereof, [U.S.$]______
principal amount of the above-captioned Securities (i) is owned by person(s)
that are not citizens or residents of the United States, domestic partnerships,
domestic corporations or any estate or trust the income of which is subject to
United States Federal income taxation regardless of its source ("United States
person(s)"), (ii) is owned by United States person(s) that are (a) foreign
branches of United States financial institutions (financial institutions, as
defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(v) are herein
referred to as "financial institutions") purchasing for their own account or
for resale, or (b) United States person(s) who acquired the Securities through
foreign branches of United States financial institutions and who hold the
Securities through such United States financial institutions on the date hereof
(and in either case (a) or (b), each such financial institution has agreed, on
its own behalf or through its agent, that we may advise [Name of Issuer] or its
agent that such financial institution will comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as
amended, and the regulations thereunder), or (iii) is owned by United States or
foreign financial institution(s) for purposes of resale during the restricted
period (as defined in United States Treasury Regulations Section 1.163-5(c)(2)
(i)(D)(7)) and, to the further effect, that financial institutions described in
clause (iii) above (whether or not also described in clause (i) or (ii)) have
certified that they have not acquired the Securities for purposes of resale
directly or indirectly to a United States person or to a person within the
United States or its possessions.
As used herein, "United States" means the United States of America
(including the states and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We further certify that (i) we are not making available herewith for
exchange (or, if relevant, collection of any interest) any portion of the
temporary global Security representing the above-captioned Securities excepted
in the above-referenced certificates of Member Organizations and (ii) as of the
date hereof we have not received any notification from any of our Member
Organizations to the effect that the statements made by such Member
Organizations with respect to any portion of the part submitted herewith for
exchange (or, if relevant, collection of any interest) are no longer true and
cannot be relied upon as of the date hereof.
We understand that this certification is required in connection with
certain tax legislation in
79
the United States. If administrative or legal proceedings are commenced or
threatened in connection with which this certificate is or would be relevant,
we irrevocably authorize you to produce this certificate or a copy thereof to
any interested party in such proceedings.
Dated:
[To be dated no earlier than the Exchange Date or the relevant Interest Payment
Date occurring prior to the Exchange Date, as applicable]
[MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, BRUSSELS OFFICE, as Operator of
the Euroclear System] [CEDEL S.A.]
By
-------------------------------------
80
----------------------------------------------
FIRST SUPPLEMENTAL INDENTURE
Dated as of February 24, 1998
between
CENDANT CORPORATION,
AS ISSUER
and
THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK,
AS TRUSTEE
----------------------------------------------
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS..................................1
SECTION 1.1. Definition of Terms..........................................1
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES.................4
SECTION 2.1. Designation, Principal Amount and Authorized Denomination....4
SECTION 2.2. Maturity.....................................................4
SECTION 2.3. Form and Payment.............................................4
SECTION 2.4. Global Debenture.............................................4
SECTION 2.5. Interest.....................................................5
ARTICLE III
REDEMPTION OF THE DEBENTURES..........................6
SECTION 3.1. Tax Event Redemption.........................................6
SECTION 3.2. Redemption Procedure for Debentures..........................6
SECTION 3.3. No Sinking Fund..............................................7
SECTION 3.4. Option to Put Debentures.....................................7
SECTION 3.5. Repurchase Procedure for Debentures..........................7
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD......................8
SECTION 4.1. Extension of Interest Payment Period.........................8
SECTION 4.2. Notice of Extension..........................................8
SECTION 4.3. Limitation of Transactions...................................9
ARTICLE V
EXPENSES....................................9
SECTION 5.1. Payment of Expenses..........................................9
SECTION 5.2. Payment Upon Resignation or Removal..........................9
ARTICLE VI
FORM OF DEBENTURE..............................10
SECTION 6.1. Form of Debenture...........................................10
ARTICLE VII
ORIGINAL ISSUE OF DEBENTURES.........................19
SECTION 7.1. Original Issue of Debentures................................19
i
Page
ARTICLE VIII
MISCELLANEOUS................................19
SECTION 8.1. Ratification of Indenture...................................19
SECTION 8.2. Trustee Not Responsible for Recitals........................19
SECTION 8.3. Governing Law...............................................19
SECTION 8.4. Separability................................................19
SECTION 8.5. Counterparts................................................19
ii
FORM OF FIRST SUPPLEMENTAL INDENTURE, dated as of February 24, 1998
(the "First Supplemental Indenture"), between CENDANT CORPORATION, a
corporation duly organized and existing under the laws of the State of
Delaware, (the "Company"), and The Bank of Nova Scotia Trust Company of New
York, as trustee (the "Trustee").
WHEREAS, the Company executed and delivered the indenture, dated as of
February 24, 1998 (the "Base Indenture"), to the Trustee to provide for the
future issuance of the Company's Senior unsecured debentures, notes or other
evidence of indebtedness (the "Securities"), to be issued from time to time in
one or more series as might be determined by the Company under the Base
Indenture;
WHEREAS, pursuant to the terms of the Base Indenture, the Company
desires to provide for the establishment of a new series of its Securities to
be known as its 6.45% Debentures due February 16, 2003 (the "Debentures"), the
form and substance of such Debentures and the terms, provisions and conditions
thereof to be set forth as provided in the Base Indenture and this First
Supplemental Indenture (together, the "Indenture");
WHEREAS, Cendant Capital I, a Delaware statutory business trust (the
"Trust"), has offered to the public its 6.45% Trust Originated Preferred
Securities (the "Preferred Securities"), representing preferred, undivided
beneficial interests in the assets of the Trust, and proposes to invest the
proceeds from such offering, together with the proceeds of the issuance and
sale by the Trust to the Company of its 6.45% Trust Originated Common
Securities (the "Common Securities" and together with the Preferred Securities,
the "Trust Securities"), in the Debentures; and
WHEREAS, the Company has requested that the Trustee execute and
deliver this First Supplemental Indenture and all requirements necessary to
make this First Supplemental Indenture a valid instrument in accordance with
its terms, and to make the Debentures, when executed by the Company and
authenticated and delivered by the Trustee, the valid obligations of the
Company and all acts and things necessary have been done and performed to make
this First Supplemental Indenture enforceable in accordance with its terms, and
the execution and delivery of this First Supplemental Indenture has been duly
authorized in all respects:
NOW THEREFORE, in consideration of the purchase and acceptance of the
Debentures by the Holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Debentures and the
terms, provisions and conditions thereof, the Company covenants and agrees with
the Trustee as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definition of Terms.
Unless the context otherwise requires:
(a) a term defined in the Indenture has the same meaning when used in
this First Supplemental Indenture;
(b) a term defined anywhere in this First Supplemental Indenture has
the same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) headings are for convenience of reference only and do not affect
interpretation;
(e) the following terms have the meanings given to them in the
Declaration: Authorized Newspaper; Clearing Agency; Common Securities
Guarantee; Delaware Trustee; Distributions; DTC; FELINE PRIDES; Growth
PRIDES; Guarantee; Income PRIDES; Institutional Trustee; Investment Company
Event; Preferred Security Certificate; Pricing Agreement; Purchase Agreement;
Regular Trustees; Reset Agent; Reset Announcement Date; Reset Spread; Two-Year
Benchmark Treasury; and Treasury Securities.
(f) the following terms have the meanings given to them in this
Section 1.11(f):
"Applicable Principal Amount" means either (i) if the Tax Event
Redemption Date occurs prior to February 16, 2001, the aggregate principal
amount of the Debentures corresponding to the aggregate stated liquidation
amount of the Preferred Securities which are components of Income PRIDES on the
Tax Event Redemption Date or (ii) if the Tax Event Redemption occurs on or
after February 16, 2001, the aggregate principal amount of the Debentures
corresponding to the aggregate stated liquidation amount of the Preferred
Securities outstanding on such Tax Event Redemption Date.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York
or in the city in which the Corporate Trust Office is located are authorized or
obligated by law or executive order to close.
"Compounded Interest" shall have the meaning set forth in Section 4.1.
"Coupon Rate" shall have the meaning set forth in Section 2.5.
"Debentures Redemption Price" shall have the meaning set forth in
Section 3.4.
"Declaration" means the Amended and Restated Declaration of Trust of
Cendant Capital I, a Delaware statutory business trust, dated as of February
24, 1998.
"Deferred Interest" shall have the meaning set forth in Section 4.1
hereof.
"Dissolution Event" means that, as a result of the occurrence and
continuation of a Tax Event, an Investment Company Event or otherwise, the
Trust is to be dissolved in accordance with the Declaration, and, except in the
case of a Tax Event Redemption, the Debentures held by the Institutional
Trustee are to be distributed to the holders of the Trust Securities issued by
the Trust pro rata in accordance with the Declaration.
"Extended Interest Payment Period" shall have the meaning set forth in
Section 4.1.
"Failed Remarketing" shall have the meaning set forth in Section
5.4(b) of the Purchase Contract Agreement.
"Global Debentures" shall have the meaning set forth in Section 2.4.
"Non Book-Entry Preferred Securities" shall have the meaning set forth
in Section 2.4 .
"Purchase Contract" shall have the meaning set forth in the Purchase
Contract Agreement.
"Purchase Contract Agreement" shall mean that certain agreement dated
March 2, 1998 between the Company and The First National Bank of Chicago, as
purchase contract agent.
"Purchase Contract Settlement Date" means February 16, 2001.
"Put Option" shall have the meaning set forth in Section 3.4.
2
"Quotation Agent" means (i) Merrill Lynch Government Securities, Inc.
and its respective successors, provided, however, that if the foregoing shall
cease to be a Primary Treasury Dealer, the Company shall substitute therefor
another Primary Treasury Dealer, and (ii) any other Primary Treasury Dealer
selected by the Company.
"Redemption Amount" means for each Debenture, the product of (i) the
principal amount of such Debenture and (ii) a fraction whose numerator is the
Treasury Portfolio Purchase Price and whose denominator is the Applicable
Principal Amount of the Treasury Portfolio.
"Tax Event" means the receipt by the Trust of an opinion of a
nationally recognized independent tax counsel experienced in such matters to
the effect that, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein affecting taxation, (b) any amendment to or change in an interpretation
or application of such laws or regulations by any legislative body, court,
governmental agency or regulatory authority or (c) any interpretation or
pronouncement that provides for a position with respect to such laws or
regulations that differs from the generally accepted position on the date the
Trust Securities are issued, which amendment or change is effective or which
interpretation or pronouncement is announced on or after the date of issuance
of the Trust Securities under the Declaration, there is more than an
insubstantial risk that (i) interest payable by the Company on the Debentures
would not be deductible, in whole or in part, by the Company for federal income
tax purposes or (ii) the Trust would be subject to more than a de minimis
amount of other taxes, duties or other governmental charges.
"Tax Event Redemption Date" shall have the meaning set forth in
Section 3.1 hereof.
"Treasury Portfolio" means with respect to the Applicable Principal
Amount of Debentures (a) if the Tax Event Redemption Date occurs prior to
February 16, 2001, a portfolio of zero-coupon U.S. Treasury Securities
consisting of (i) principal or interest strips of U.S. Treasury Securities
which mature on or prior to February 15, 2001 in an aggregate amount equal to
the Applicable Principal Amount and (ii) with respect to each scheduled
interest payment date on the Debentures that occurs after the Tax Event
Redemption Date principal or interest strips of U.S. Treasury Securities which
mature on or prior to such date in an aggregate amount equal to the aggregate
interest payment that would be due on the Applicable Principal Amount of the
Debentures on such date, and (b) if the Tax Event Redemption Date occurs after
February 16, 2001, a portfolio of zero-coupon U.S. Treasury Securities con
sisting of (i) principal or interest strips of U.S. Treasury Securities which
mature on or prior to February 15, 2003 in an aggregate amount equal to the
Applicable Principal Amount and (ii) with respect to each scheduled interest
payment date on the Debentures that occurs after the Tax Event Redemption Date
interest or principal strips of such U.S. Treasury Securities which mature on
or prior to such date in an aggregate amount equal to the aggregate interest
payment that would be due on the Applicable Principal Amount of the Debentures
on such date.
"Treasury Portfolio Purchase Price" means the lowest aggregate price
quoted by a primary U.S. government securities dealer in New York City (a
"Primary Treasury Dealer") to the Quotation Agent on the third Business Day
immediately preceding the Tax Event Redemption Date for the purchase of the
Treasury Portfolio for settlement on the Tax Event Redemption Date.
(g) the following terms shall have the meanings given to them in the
Purchase Contract: Collateral Agent.
3
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1. Designation, Principal Amount and Authorized Denomination.
There is hereby authorized a series of Securities designated the 6.45%
Debentures (the "Debentures") due February 16, 2003, limited in aggregate
principal amount to $1,541,237,150, which amount to be issued shall be as set
forth in any written order of the Company for the authentication and delivery
of Debentures pursuant to the Base Indenture. The denominations in which
debentures shall be issuable is $50 and integral multiples thereof.
SECTION 2.2. Maturity. The Maturity Date will be February 16, 2003.
SECTION 2.3. Form and Payment.
Except as provided in Section 2.4, the Debentures shall be issued in
fully registered certificated form without interest coupons bearing identical
terms. Principal and interest on the Debentures issued in certificated form
will be payable, the transfer of such Debentures will be registrable and such
Debentures will be exchangeable for Debentures bearing identical terms and
provisions at the office or agency of the Trustee; provided, however, that
payment of interest may be made at the option of the Company by check mailed to
the Holder at such address as shall appear in the Security Register.
Notwithstanding the foregoing, so long as the Holder of any Debentures is the
Institutional Trustee, the payment of the principal of and interest (including
Compounded Interest and expenses and taxes of the Trust set forth in Section
4.1 hereof, if any) on such Debentures held by the Institutional Trustee will
be made at such place and to such account as may be designated by the
Institutional Trustee.
SECTION 2.4. Global Debenture.
(a) In connection with a Dissolution Event,
(i) the Debentures in certificated form may be presented to the
Trustee by the Institutional Trustee in exchange for a global Debenture in an
aggregate principal amount equal to the aggregate principal amount of all
outstanding Debentures (a "Global Debenture"), to be registered in the name of
the Clearing Agency, or its nominee, and delivered by the Institutional Trustee
to the Clearing Agency for crediting to the accounts of its participants
pursuant to the instructions of the Regular Trustees. The Company upon any such
presentation shall execute a Global Debenture in such aggregate principal
amount and deliver the same to the Trustee for authentication and delivery in
accordance with the Indenture. The Trustee, upon receipt of such Global
Debenture, together with an Officers' Certificate requesting authentication,
will authenticate such Global Debenture. Payments on the Debentures issued as a
Global Debenture will be made to the Clearing Agency; and
(ii) if any Preferred Securities are held in non book-entry
certificated form, the Debentures in certificated form may be presented to the
Trustee by the Institutional Trustee and any Preferred Security Certificate
which represents Preferred Securities other than Preferred Securities held by
the Clearing Agency or its nominee ("Non Book-Entry Preferred Securities") will
be deemed to represent beneficial interests in the Debentures presented to the
Trustee by the Institutional Trustee having an aggregate principal amount equal
to the aggregate liquidation amount of the Non Book-Entry Preferred Securities
until such Preferred Security Certificates are presented to the Institutional
Trustee for transfer or reissuance at which time such Preferred Security
Certificates will be cancelled and a Debenture, registered in the name of the
Holder of the Preferred Security Certificate or the transferee of the Holder of
such Preferred Security Certificate, as the case may be, with an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Security Certificate cancelled, will be executed by the Company and delivered
to the Trustee for authentication and delivery in accordance with the Indenture
to such Holder. The Trustee, upon receipt of such Debenture together with an
Officers' Certificate requesting authentication, shall authenticate such
4
Debenture. On issue of such Debentures, Debentures with an equivalent aggregate
principal amount that were presented by the Institutional Trustee to the
Trustee will be deemed to have been cancelled.
(b) Unless and until it is exchanged for the Debentures in registered
form, a Global Debenture may be transferred, in whole but not in part, only to
another nominee of the Clearing Agency, or to a successor Clearing Agency
selected or approved by the Company or to a nominee of such successor Clearing
Agency.
(c) If at any time the Clearing Agency notifies the Company that it is
unwilling or unable to continue as a Clearing Agency or if at any time the
Clearing Agency for such series shall no longer be registered or in good
standing under the Securities Exchange Act of 1934, as amended, or other
applicable statute or regulation, and a successor Clearing Agency for such
series is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such condition, as the case may be,
the Company will execute, and, subject to Article III of the Indenture, the
Trustee, upon written notice from the Company, will authenticate and deliver
the Debentures in certificated registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Debenture in exchange for such Global Debenture. In
addition, the Company may at any time determine that the Debentures shall no
longer be represented by Global Debenture. In such event the Company will
execute, and subject to Section 3.3 of the Base Indenture, the Trustee, upon
receipt of an Officers' Certificate evidencing such determination by the
Company, will authenticate and deliver the Debentures in certificated
registered form without coupons, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the Global
Debenture in exchange for such Global Debenture. Upon the exchange of the
Global Debenture for such Debentures in certificated registered form without
coupons, in authorized denominations, the Global Debenture shall be cancelled
by the Trustee. Such Debentures in certificated registered form issued in
exchange for the Global Debenture shall be registered in such names and in such
authorized denominations as the Clearing Agency, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee.
The Trustee shall deliver such Securities to the Clearing Agency for delivery
to the Persons in whose names such Securities are so registered.
SECTION 2.5. Interest.
(a) Each Debenture will bear interest initially at the rate of 6.45%
per annum (the "Coupon Rate") from the original date of issuance until February
15, 2001, and thereafter at the rate determined by the Reset Agent and notified
to the Trustee by the Company (the "Reset Rate") until the principal thereof
becomes due and payable, and on any overdue principal and (to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at the rate of 6.45% until February 15, 2001 and at the
Reset Rate thereafter, compounded quarterly, payable (subject to the provisions
of Article IV herein) quarterly in arrears on February 16, May 16, August 16
and November 16 of each year (each, an "Interest Payment Date") commencing on
May 16, 1998, to the Person in whose name such Debenture or any predecessor
Debenture is registered, at the close of business on the Regular Record Date
for such interest installment, which, in respect of (i) Debentures of which the
Institutional Trustee is the Holder and the Preferred Securities are in
book-entry only form or (ii) a Global Debenture, shall be the close of business
on the Business Day next preceding that Interest Payment Date. Notwithstanding
the foregoing sentence, if (i) the Debentures are held by the Institutional
Trustee and the Preferred Securities are no longer in book-entry only form or
(ii) the Debentures are not represented by a Global Debenture, the Company may
select a Regular Record Date for such interest installment which shall be more
than 15 Business Days but less than 60 Business Days prior to an Interest
Payment Date.
(b) The Coupon Rate on the Debentures will be reset on the third
Business Day immediately preceding the Purchase Contract Settlement Date to the
Reset Rate (which Reset Rate will become effective on and after the Purchase
Contract Settlement Date). On the tenth (10) Business Day immediately preceding
the Purchase Contract Settlement Date, the Reset Announcement Date, the Reset
Spread and the relevant Two-Year Benchmark Treasury will be announced by the
Company and the Company shall deliver an Officers' Certificate to the Trustee
containing such information. On the Business Day immediately following such
Reset Announcement Date, the Holders of
5
Debentures will be notified of such Reset Spread and Two-Year Benchmark
Treasury by the Company. Such notice shall be sufficiently given to such
Holders of Debentures if published in an Authorized Newspaper.
(c) Not later than 10 calendar days nor more than 15 calendar days
immediately preceding the Reset Announcement Date, the Company will request
that the Clearing Agency or its nominee (or any successor Clearing Agency or
its nominee) or the Institutional Trustee, notify the Holders of Debentures of
such Reset Announcement Date and the procedures to be followed by such holders
of Debentures wishing to settle the related Purchase Contract with separate
cash on the Business Day immediately preceding the Purchase Contract Settlement
Date.
(d) The amount of interest payable for any period will be computed on
the basis of a 360-day year consisting of twelve 30-day months. Except as
provided in the following sentence, the amount of interest payable for any
period shorter than a full quarterly period for which interest is computed,
will be computed on the basis of the actual number of days elapsed in such a
90-day period. In the event that any date on which interest is payable on the
Debentures is not a Business Day, then payment of interest payable on such date
will be made on the next succeeding day which is a Business Day (and without
any interest or other payment in respect of any such delay), except that, if
such Business Day is in the next succeeding calendar year, such payment shall
be made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date.
ARTICLE III
REDEMPTION OF THE DEBENTURES
SECTION 3.1. Tax Event Redemption.
If a Tax Event shall occur and be continuing, the Company may, at its
option, redeem the Debentures in whole (but not in part) at any time at a
Redemption Price per Debenture equal to the Redemption Amount plus accrued and
unpaid interest thereon, together with Compounded Interest and the expenses and
taxes of the Trust set forth in Section 4.1 hereof, if any, to the date of such
redemption (the "Tax Event Redemption Date"). If, following the occurrence of a
Tax Event, the Company exercises its option to redeem the Debentures, then the
proceeds of such redemption, if distributed to the Institutional Trustee as the
sole Holder of such Debentures, will be applied by the Institutional Trustee to
redeem Trust Securities having an aggregate liquidation amount equal to the
aggregate principal amount of the Debentures so redeemed, at the Redemption
Price. If, following the occurrence of a Tax Event, the Company exercises its
option to redeem the Debentures, the Company shall appoint the Quotation Agent
to assemble the Treasury Portfolio in consultation with the Company. Upon
exercise of its option to redeem the Debentures, the Company shall in the
notice to the Trustee pursuant to Section 1102 of the Base Indenture specify
the Redemption Price and the Redemption Amount. The Trustee shall have no duty
or liability to determine or verify such amount. Notice of any redemption will
be mailed at least 30 days but not more than 60 days before the Tax Event
Redemption Date to each registered Holder of the Debentures to be prepaid at
its registered address. Unless the Company defaults in payment of the
Redemption Price, on and after the redemption date interest shall cease to
accrue on such Debentures.
SECTION 3.2. Redemption Procedure for Debentures.
Payment of the Redemption Price to each Holder of Debentures shall be
made by the Paying Agent (subject to its receipt of funds), no later than 12:00
noon, New York City time, on the Tax Event Redemption Date, by check or wire
transfer in immediately available funds (provided the necessary wire
instructions have been provided to the Paying Agent at least 15 days prior to
the Tax Event Redemption Date) at such place and to such account as may be
designated by each such Holder of Debentures, including the Institutional
Trustee or the Collateral Agent, as the case may be. If the Trustee holds
immediately available funds sufficient to pay the Redemption Price of the
Debentures (or, if the Company is acting as Paying Agent or the Institutional
Trustee has received the Redemption Price), then,
6
on such Tax Event Redemption Date, such Debentures will cease to be outstanding
and interest thereon will cease to accrue, whether or not such Debentures have
been received by the Company, and all other rights of the Holder in respect of
the Debentures shall terminate and lapse (other than the right to receive the
Redemption Price upon delivery of such Debentures but without interest on such
Redemption Price).
SECTION 3.3. No Sinking Fund.
The Debentures are not entitled to the benefit of any sinking fund.
SECTION 3.4. Option to Put Debentures.
If a Failed Remarketing has occurred, the Company shall immediately
notify the Trustee thereof and each Holder of Debentures who holds such
Debentures on the day immediately following the Purchase Contract Settlement
Date shall have the right (the "Put Option") on or after the Business Day
immediately following the Purchase Contract Settlement Date, upon at least
three Business Days' prior notice, to require the Company to repurchase such
Holder's Debentures on March 2, 2001 (the "Put Option Exercise Date"), either
in whole or in part, at a repayment price per Debenture equal to $50, plus
accrued and unpaid interest, if any, thereon to the date of payment including
deferred interest, if any (the "Debenture Repayment Price").
SECTION 3.5. Repurchase Procedure for Debentures.
(a) In order for the Debentures to be repurchased on the Put
Option Exercise Date, the Company must receive on or prior to 5:00 p.m. New
York City time on the third Business Day immediately preceding the Put Option
Exercise Date, at the principal executive offices of Cendant Corporation in
Parsippany, New Jersey, the Debentures to be repurchased with the form entitled
"Option to Elect Repayment" on the reverse of or otherwise accompanying such
Debentures duly completed. Any such notice received by the Company shall be
irrevocable. All questions as to the validity, eligibility (including time of
receipt) and acceptance of the Debentures for repayment shall be determined by
the Company, whose determination shall be final and binding. All such
Debentures repurchased by the Company shall be presented by the Company to the
Trustee for cancellation thereof.
(b) Payment of the Debentures Repayment Price to Holders of
Debentures shall be made either through the Trustee, subject to the Trustee's
receipt of payment from the Company in accordance with the terms of the
Indenture or through the Trustee or the Company acting as Paying Agent, no
later than 12:00 noon, New York City time, on the Put Option Exercise Date, and
to such account as may be designated by such Holders. If the Trustee holds
immediately available funds sufficient to pay the Debentures Repayment Price of
the Debentures presented for repayment (or, if the Company is acting as Paying
Agent and the Institutional Trustee has received the Debentures Repayment
Price), then, immediately prior to the close of business on the Business Day
immediately preceding the Put Option Exercise Date, such Debentures will cease
to be outstanding and interest thereon will cease to accrue, whether or not
such Debentures have been received by the Company, and all other rights of the
Holder in respect of the Debentures, including the Holder's right to require
the Company to repay such Debentures, shall terminate and lapse (other than the
right to receive the Debentures Repayment Price upon delivery of such
Debentures but without interest on such Debentures Repayment Price). Neither
the Trustee nor the Company will be required to register or cease to be
registered the transfer of any Debentures for which repayment has been elected.
7
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. Extension of Interest Payment Period.
The Company shall have the right at any time, and from time to time,
during the term of the Debentures, to defer payments of interest by extending
the interest payment period of such Debentures for a period not extending, in
the aggregate, beyond the Maturity Date of the Debentures (the "Extended
Interest Payment Period"), during which Extended Interest Payment Period no
interest shall be due and payable. The Company shall promptly notify the
Trustee of any such extension of the interest payment period. To the extent
permitted by applicable law, interest, the payment of which has been deferred
because of the extension of the interest payment period pursuant to this
Section 4.1, will bear interest thereon at the rate of 6.45% until February 15,
2001, and at the Reset Rate thereafter compounded quarterly for each quarter of
the Extended Interest Payment Period ("Compounded Interest"). At the end of the
Extended Interest Payment Period, the Company shall pay all interest accrued
and unpaid on the Debentures, together with any expenses and taxes of the Trust
set forth in Section 5.1 hereof (as notified to the Trustee by the Company) and
Compounded Interest (together, "Deferred Interest") that shall be payable to
the Holders of the Debentures in whose names the Debentures are registered in
the Security Register on the first record date after the end of the Extended
Interest Payment Period; provided, however, that during any such Extended
Interest Payment Period, (a) the Company shall not declare or pay dividends on
or make any distribution with respect to, or redeem, purchase, acquire or make
a liquidation payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of capital stock of the Company in connection with
the satisfaction by the Company of its obligations under any employee or agent
benefit plans or the satisfaction by the Company of its obligations pursuant to
any contract or security outstanding on the date of such event requiring the
Company to purchase capital stock of the Company, (ii) as a result of a
reclassification of the Company's capital stock or the exchange or conversion
of one class or series of the Company's capital stock for another class or
series of the Company capital stock, (iii) the purchase of fractional interests
in shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
(iv) dividends or distributions in capital stock of the Company (or rights to
acquire capital stock) or repurchases or redemptions of capital stock solely
from the issuance or exchange of capital stock or (v) redemptions or
repurchases of any rights outstanding under a shareholder rights plan and the
declaration thereunder of a dividend of rights in the future), (b) the Company
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by the Company that rank
junior to the Debentures, and (c) the Company shall not make any guarantee
payments with respect to the foregoing (other than payments pursuant to the
Guarantee or the Common Securities Guarantee). Prior to the termination of any
Extended Interest Payment Period, the Company may further extend such period,
provided that such period together with all such previous and further
extensions thereof shall not extend beyond the Maturity Date of the Debentures.
The Company shall promptly notify the Trustee of each extension of an Extended
Interest Payment Period. Upon the termination of any Extended Interest Payment
Period and the payment of all Deferred Interest then due, the Company may
commence a new Extended Interest Payment Period, subject to the foregoing
requirements. No interest shall be due and payable during an Extended Interest
Payment Period, except at the end thereof, but the Company, at its option, may
prepay on any Interest Payment Date all or any portion of the interest accrued
during the then elapsed portion of an Extended Interest Payment Period.
SECTION 4.2. Notice of Extension.
(a) If the Institutional Trustee is the only registered Holder of the
Debentures at the time the Company selects an Extended Interest Payment Period,
the Company shall give written notice to the Regular Trustees, the
Institutional Trustee and the Trustee of its selection of such Extended
Interest Payment Period one Business Day before the earlier of (i) the next
succeeding date on which interest is payable on the Debentures (which shall
also be the next succeeding date on which Distributions on the Trust Securities
issued by the Trust are payable), or (ii) the date the Trust is required to
give notice of the record date for the Preferred Securities, or the date such
Distributions are
8
payable, to the New York Stock Exchange or other applicable self-regulatory
organization or to holders of the Preferred Securities issued by the Trust, but
in any event at least one Business Day before such record date.
(b) If the Institutional Trustee is not the only Holder of the
Debentures at the time the Company selects an Extended Interest Payment Period,
the Company shall give the Holders of the Debentures and the Trustee written
notice of its selection of such Extended Interest Payment Period at least 10
Business Days before the earlier of (i) the next succeeding Interest Payment
Date, or (ii) the date the Company is required to give notice of the record or
payment date of such interest payment to the New York Stock Exchange or other
applicable self-regulatory organization or to Holders of the Debentures.
SECTION 4.3. Limitation of Transactions.
If (i) the Company shall exercise its right to defer payment of
interest as provided in Section 4.1, or (ii) there shall have occurred any
Event of Default, as defined in the Indenture, then (a) the Company shall not
declare or pay dividends or make any distribution with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock (other than (i) purchases or acquisitions of capital stock of the
Company in connection with the satisfaction by the Company of its obligations
under any employee or agent benefit plans or the satisfaction by the Company of
its obligations pursuant to any contract or security outstanding on the date of
such event requiring the Company to purchase capital stock of the Company, (ii)
as a result of a reclassification of the Company's capital stock or the
exchange or conversion of one class or series of the Company's capital stock
for another class or series of the Company capital stock, (iii) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, (iv) dividends or distributions in capital stock of the
Company (or rights to acquire capital stock) or repurchases or redemptions of
capital stock solely from the issuance or exchange of capital stock and (v)
redemptions or repurchases of any rights outstanding under a shareholder rights
plan and the declaration thereunder of a dividend of rights in the future), (b)
the Company shall not make any payment of interest, principal or premium, if
any, on or repay, repurchase or redeem any debt securities issued by the
Company that rank junior to the Debentures, and (c) the Company shall not make
any guarantee payments with respect to the foregoing (other than payments
pursuant to the Guarantee or the Common Securities Guarantee).
ARTICLE V
EXPENSES
SECTION 5.1. Payment of Expenses.
In connection with the offering, sale and issuance of the Debentures
to the Institutional Trustee and in connection with the sale of the Trust
Securities by the Trust, the Company, in its capacity as borrower with respect
to the Debentures, shall pay all costs and expenses relating to the offering,
sale and issuance of the Debentures, including commissions to the underwriters
payable pursuant to the Underwriting Agreement and the Pricing Agreement and
compensation of the Trustee under the Indenture in accordance with the
provisions of the Base Indenture.
SECTION 5.2. Payment Upon Resignation or Removal.
Upon termination of this First Supplemental Indenture or the Base
Indenture or the removal or resignation of the Trustee pursuant to this Section
5.2, the Company shall pay to the Trustee all amounts then owing to the Trustee
under Section 606 of the Base Indenture. Upon termination of the Declaration or
the removal or resignation of the Delaware Trustee or the Institutional
Trustee, as the case may be, pursuant to Section 5.6 of the Declaration, the
Company shall pay to the Delaware Trustee or the Institutional Trustee, as the
case may be, all amounts accrued to the date of such termination, removal or
resignation.
9
ARTICLE VI
FORM OF DEBENTURE
SECTION 6.1. Form of Debenture.
The Debentures and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the following forms:
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT - This Debenture
is a Global Debenture within the meaning of the Indenture hereinafter referred
to and is registered in the name of the Clearing Agency or a nominee of the
Clearing Agency. This Debenture is exchangeable for Debentures registered in
the name of a person other than the Clearing Agency or its nominee only in the
limited circumstances described in the Indenture, and no transfer of this
Debenture (other than a transfer of this Debenture as a whole 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 of the Clearing Agency) may be
registered except in limited circumstances.
Unless this Debenture is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the
issuer or its agent for registration of transfer, exchange or payment, and any
Debenture 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.]
No.
-------------------------------
$
---------------------------------
CUSIP No.
-------------------------
CENDANT CORPORATION
6.45% DEBENTURE
DUE FEBRUARY 16, 2003
CENDANT CORPORATION, a Delaware corporation (the "Company", which term
includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to
, the principal sum of ($______________) on February 16, 2003
(such date is hereinafter referred to as the "Maturity Date"), and to pay
interest on said principal sum from , 1998, or from the most recent interest
payment date (each such date, an "Interest Payment Date") to which interest has
been paid or duly provided for, quarterly (subject to deferral as set forth
herein) in arrears on February 16, May 16, August 16 and November 16 of each
year, commencing on May 16, 1998, initially at the rate of 6.45% per annum
until February 15, 2001, and at the Reset Rate thereafter until the principal
hereof shall have become due and payable, and on any overdue principal and
premium, if any, and (without duplication and to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment
of interest at the rate of 6.45% until February 15, 2001, and at the Reset Date
thereafter, compounded quarterly. The interest rate will be reset on the third
business day preceding February 16, 2001 to the Reset Rate (as determined by
the Reset Agent). The amount of interest payable on any Interest Payment Date
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months. In the event that any date on which interest is payable on this
Debenture is not a Business Day, then payment of interest payable on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date. The interest installment so payable,
and punctually paid or duly provided
10
for, on any Interest Payment Date will, as provided in the Indenture, be paid
to the person in whose name this Debenture (or one or more Predecessor
Securities, as defined in said Indenture) is registered at the close of
business on the regular record date for such interest installment which in the
case of a Global Debenture shall be the close of business on the Business Day
next preceding such Interest Payment Date; provided, however, if pursuant to
the terms of the indenture the Debentures are no longer represented by a Global
Debenture, the Company may select such regular record date for such interest
installment which shall be more than fifteen Business Days but less than 60
Business Days prior to an Interest Payment Date. Any such interest installment
not punctually paid or duly provided for shall forthwith cease to be payable to
the registered Holders on such regular record date and may be paid to the
Person in whose name this Debenture (or one or more Predecessor Securities) is
registered at the close of business on a special record date to be fixed by the
Trustee for the payment of such defaulted interest, notice whereof shall be
given to the registered Holders of this series of Debentures not less than 10
days prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Debentures may be listed, and upon such notice as may be required
by such exchange all as more fully provided in the Indenture. The principal of
(and premium, if any) and the interest on this Debenture shall be payable at
the office or agency of the Trustee maintained for that purpose in any coin or
currency of the United States of America that at the time of payment is legal
tender for payment of public and private debts; provided, however, that payment
of interest may be made at the option of the Company by check mailed to the
registered Holder at such address as shall appear in the Security Register or
by wire transfer to an account appropriately designated by the Holder entitled
thereto. Notwithstanding the foregoing, so long as the Holder of this Debenture
is the Institutional Trustee or the Collateral Agent, the payment of the
principal of (and premium, if any) and interest on this Debenture will be made
at such place and to such account as may be designated in writing by the
Institutional Trustee or the Collateral Agent.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, senior and unsecured and will rank in right of
payment on parity with all other senior unsecured obligations of the Company.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any
purpose until the Certificate of Authentication hereon shall have been signed
by or on behalf of the Trustee.
The provisions of this Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
11
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
Dated
CENDANT CORPORATION
By:
--------------------------------
Name:
Title:
Attest:
By:
--------------------------------
Name:
Title:
12
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures described in the
within-mentioned Indenture.
Dated
-----------------------------
- ----------------------------------
as Trustee
By
--------------------------------
Authorized Signatory
13
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Securities of the
Company (herein sometimes referred to as the "Securities"), specified in the
Indenture, all issued or to be issued in one or more series under and pursuant
to an Indenture dated as of February 24, 1998 (the "Base Indenture"), duly
executed and delivered between the Company and The Bank of Nova Scotia Trust
Company of New York, as Trustee (the "Trustee") (as supplemented by a First
Supplemental Indenture, dated February 24, 1998), (the Base Indenture as so
supplemented, the "Indenture"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the Holders of the Securities. By the terms of the
Indenture, the Securities are issuable in series that may vary as to amount,
date of maturity, rate of interest and in other respects as provided in the
Indenture. This series of Securities is limited in aggregate principal amount
as specified in said First Supplemental Indenture.
If a Tax Event shall occur and be continuing, the Company may, at its
option, redeem Debentures in whole (but not in part) at any time at a
Redemption Price per Debenture equal to the Redemption Amount plus accrued and
unpaid interest thereon, together with Compounded Interest and expenses and
taxes of the Trust (each as defined herein), if any, to the Tax Event
Redemption Date. The Redemption Price shall be paid to each Holder of the
Debenture by the Company, no later than 12:00 noon, New York City time, on the
Tax Event Redemption Date, by check or wire transfer in immediately available
funds, at such place and to such account as may be designated by each such
Holder.
The Debentures are not entitled to the benefit of any sinking fund.
If a Failed Remarketing has occurred, each Holder of this Debenture
who holds this Debenture on the day immediately following the Purchase Contract
Settlement Date shall have the right (the "Put Option") on or after the
Business Day immediately following the Purchase Contract Settlement Date, upon
at least three Business Days' prior notice, to require the Company to
repurchase such Holder's Debentures on March 2, 2001 (the "Put Option Exercise
Date"), either in whole or in part, at a repayment price per Debenture equal to
$50, plus accrued and unpaid interest, if any, thereon to the date of payment
including deferred interest, if any (the "Debenture Repayment Price"). In order
for the Debentures to be so repurchased, the Company must receive, on or prior
to 5:00 p.m. New York City Time on the third Business Day immediately preceding
the Put Option Exercise Date, at the principal executive offices of Cendant
Corporation in Parsippany, New Jersey, the Debentures to be repurchased with
the form entitled "Option to Elect Repayment" on the reverse of or otherwise
accompanying such Debentures duly completed. Any such notice received by the
Company shall be irrevocable. All questions as to the validity, eligibility
(including time of receipt) and acceptance of the Debentures for repayment
shall be determined by the Company, whose determination shall be final and
binding. The payment of the Debentures Repayment Price in respect of such
Debentures shall be made, either through the Trustee or the Company acting as
Paying Agent, no later than 12:00 noon, New York City time, on the Put Option
Exercise Date.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the
time outstanding, as defined in the Indenture, to execute supplemental
indentures for the purpose of, among other things, adding any provisions to or
changing or eliminating any of the provisions of the Indenture or of any
supplemental indenture or of modifying the rights of the Holders of the
Debentures; provided, however, that, among other things, no such supplemental
indenture shall (i) reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest thereon (subject to the Company's right
to defer such payments in the manner set forth herein),
14
or reduce any premium payable upon the redemption thereof, without the consent
of the Holder of each Debenture so affected, or (ii) reduce the aforesaid
percentage of Debentures, the Holders of which are required to consent to any
such supplemental indenture, without the consent of the Holders of each
Debenture then outstanding and affected thereby. The Indenture also contains
provisions permitting the Holders of a majority in aggregate principal amount
of the Securities of any series at the time outstanding affected thereby, on
behalf of all of the Holders of the Debentures of such series, to waive a
Default or Event of Default with respect to such series, and its consequences,
except a Default or Event of Default in the payment of the principal of or
premium, if any, or interest on any of the Securities of such series. Any such
consent or waiver by the registered Holder of this Debenture (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such Holder and
upon all future Holders and owners of this Debenture and of any Debenture
issued in exchange for or in place hereof (whether by registration of transfer
or otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Debenture at the time and place and at
the rate and in the money herein prescribed.
So long as the Company is not in default in the payment of interest on
the Debenture, the Company shall have the right at any time during the term of
the Debentures from time to time to extend the interest payment period of such
Debentures for a period not extending, in the aggregate, beyond the Maturity
Date of the Debentures (an "Extended Interest Payment Period"). At the end of
an Extended Interest Payment Period, the Company shall pay all interest then
accrued and unpaid (together with the interest thereon at the rate of 6.45%
until February 15, 2001 and at the Reset Rate thereafter to the extent that
payment of such interest is enforceable under applicable law). In the event
that the Company exercises this right, then (a) the Company shall not declare
or pay dividends or make any distribution with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock
(other than (i) purchases or acquisitions of capital stock of the Company in
connection with the satisfaction by the Company of its obligations under any
employee or agent benefit plans or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on the date of
such event requiring the Company to purchase capital stock of the Company, (ii)
as a result of a reclassification of the Company's capital stock or the
exchange or conversion of one class or series of the Company's capital stock
for another class or series of the Company capital stock, (iii) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, (iv) dividends or distributions in capital stock of the
Company (or rights to acquire capital stock) or repurchases or redemptions of
capital stock solely from the issuance or exchange of capital stock or (v)
redemptions or purchases of any rights outstanding under a shareholder rights
plan and the declaration thereunder of a dividend of rights in the future), (b)
the Company shall not make any payment of interest, principal or premium, if
any, or repay, repurchase or redeem any debt securities issued by the Company
that rank junior to the Debentures, and (c) the Company shall not make any
guarantee payments with respect to the foregoing (other than payments pursuant
to the Guarantee or the Common Securities Guarantee). Prior to the termination
of any such Extended Interest Payment Period, the Company may further extend
the interest payment period; provided, that such Extended Interest Payment
Period, together with all such previous and further extensions thereof, may not
extend beyond the Maturity Date of the Debenture. At the termination of any
such Extended Interest Payment Period and upon the payment of all accrued and
unpaid interest and any additional amount then due, the Company may commence a
new Extended Interest Payment Period, subject to the above requirements.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the registered Holder
hereof on the Security Register of the Company, upon surrender of this
Debenture for registration of transfer at the office or agency of the Trustee
in the City of New York and State of New York accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company or
the Trustee duly executed by the registered Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Debentures of authorized
denominations and for the same aggregate principal amount and series will be
issued
15
to the designated transferee or transferees. No service charge will be made for
any such transfer, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any Paying Agent and the Security
Registrar may deem and treat the registered holder hereof as the absolute owner
hereof (whether or not this Debenture shall be overdue and notwithstanding any
notice of ownership or writing hereon made by anyone other than the Security
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any Paying Agent nor any
Security Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, shareholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.
The Indenture imposes certain limitations on the ability of the
Company to, among other things, merge or consolidate with any other Person or
sell, assign, transfer or lease all or substantially all of its properties or
assets. All such covenants and limitations are subject to a number of important
qualifications and exceptions. The Company must report periodically to the
Trustee on compliance with the covenants in the Indenture.
The Debentures of this series are issuable only in registered form
without coupons in denominations of $50 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Debentures of this series so issued are exchangeable for a like aggregate
principal amount of Debentures of this series of a different authorized
denomination, as requested by the Holder surrendering the same.
All terms used in this Debenture that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
16
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Company
to repay $_____ principal amount of the within Debenture, pursuant to its
terms, on the "Put Option Exercise Date," together with any interest thereon
accrued but unpaid to the date of repayment, to the undersigned at:
(Please print or type Name and Address of the Undersigned)
and to issue to the undersigned, pursuant to the terms of the Indenture, a new
Debenture or Debentures representing the remaining aggregate principal amount
of this Debenture.
For this Option to Elect Repayment to be effective, this Indenture with the
Option to Elect Repayment duly completed must be received by the Company at
Cendant Corporation, Attn: Corporate Secretary, 6 Sylvan Way, Parsippany, New
Jersey, no later than 5:00 p.m. on February 27, 2001.
Dated: Signature:
------------------------------
Signature Guarantee:
--------------------
Note: The signature to this Option to Elect Repayment must correspond with the
name as written upon the face of the within Debenture in every particular
without alteration or enlargement or any change whatsoever.
17
------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Debenture to:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
agent to transfer this Debenture on the books of the Trust. The agent may
substitute another to act for him or her.
Date:
------------------------
Signature:
------------------------------
Signature Guarantee:
--------------------
(Sign exactly as your name appears on the other side of this Debenture)
18
ARTICLE VII
ORIGINAL ISSUE OF DEBENTURES
SECTION 7.1. Original Issue of Debentures.
Debentures in the aggregate principal amount of $1,541,237,150 may,
upon execution of this First Supplemental Indenture, be executed by the Company
and delivered to the Trustee for authentication, and the Trustee shall
thereupon authenticate and deliver said Debentures to or upon the written order
of the Company, signed by its Chairman, its Vice Chairman, its President, or
any Vice President and its Treasurer or an Assistant Treasurer, without any
further action by the Company.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Ratification of Indenture.
The Indenture as supplemented by this First Supplemental Indenture, is
in all respects ratified and confirmed, and this First Supplemental Indenture
shall be deemed part of the Indenture in the manner and to the extent herein
and therein provided.
SECTION 8.2. Trustee Not Responsible for Recitals.
The recitals herein contained are made by the Company and not by the
Trustee, and the Trustee assumes no responsibility for the correctness thereof.
The Trustee makes no representation as to the validity or sufficiency of this
First Supplemental Indenture.
SECTION 8.3. Governing Law.
This First Supplemental Indenture and each Debenture shall be deemed
to be a contract made under the internal laws of the State of New York, and for
all purposes shall be construed in accordance with the laws of said State.
SECTION 8.4. Separability.
In case any one or more of the provisions contained in this First
Supplemental Indenture or in the Debentures shall for any reason be held to be
invalid illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this First
Supplemental Indenture or of the Debentures, but this First Supplemental
Indenture and the Debentures shall be construed as if such invalid or illegal
or unenforceable provision had never been contained herein or therein.
SECTION 8.5. Counterparts.
This First Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
19
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed by their respective officers
thereunto duly authorized, on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
CENDANT CORPORATION,
as Issuer
By: /s/ James E. Buckman
--------------------------------
Name: James E. Buckman
Title: Senior Executive Vice President
and General Counsel
THE BANK OF NOVA SCOTIA TRUST
COMPANY OF NEW YORK ,
as Trustee
By: /s/ Warren A. Goshine
--------------------------------
Name: Warren A. Goshine
Title: Secretary/Trust Officer
20
REMARKETING AGREEMENT
REMARKETING AGREEMENT, dated as of March 2, 1998 (the
"Remarketing Agreement") by and between Cendant Corporation, a Delaware
corporation ("Cendant" or the "Company"), Cendant Capital I, a Delaware
statutory business trust (the "Trust"),The First National Bank of Chicago, a
national banking association, not individually but solely as Purchase Contract
Agent and as attorney-in-fact of the holders of Purchase Contracts (each as
defined in the Purchase Contract Agreement (as defined herein)), and Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (the
"Remarketing Agent").
WITNESSETH:
WHEREAS, the Company will issue an aggregate Stated Amount
$1.495 billion of its FELINE PRIDES (the "FELINE PRIDES") under the Purchase
Contract Agreement, dated as of March 2, 1998, by and between the Purchase
Contract Agent and the Company (the "Purchase Contract Agreement"); and
WHEREAS, the Trust will issue concurrently in connection with
the issuance of the FELINE PRIDES 6.45% Trust Originated Preferred Securities
(the "Preferred Securities") in an aggregate stated liquidation amount of
$1,495,000,000, under the Amended and Restated Declaration of Trust, dated as
of February 24, 1998, by and among the Company, the Regular Trustees, the
Delaware Trustee and the Institutional Trustee (the "Declaration"); and
WHEREAS, the FELINE PRIDES will initially consist of
27,600,000 units referred to as "Income PRIDES" and 2,300,000 units referred to
as "Growth PRIDES."
WHEREAS, the sole assets of the Trust, $1,541,237,150
aggregate principal amount of 6.45% Debentures due February 16, 2003 (the
"Debentures") of the Company will be purchased by the Trust from the Company
with the proceeds of the sale of the Preferred Securities and the proceeds of
the sale of the common securities of the Trust (the "Common Securities" and,
together with the Preferred Securities, the "Trust Securities"); and
WHEREAS, the Pledged Preferred Securities (or upon a
dissolution of the Trust and the distribution of the Debentures as described in
the Declaration, such Debentures as are distributed to holders of Income PRIDES
in an aggregate principal amount equal to the aggregate stated liquidation
amount of the Pledged Preferred Securities held by such holders of Income
PRIDES) will be pledged pursuant to the Pledge Agreement (the "Pledge
Agreement"), dated as of March 2, 1998, by and between the Company, The Chase
Manhattan Bank, as collateral agent (the "Collateral Agent") and the Purchase
Contract Agent, to secure an Income PRIDES holder's obligations under the
related Purchase Contract on the Purchase Contract Settlement Date; and
WHEREAS, the Preferred Securities or the Debentures, as the
case may be, of such Preferred Security or Debenture holders electing to have
their Preferred Securities or Debentures remarketed, or of such Income PRIDES
holders who have elected not to settle the
Purchase Contracts related to their Income PRIDES from the proceeds of a Cash
Settlement and who have not early settled their Purchase Contracts, will be
remarketed by the Remarketing Agent on the third Business Day immediately
preceding the Purchase Contract Settlement Date; and
WHEREAS, the applicable distribution rate on the Preferred
Securities (and, thus, the interest rate on the Debentures) that remain
outstanding on and after the Purchase Contract Settlement Date will be reset on
the third Business Day immediately preceding the Purchase Contract Settlement
Date, to the Reset Rate to be determined by the Reset Agent as the rate that
such Preferred Securities (and, thus the Debentures) should bear in order to
have an approximate market value of 100.5% of the aggregate stated liquidation
amount of the Preferred Securities or the aggregate principal amount of the
Debentures on the third Business Day immediately preceding the Purchase
Contract Settlement Date, provided that in the determination of such Reset
Rate, the Company may limit the Reset Spread (a component of the Reset Rate) to
be no higher than 200 basis points (2%); and
WHEREAS, the Company has requested Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") to act as
the Reset Agent and as the Remarketing Agent, and as such to perform the
services described herein; and
WHEREAS, Merrill Lynch is willing to act as Reset Agent and
Remarketing Agent and as such to perform such duties on the terms and
conditions expressly set forth herein;
NOW, THEREFORE, for and in consideration of the covenants
herein made, and subject to the conditions herein set forth, the parties hereto
agree as follows:
Section 1. Definitions. Capitalized terms used and not
defined in this Agreement shall have the meanings assigned to them in the
Purchase Contract Agreement or, if not therein stated, the Declaration or the
Pledge Agreement.
Section 2. Appointment and Obligations of Remarketing Agent.
The Company hereby appoints Merrill Lynch and Merrill Lynch hereby accepts such
appointment, (i) as the Reset Agent to determine in consultation with the
Company, in the manner provided for in the Declaration with respect to the
Trust Securities and the Indenture with respect to the Debentures, the Reset
Rate, that in the opinion of the Reset Agent, will, when applied to the Trust
Securities (and, thus, the Debentures), enable a Trust Security (and, thus, a
Debenture), to have an approximate market value of approximately 100.5% of the
aggregate stated liquidation amount in the case of such Trust Security and the
aggregate principal amount in the case of such Debenture, and (ii) as the
exclusive Remarketing Agent to remarket the Preferred Securities, or the
Debentures, as the case may be, provided that the Company may limit such Reset
Rate to be no higher than the rate on the Two-Year Benchmark Treasury plus 200
basis points (2%), as the case may be, of such Preferred Security or Debenture
holders electing to have their Preferred Securities or Debentures remarketed,
or of such Income PRIDES holders who have not early settled the related
Purchase Contracts and have failed to notify the Purchase Contract Agent, on or
prior to the fifth Business Day immediately preceding the Purchase Contract
Settlement Date, of their intention to settle the related Purchase Contracts
through Cash Settlement, for settlement on the Purchase Contract Settlement
Date, pursuant to the Remarketing Underwriting Agreement with the Company, the
Trust and the Purchase Contract Agent, substantially in the form attached
hereto as Exhibit A (with such changes as the Company,
2
the Purchase Contract Agent and the Remarketing Agent may agree upon, it being
understood that changes may be necessary in the representations, warranties,
covenants and other provisions of the Remarketing Underwriting Agreement due to
changes in law or facts and circumstances). Pursuant to the Remarketing
Underwriting Agreement, the Remarketing Agent, either as the sole remarketing
underwriter or as the representative of a syndicate including the Remarketing
Agent and one or more other remarketing underwriters designated by the
Remarketing Agent, will agree, subject to the terms and conditions set forth
therein, that the Remarketing Agent and any such other remarketing underwriters
will purchase severally the Preferred Securities or the Debentures, as the case
may be, to be sold by the holder or holders of Preferred Securities or Income
PRIDES on the third Business Day immediately preceding the Purchase Contract
Settlement Date and use their reasonable efforts to remarket such Preferred
Securities or the Debentures, as the case may be, (such purchase and
remarketing being hereinafter referred to as the "Remarketing"), at a price of
approximately 100.5% of such Preferred Securities aggregate stated liquidation
amount plus any accrued and unpaid distributions (including any deferred
distributions) and in the case of Debentures, at a price of approximately
100.5% of such Debentures aggregate principal amount plus any accrued and
unpaid interest (including any deferred interest). Notwithstanding the
preceding sentence, the Remarketing Agent shall not remarket any Preferred
Securities or Debentures, as the case may be, for a price less than 100% of the
aggregate stated liquidation amount or aggregate principal amount of such
Preferred Securities or Debentures, respectively, plus accumulated and unpaid
distributions or accrued and unpaid interest, as the case may be. The proceeds
of such remarketing shall be paid to the Collateral Agent in accordance with
Section 4.6 of the Pledge Agreement and Section 5.4 of the Purchase Contract
Agreement (each of which Sections are incorporated herein by reference).
Section 3. Fees. With respect to the Remarketing, the
Remarketing Agent shall retain as Remarketing Fee an amount not exceeding 25
basis points (.25%), of the aggregate stated liquidation amount of the
remarketed securities from any amount received in connection with such
Remarketing in excess of the aggregate stated liquidation amount or aggregate
principal amount of such remarketed Preferred Securities or Debentures plus any
accrued and unpaid (including deferred) distributions or any accrued and unpaid
interest (including any deferred interest), as the case may be. In addition,
the Reset Agent shall receive from the Company a reasonable and customary fee
as the Reset Agent Fee (the "Reset Agent Fee"); provided, however, that if the
Remarketing Agent shall also act as the Reset Agent, then the Reset Agent shall
not be entitled to receive any such Reset Agent Fee. Payment of such Reset
Agent Fee shall be made by the Company on the third Business Day immediately
preceding the Purchase Contract Settlement Date in immediately available funds
or, upon the instructions of the Reset Agent by certified or official bank
check or checks or by wire transfer.
Section 4. Replacement and Resignation of Remarketing Agent.
(a) The Company may in its absolute discretion replace Merrill Lynch as the
Remarketing Agent and/or as the Reset Agent in its capacity hereunder by giving
notice prior to 3:00 p.m., New York City time, on the eleventh Business Day
immediately prior to the Purchase Contract Settlement Date. Any such
replacement shall become effective upon the Company's appointment of a
successor to perform the services that would otherwise be performed hereunder
by the Remarketing Agent and/or the Reset Agent. Upon providing such notice,
the Company shall use all reasonable efforts to appoint such a successor and to
enter into a remarketing agreement with such successor as soon as reasonably
practicable.
3
(b) Merrill Lynch may resign at any time and be discharged
from its duties and obligations hereunder as the Remarketing Agent and/or as
the Reset Agent by giving notice prior to 3:00 p.m., New York City time, on the
eleventh Business Day immediately prior to the Purchase Contract Settlement
Date. Any such resignation shall become effective upon the Company's
appointment of a successor to perform the services that would otherwise be
performed hereunder by the Remarketing Agent and/or the Reset Agent. Upon
receiving notice from the Remarketing Agent and/or the Reset Agent that it
wishes to resign hereunder, the Company shall appoint such a successor and
enter into a remarketing agreement with it as soon as reasonably practicable.
Section 5. Dealing in the Securities. The Remarketing Agent,
when acting hereunder or under the Remarketing Underwriting Agreement or acting
in its individual or any other capacity, may, to the extent permitted by law,
buy, sell, hold or deal in any of the Preferred Securities or Debentures, as
the case may be. With respect to any Preferred Securities or Debentures, as
the case may be, owned by it, the Remarketing Agent may exercise any vote or
join in any action with like effect as if it did not act in any capacity
hereunder. The Remarketing Agent, in its individual capacity, either as
principal or agent, may also engage in or have an interest in any financial or
other transaction with the Company as freely as if it did not act in any
capacity hereunder.
Section 6. Registration Statement and Prospectus. In
connection with the Remarketing, if and to the extent required (in the opinion
of counsel for either the Remarketing Agent or the Company) by applicable law,
regulations or interpretations in effect at the time of such Remarketing, the
Company shall use its reasonable efforts to have a registration statement
relating to the Preferred Securities effective under the Securities Act of 1933
by the third Business Day immediately preceding the Purchase Contract
Settlement Date, shall furnish a current prospectus and/or prospectus
supplement to be used in such Remarketing by the remarketing underwriter or
underwriters under the Remarketing Underwriting Agreement, and shall pay all
expenses relating thereto.
Section 7. Conditions to the Remarketing Agent's Obligations.
(a) The obligations of the Remarketing Agent and any other remarketing
underwriters to purchase and remarket the Preferred Securities or the
Debentures, as the case may be, shall be subject to the terms and conditions of
the Remarketing Underwriting Agreement.
(b) If at any time during the term of this Agreement, any
Indenture Event of Default or Declaration Event of Default, or event that with
the passage of time or the giving of notice or both would become an Indenture
Event of Default or Declaration Event of Default, has occurred and is
continuing under the Indenture or the Declaration, then the obligations and
duties of the Remarketing Agent under this Agreement shall be suspended until
such default or event has been cured. The Company will cause the Indenture
Trustee and the Institutional Trustee to give the Remarketing Agent notice of
all such defaults and events of which the Trustee is aware.
Section 8. Termination of Remarketing Agreement. This
Agreement shall terminate as to the Remarketing Agent on the effective date of
its replacement pursuant to Section 4(a) hereof or pursuant to Section 4(b)
hereof. Notwithstanding any such termination, the obligations set forth in
Section 3 hereof shall survive and remain in full force and effect until all
amounts payable under said Section 3 shall have been paid in full.
4
Section 9. Remarketing Agent's Performance; Duty of Care. The
duties and obligations of the Remarketing Agent hereunder shall be determined
solely by the express provisions of this Agreement and the Remarketing
Underwriting Agreement.
Section 10. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
Section 11. Term of Agreement. Unless otherwise terminated in
accordance with the provisions hereof and except as otherwise provided herein,
this Agreement shall remain in full force and effect from the date hereof until
the first day thereafter on which no Preferred Securities are outstanding.
Section 12. Successors and Assigns. The rights and
obligations of the Company hereunder may not be assigned or delegated to any
other person without the prior written consent of Merrill Lynch as the
Remarketing Agent and/or as the Reset Agent. The rights and obligations of
Merrill Lynch as the Remarketing Agent and/or as the Reset Agent hereunder may
not be assigned or delegated to any other person without the prior written
consent of the Company. This Agreement shall inure to the benefit of and be
binding upon the Company and Merrill Lynch as the Remarketing Agent and/or as
the Reset Agent and their respective successors and assigns. The terms
"successors" and "assigns" shall not include any purchaser of Securities merely
because of such purchase.
Section 13. Headings. Section headings have been inserted in
this Agreement as a matter of convenience of reference only, and it is agreed
that such section headings are not a part of this Agreement and will not be
used in the interpretation of any provision of this Agreement.
Section 14. Severability. If any provision of this Agreement
shall be held or deemed to be or shall, in fact, be invalid, inoperative or
unenforceable as applied in any particular case in any or all jurisdictions
because it conflicts with any provisions of any constitution, statute, rule or
public policy or for any other reason, such circumstances shall not have the
effect of rendering the provision in question invalid, inoperative or
unenforceable in any other case, circumstances or jurisdiction, or of
rendering any other provision or provisions of this Agreement invalid,
inoperative or unenforceable to any extent whatsoever.
Section 15. Counterparts. This Agreement may be executed in
counterparts, each of which shall be regarded as an original and all of which
shall constitute one and the same document.
Section 16. Amendments. This Agreement may be amended by any
instrument in writing signed by the parties hereto.
Section 17. Notices. Unless otherwise specified, any notices,
requests, consents or other communications given or made hereunder or pursuant
hereto shall be made in writing or transmitted by any standard form of
telecommunication, including telephone, telegraph or telecopy, and confirmed in
writing. All written notices and confirmations of notices by telecommunication
shall be deemed to have been validly given or made when delivered or mailed,
registered or certified mail, return receipt requested and postage prepaid. All
such notices, requests, consents or
5
other communications shall be addressed as follows: if to the Company, to
Cendant Corporation, 6 Sylvan Way, Parsippany, New Jersey 07054, Attention:
Eric J Bock, Vice President-Legal; if to the Remarketing Agent or Reset Agent
(if Merrill Lynch & Co. is the Remarketing Agent or the Reset Agent), to c/o
Merrill Lynch & Co. at Merrill Lynch World Headquarters, World Financial
Center, North Tower, New York, New York 10281, Attention: David Johnson,
Managing Director, with a copy to Shearman & Sterling, 399 Lexington Avenue,
New York, NY 10022, Attention: Robert Evans III, and if to the Purchase
Contract Agent, to The First National Bank of Chicago, Corporate Trust Services
Division, One First National Plaza, Suite 0126, Chicago, IL 60670-0126, or to
such other address as any of the above shall specify to the other in writing.
6
IN WITNESS WHEREOF, each of the Company and the Remarketing
Agent has caused this Agreement to be executed in its name and on its behalf by
one of its duly authorized officers as of the date first above written.
CENDANT CORPORATION
By: /s/ James E. Buckman
-----------------------------------
Name: James E. Buckman
Title: Senior Executive Vice President
and General Counsel
CENDANT CAPITAL I
By: /s/ James E. Buckman
-----------------------------------
Name: James E. Buckman
Title: Regular Trustee
CONFIRMED AND ACCEPTED:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: MERRILL LYNCH, PIERCE FENNER & SMITH
INCORPORATED
By: /s/ David Johnson
------------------------------------
Authorized Signatory
THE FIRST NATIONAL BANK OF CHICAGO, not
individually but solely as Purchase
Contract Agent and as attorney-in-fact for
the holders of the Purchase Contracts
By: /s/ Steve M. Husbands
-----------------------------------
Name: Steve M. Husbands
Title: Assistant Vice President
Exhibit A to
Remarketing Agreement
FORM OF REMARKETING UNDERWRITING AGREEMENT
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner, & Smith
Incorporated (the "Remarketing Underwriter") hereby agrees to purchase the
securities (the "Securities") as set forth in Schedule I hereto, that have been
tendered by the holders of the Income PRIDES for sale on February ____, 2001.
1. Definitions. Capitalized terms used and not defined in this
Agreement shall have the meanings assigned to them in the purchase contract
agreement (the "Purchase Contract Agreement"), the pledge agreement (the
"Pledge Agreement"), the underwriting agreement (the "Underwriting Agreement"),
the amended and restated declaration of trust (the "Declaration") and the
indenture (the "Indenture"), each as identified in Schedule I hereto.
2. Registration Statement and Prospectus. If required (in the
opinion of counsel to either the Remarketing Underwriter or the Company) by
applicable law, the Company and the Trust have filed with the Securities and
Exchange Commission, and there has become effective, a registration statement
on Form S-3 (No. 333-45227), including a prospectus, relating to the
Securities. Such registration statement, as amended to the date of this
Agreement, is hereinafter referred to as the "Registration Statement", the
prospectus included in the Registration Statement is hereinafter referred to as
the "Basic Prospectus" and the Basic Prospectus, as amended or supplemented to
the date of this Agreement to relate to the Securities and to the remarketing
of the Securities, is hereinafter referred to as the "Final Prospectus"
(including in each case all documents incorporated by reference).
3. Provisions Incorporated by Reference.
(a) Subject to Section 3(b), the provisions of the following
sections of the Underwriting Agreement shall be incorporated in their entirety
into this Agreement and made applicable to the obligations of the Remarketing
Underwriter, except as explicitly amended hereby:
Sections 1, 3, 4, 5, 6 and 7.
(b) With respect to the provisions of the Underwriting
Agreement incorporated herein, for the purposes hereof, (i) all references
therein to the "Underwriter" or "Underwriters" or the "Representative" or
"Representatives", as the case may be, shall be deemed to refer to the
Remarketing Underwriter; (ii) all references therein to the "Securities" which
are the subject thereof shall be deemed to refer to the Securities as defined
herein; (iii) all references therein to the "date hereof" shall be deemed to
refer to the date of this Remarketing Underwriting Agreement and all references
therein to the "Closing Date" shall be deemed to refer to the Remarketing
Closing Date specified in Schedule I hereto (the "Remarketing Closing Date");
(iv) all references therein to the "Registration Statement" the "Basic
Prospectus" and the "Final Prospectus" shall be deemed to refer to the
Registration Statement, the Basic Prospectus and the Final Prospectus,
respectively, as defined herein; (v) reference to "Securities" and "Shares" in
Section 3(m) thereof is stricken and replaced with either the words "Preferred
Securities" or "Debentures", as applicable; (vi) Sections 3(a) and 3(i)
thereof are stricken in their entirety; (vii) Section 5(b)(5) is stricken in
its entirety; and (viii) Section 5(j) thereof is stricken in its entirety.
4. Purchase and Sale; Remarketing Underwriting Fee. Subject to
the terms and conditions and in reliance upon the representations and
warranties herein set forth or incorporated herein, the Remarketing Underwriter
agrees to purchase from the registered holder or holders thereof in the manner
specified in Section 5 hereof, the principal amount of Securities set forth in
Schedule I hereto at a purchase price not less than 100% of such Securities,
aggregate stated liquidation amount or aggregate principal amount, as the case
may be, plus any accrued and unpaid distributions or interest, as applicable,
thereon. In connection therewith, the registered holder or holders thereof
agree, in the manner specified in Section 5 hereof, to pay to the Remarketing
Underwriter a Remarketing underwriting Fee equal to an amount not exceeding 25
basis points (.25%), from any amount received in connection from such
Remarketing in excess of the aggregate stated liquidation amount or aggregate
principal amount, as the case may be, of the Securities.
5. Delivery and Payment. Delivery of payment for the remarketed
Securities and payment of the Remarketing Underwriting Fee shall be made on the
Remarketing Closing Date at the location and time specified in Schedule I
hereto (or such later date not later than five business days after such date as
the Remarketing representatives shall designate), which date and time may be
postponed by agreement between the Remarketing Underwriter, the Company, the
Trust and the [registered holder or holders thereof]. Delivery of the
remarketed Securities and payment of the Remarketing [Underwriting] Fee shall
be made to the Remarketing Underwriter [to or upon the order of the [registered
holder or holders of the Remarketed Securities] by certified or official bank
check or checks drawn on or by a New York Clearing House bank and payable in
immediately available funds] [in immediately available funds by wire transfer
to an account or accounts designated by the [Company] [Trustee] [registered
holder or holders of the remarketed Securities]] or, if the remarketed
Securities are represented by a Global Security, by any method of transfer
agreed upon by the Remarketing Underwriter and the Depositary for the
Securities under the Declaration or Indenture, as applicable.
[It is understood that any registered holder or, if the Securities are
represented by a Global Security, any beneficial owner, that has an account at
the Remarketing Underwriter and tenders its Securities through such account
will not be required to pay any fee or commission to the Remarketing
Underwriter.]
If the Securities are not represented by a Global Security,
certificates for the Securities shall be registered in such names and
denominations as the Remarking Representatives may request not less than three
full business days in advance of the Remarketing Closing Date, and the Company,
the Trust and the [registered holder or holders thereof] agree to have such
certificates available for inspection, packaging and checking by the
Remarketing Underwriter in New York, New York not later than 1:00 p.m. on the
Business Day prior to the Remarketing Closing Date.
6. Notices. Unless otherwise specified, any notices, requests,
consents or other communications given or made hereunder or pursuant hereto
shall be made in writing or transmitted by any standard form of
telecommunication, including telephone, telegraph or telecopy, and confirmed in
writing. All written notices and confirmations of notices by telecommunication
shall be deemed to have been validly given or made when delivered or mailed,
registered or certified mail, return receipt
A-2
requested and postage prepaid. All such notices, requests, consents or other
communications shall be addressed as follows: if to the Company, to Cendant
Corporation, 6 Sylvan Way, Parsippany, New Jersey, 07054; if to the Remarketing
Agent or Reset Agent, to c/o Merrill Lynch & Co. at Merrill Lynch World
Headquarters, World Financial Center, North Tower, New York, New York 10281,
Attention: David Johnson, Managing Director, with a copy to Shearman &
Sterling, 399 Lexington Avenue, New York, New York 10022, Attention: Robert
Evans III; and if to the Purchase Contract Agent, to The First National Bank of
Chicago, Corporate Trust Services Division, One First National Plaza, Suite
0126, Chicago, IL 60670-0126, or to such other address as any of the above
shall specify to the other in writing.
A-3
EXHIBIT 5.1
CENDANT CORPORATION
6 Sylvan Way
Parsippany, New Jersey 07054
Phone: (973) 496-5331
496-7207
March 6, 1998
Eric J. Bock
Vice President-Legal
Cendant Corporation
6 Sylvan Way
Parsippany, New Jersey 07054
Ladies and Gentlemen:
I am acting as counsel for Cendant Corporation, a Delaware
corporation (the "Company"), and Cendant Capital I, a Delaware business trust
(the "Trust"), in connection with their filing with the Securities and Exchange
Commis sion (the "Commission") of a Registration Statement (File No. 333-45227)
on Form S-3 (the "Registration Statement") with respect to the Company's (i)
debentures (the "Debentures"), (ii) shares of common stock, $.01 par value per
share (collectively, the "Common Stock"), (iv) stock purchase contracts to
purchase the Common Stock (the "Stock Purchase Contracts") and (v) stock
purchase units, each representing ownership of a Stock Purchase contract and
Debentures, the Preferred Securities (as defined below) or debt obligations of
third parties, including U.S. Treasury Securi ties, securing the holder's
obligation to purchase the Common Stock under the stock Purchase Contract
("Stock Purchase Units"). The Registration Statement also relates to the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of preferred securities of the Trust (the "Preferred Securities") and
guarantee of the Preferred Securities by the Company (the "Preferred Securities
Guarantee"). Capitalized terms used but not defined herein are used as defined
in the Registration Statement.
This opinion is being delivered in accordance with the
requirements of Item 601(b)(5) of Regulation S-K under the Act.
In connection with this opinion, I have examined originals or
copies, certified or otherwise identified to my satisfaction, of (i) the
certificate of trust of the Trust, dated February 5, 1998, as filed with the
Secretary of State of the State of Delaware; (ii) the Declaration (including
the designation of the terms of the Preferred Securities annexed thereto); and
(iii) the Preferred Securities. I have also examined originals or copies,
certified or otherwise identified to our satisfaction, of such other documents,
certificates and records as we have deemed necessary or appropriate as a basis
for the opinions set forth herein.
In my examination, I have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submit ted to me as originals, the conformity to original documents
of all documents submitted to me as certified or photostatic copies and the
authenticity of the originals of such copies. In making my examination of
documents executed by parties other than the Trust, I have assumed that such
parties had the power, corporate or other, to enter into and perform all
obligations thereunder and have also assumed the due authorization by all
requisite action, corporate or other, and execution and delivery by such
parties of such documents and that such documents constitute valid and binding
obligations of such parties. In addition, I have assumed that the Declaration
and the Preferred Securities when executed, will be substantially in the form
reviewed by me. As to any facts material to the opinions expressed herein
which were not independently established or verified, I have relied upon oral
or written state ments and representatives of officers, trustees and other
representatives of the Company, the Trust and others.
I am admitted to the bar in the States of New York and New
Jersey, and I express no opinion as to the laws of any other jurisdiction.
Based on the above, upon and subject to the foregoing, I am
of the opinion that:
1. The Company is a corporation duly incorporate and
validly existing pursuant to the laws of the State
of Delaware.
2. The Debentures, the Common Stock, the Stock Purchase
Contracts and the Stock Purchase Units, which are
covered by the Registration Statement, when sold
will be legally issued by the Company, duly
authorized, fully paid and non-assessable and, in
the case of the Debentures, will constitute valid
and
2
binding obligations of the Company, enforceable
against the Company in accordance with their terms
except as such en forcement is subject to any
applicable bankruptcy insolvency, reorganization or
other laws relating to or affecting creditors'
rights generally and general principles of equity.
3. Upon issuance, the Preferred Securities Guarantee
will consti tute the legal, valid and binding
obligation of the Company, enforceable against the
Company in accordance with its terms, except as such
enforcement is subject to any applicable bankruptcy,
insolvency, reorganization or other law relating to
or affecting creditors' rights generally and general
principles of equity.
I hereby consent to the filing of this opinion with the
Commission as an exhibit to the Registration Statement. I also consent to the
use of my name under the heading "Legal Opinions" in the prospectus supplement
included in the Registra tion Statement. In giving this consent, I do not
thereby admit that I am within the category of persons whose consent is
required under Section 7 of the Act or the rules and regulations of the
Commission promulgated thereunder. This opinion is ex pressed as of the date
hereof unless otherwise expressly stated and I disclaim any undertaking to
advise you of any subsequent changes in the facts stated or assumed herein or
of any subsequent changes in applicable law.
Very truly yours,
/s/ Eric J. Bock
-----------------------------
Eric J. Bock
3
EXHIBIT 5.2
March 2, 1998
Cendant Corporation
Cendant Capital I
c/o Cendant Corporation
6 Sylvan Way
Parsippany, New Jersey 07054
Re: Cendant Corporation;
Cendant Capital I;
Registration Statement on Form S-3
-----------------------------------
Ladies and Gentlemen:
We have acted as special counsel to (1) Cendant Corporation
(the "Company"), a corporation organized under the laws of the State of
Delaware and (2) Cendant Capital I (the "Trust"), a statutory business trust
formed under the Business Trust Act of the State of Dela ware, in connection
with the preparation of a Registra tion Statement on Form S-3 (File No.
333-45227), filed by the Company and the Trust with the Securities and Ex
change Commission (the "Commission") on January 29, 1998 under the Securities
Act of 1933, as amended (the "Act"), Amendment No. 1 thereto filed with the
Commission on February 6, 1998, Amendment No. 2 thereto filed with the
Commission on February 17, 1998 and Amendment No. 3 thereto, filed with the
Commission on February 20, 1998 (such Registration Statement, as so amended,
being hereinafter referred to as the "Registration Statement") in connection
with the public offering of 29,900,000 FE LINE PRIDES(sm) by the Company and
2,300,000 Trust Origi nated Preferred Securities (the "Preferred Securities"),
having a stated liquidation amount per Preferred Security equal to $50,
representing a preferred undivided benefi cial interest in the assets of the
Trust.
Cendant Corporation
Cendant Capital I
March 2, 1998
Page 2
The Preferred Securities of the Trust are to be issued
pursuant to the Amended and Restated Declaration of Trust of the Trust (the
"Declaration"), dated as of February 24, 1998, among the Company, as sponsor,
Wilmington Trust Company, as the institutional trustee (in such capacity, the
"Institutional Trustee") and as the Delaware trustee, and Michael P. Monaco and
James E. Buckman as regular trustees.
This opinion is being delivered in accordance with the
requirements of Item 601(b)(5) of Regulation S-K under the Act.
In connection with this opinion, we have exam ined originals
or copies, certified or otherwise identi fied to our satisfaction, of (i) the
certificate of trust of the Trust, dated February 5, 1998, as filed with the
Secretary of State of the State of Delaware; (ii) the Declaration (including
the designation of the terms of the Preferred Securities annexed thereto); and
(iii) the Preferred Securities and specimen certificates thereof. We have also
examined originals or copies, certified or otherwise identified to our
satisfaction, of such other documents, certificates and records as we have
deemed necessary or appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photo static copies and the
authenticity of the originals of such copies. In making our examination of
documents executed by parties other than the Trust, we have assumed that such
parties had the power, corporate or other, to
Cendant Corporation
Cendant Capital I
March 2, 1998
Page 3
enter into and perform all obligations thereunder and have also assumed the due
authorization by all requisite action, corporate or other, and execution and
delivery by such parties of such documents and that such documents constitute
valid and binding obligations of such parties. As to any facts material to the
opinions expressed herein which were not independently established or verified,
we have relied upon oral or written statements and represen tations of
officers, trustees and other representatives of the Company, the Trust and
others.
Members of our firm are admitted to the bar in the States of
New York and Delaware, and we express no opinion as to the laws of any other
jurisdiction other than the laws of the State of Delaware.
Based upon and subject to the foregoing and to the other
qualifications and limitations set forth here in, we are of the opinion that
the Preferred Securities have been duly authorized for issuance and, when
issued, executed and authenticated in accordance with the terms of the
Declaration and delivered and paid for as contem plated by the prospectus
supplement included in the Registration Statement, will be validly issued,
fully paid and nonassessable, representing undivided beneficial interests in
the assets of the Trust. We bring to your attention, however, that the
Preferred Securities holders may be obligated, pursuant to the Declaration, to
(i) provide indemnity and/or security in connection with and pay taxes or
governmental charges arising from transfers of Preferred Securities and (ii)
provide security and indemnity in connection with the requests of or direc
tions to the Institutional Trustee to exercise its rights and powers under the
Declaration.
Cendant Corporation
Cendant Capital I
March 2, 1998
Page 4
We hereby consent to the filing of this opinion with the
Commission as an exhibit to the Registration Statement. We also consent to the
use of our name under the heading "Legal Matters" in the prospectus supplement
included in the Registration Statement. In giving this consent, we do not
thereby admit that we are within the category of persons whose consent is
required under Section 7 of the Act or the rules and regulations of the
Commission promulgated thereunder. This opinion is expressed as of the date
hereof unless otherwise express ly stated and we disclaim any undertaking to
advise you of any subsequent changes in the facts stated or assumed herein or
of any subsequent changes in applicable law.
Very truly yours,
/s/ Skadden, Arps, Slate,
Meagher & Flom, LLP
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM, LLP
March 2, 1998
Cendant Corporation
Cendant Capital I
c/o Cendant Corporation
6 Sylvan Way
Parsipanny, New Jersey 07054
Re: Offering of Trust Preferred Securities and FELINE
PRIDES(service mark) (Registration Statement No. 333-45227)
-----------------------------------------------------------
Ladies and gentlemen:
We have acted as tax counsel to Cendant Corporation, a corporation
organized under the laws of the state of Delaware (the "Company"), and Cendant
Capital I, a statutory business trust formed under the Business Trust Act of
the State of Delaware (the "Trust"), in connection with above-captioned
registration statement on Form S-3, as subsequently amended (the "Registration
Statement"), filed with the Securities and Exchange Commission (the
"Commission") for the purpose of registering (i) Trust Originated Preferred
Securities representing undivided beneficial interests in the assets of the
Trust (the "Preferred Securities"), (ii) Debentures issued by the Company to
the Trust in connection with the sale of the Preferred Securities (the
"Debentures"), and (iii) FELINE PRIDES(sm) consisting of (A) units (referred to
as Income PRIDES(sm)) initially comprised of stock purchase contracts (the
"Purchase Contracts") and beneficial ownership of Preferred Securities and (B)
units (referred to as Growth PRIDES(sm)) initially comprised of Purchase
Contracts and beneficial ownership of zero-coupon U.S. Treasury Securities, as
described in the Prospectus Supplement dated February 24, 1998, forming a part
of such Registration Statement (the "Prospectus Supplement").
Cendant Corporation
Cendant Capital I
March 2, 1998
Page 2
In rendering our opinion, we have participated in the preparation of
the Registration Statement and the Prospectus Supplement. Our opinion is condi-
tioned on, among other things, the initial and continuing accuracy of the
facts, information, covenants and representations set forth in the
Registration Statement, the Prospectus Supplement and certain other documents
and the statements and representations made by officers of the Company. In our
examination, we have assumed the genuineness of all signatures, the legal
capacity of natural persons, the authenticity of all documents submitted to us
as originals, the conformity to original documents of all documents submitted
to us as certified or photostatic copies and the authenticity of the originals
of such documents. We also have assumed that the transactions related to the
issuance of the Preferred Securities, the Debentures, and the FELINE PRIDES
will be consummated in the manner contemplated by the Registration Statement
and the Prospectus Supplement.
In rendering our opinion, we have considered the current provisions of
the Internal Revenue Code of 1986, as amended (the "Code"), Treasury
regulations promulgated thereunder, judicial decisions and Internal Revenue
Service rulings, all of which are subject to change, which changes may be
retroactively applied. A change in the authorities upon which our opinion is
based could affect our conclusions. There can be no assurance, moreover, that
any of the opinions expressed herein will be accepted by the Internal Revenue
Service or, if challenged, by a court.
Based solely upon the foregoing, we are of the opinion that, under
current United States federal income tax law:
(1) The Trust will be classified as a grantor trust and not as an
association taxable as a corporation for United States federal income
tax purposes;
(2) The Debentures will be classified as indebtedness of the Company for
United States federal income tax purposes, and the Company will be
Cendant Corporation
Cendant Capital I
March 2, 1998
Page 3
entitled to deduct interest and original issue discount (if any) with
respect to the Debentures; and
(3) Although the discussion set forth in the Prospectus Supplement under
the heading "CERTAIN FEDERAL INCOME TAX CONSEQUENCES" does not
purport to discuss all possible United States federal income tax
consequences of the purchase, ownership, and disposition of Preferred
Securities and FELINE PRIDES, such discussion constitutes, in all
material respects, a fair and accurate summary of the United States
federal income tax consequences of the purchase, ownership, and
disposition of Preferred Securities and FELINE PRIDES.
Except as set forth above, we express no opinion to any party as to
the tax consequences, whether federal, state, local, or foreign, of the
issuance of the Preferred Securities, the Debentures, or the FELINE PRIDES or
of any transaction related to or contemplated by such issuance. This opinion is
furnished to you solely for your benefit in connection with the offering of the
Preferred Securities and the FELINE PRIDES and is not to be used, circulated,
quoted or otherwise referred to for any other purpose or relied upon by any
other person without our prior written consent. We consent to the use of our
name under the heading "Legal Matters" in the Prospectus Supplement. We hereby
consent to the filing of this opinion with the Commission as Exhibit 8 to the
Registration Statement. In giving this consent, we do not thereby admit that we
are within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933 or the rules and regulations of the Commission
promulgated thereunder. This opinion is expressed as of the date hereof, unless
otherwise expressly stated, and we disclaim any undertaking to advise you of
any subsequent changes of the facts stated or assumed herein or any subsequent
changes in applicable law.
Very truly yours,
/s/ Skadden, Arps, Slate,
Meagher & Flom, LLP
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM, LLP
