EXHIBIT 4.3
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AMENDED AND RESTATED DECLARATION
OF TRUST
QUALCOMM FINANCIAL TRUST I
DATED AS OF FEBRUARY 25, 1997
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TABLE OF CONTENTS
Page
ARTICLE I INTERPRETATION AND DEFINITIONS............................................................. 2
SECTION 1.1 Definitions........................................................................ 2
ARTICLE II TRUST INDENTURE ACT....................................................................... 9
SECTION 2.1 Trust Indenture Act; Application................................................... 9
SECTION 2.2 Lists of Holders of Securities..................................................... 9
SECTION 2.3 Reports by the Property Trustee.................................................... 9
SECTION 2.4 Periodic Reports to Property Trustee............................................... 10
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............................................................................. 12
SECTION 3.1 Name............................................................................... 12
SECTION 3.2 Office............................................................................. 12
SECTION 3.3 Purpose............................................................................ 12
SECTION 3.4 Authority.......................................................................... 12
SECTION 3.5 Title to Property of the Trust..................................................... 13
SECTION 3.6 Powers and Duties of the Regular Trustees.......................................... 13
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees............................... 16
SECTION 3.8 Powers and Duties of the Property Trustee.......................................... 16
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee........................ 18
SECTION 3.10 Certain Rights of Property Trustee................................................ 20
SECTION 3.11 Delaware Trustee.................................................................. 22
SECTION 3.12 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................................................................................... 23
SECTION 4.1 Sponsor's Purchase of Common Securities............................................ 23
SECTION 4.2 Responsibilities of the Sponsor.................................................... 23
SECTION 4.3 Expenses........................................................................... 24
ARTICLE V TRUSTEES................................................................................... 25
SECTION 5.1 Number of Trustees................................................................. 25
SECTION 5.2 Delaware Trustee................................................................... 25
SECTION 5.3 Property Trustee; Eligibility...................................................... 26
SECTION 5.4 Certain Qualifications of Regular Trustees and Delaware Trustee
Generally.................................................................................. 26
SECTION 5.5 Regular Trustees................................................................... 27
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SECTION 5.6 Appointment, Removal and Resignation of Trustees................................... 27
SECTION 5.7 Vacancies among Trustees........................................................... 28
SECTION 5.8 Effect of Vacancies................................................................ 28
SECTION 5.9 Meetings........................................................................... 29
SECTION 5.10 Delegation of Power............................................................... 29
SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business....................... 29
ARTICLE VI DISTRIBUTIONS............................................................................. 30
SECTION 6.1 Distributions...................................................................... 30
ARTICLE VII ISSUANCE OF SECURITIES................................................................... 30
SECTION 7.1 General Provisions Regarding Securities............................................ 30
SECTION 7.2 Execution and Authentication....................................................... 30
SECTION 7.3 Form and Dating.................................................................... 31
SECTION 7.4 Registrar; Paying Agent; Conversion Agent.......................................... 33
SECTION 7.5 Paying Agent to Hold Money in Trust............................................... 34
SECTION 7.6 Replacement Securities............................................................ 34
SECTION 7.7 Outstanding Convertible Preferred Securities...................................... 34
SECTION 7.8 Convertible Preferred Securities in Treasury...................................... 34
SECTION 7.9 Temporary Securities.............................................................. 35
SECTION 7.10 Cancellation..................................................................... 35
ARTICLE VIII TERMINATION OF TRUST.................................................................... 35
SECTION 8.1 Termination of Trust............................................................... 35
ARTICLE IX TRANSFER OF INTERESTS..................................................................... 36
SECTION 9.1 General............................................................................ 36
SECTION 9.2 Transfer Procedures and Restrictions.............................................. 37
SECTION 9.3 Deemed Security Holders............................................................ 45
SECTION 9.4 Appointment of Successor Depositary................................................ 45
SECTION 9.5 Registration Rights................................................................ 45
ARTICLE X LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS....................... 46
SECTION 10.1 Liability......................................................................... 46
SECTION 10.2 Exculpation....................................................................... 47
SECTION 10.3 Fiduciary Duty.................................................................... 47
SECTION 10.4 Indemnification................................................................... 48
SECTION 10.5 Outside Businesses................................................................ 50
ARTICLE XI ACCOUNTING................................................................................ 51
SECTION 11.1 Fiscal Year....................................................................... 51
SECTION 11.2 Certain Accounting Matters........................................................ 51
SECTION 11.3 Banking........................................................................... 51
SECTION 11.4 Withholding....................................................................... 52
ARTICLE XII AMENDMENTS AND MEETINGS.................................................................. 52
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SECTION 12.1 Amendments........................................................................ 52
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.................. 54
ARTICLE XIII REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE................................ 55
SECTION 13.1 Representations and Warranties of Property Trustee................................ 55
SECTION 13.2 Representations and Warranties of Delaware Trustee................................ 55
ARTICLE XIV MISCELLANEOUS............................................................................ 56
SECTION 14.1 Notices........................................................................... 56
SECTION 14.2 Governing Law..................................................................... 57
SECTION 14.3 Intention of the Parties.......................................................... 57
SECTION 14.4 Headings.......................................................................... 57
SECTION 14.5 Successors and Assigns............................................................ 57
SECTION 14.6 Partial Enforceability............................................................ 57
SECTION 14.7 Counterparts...................................................................... 58
SECTION 14.8 Compliance Certificates and Opinions.............................................. 58
ANNEX I Terms of Securities...........................................I-1
EXHIBIT A-1 Form of Convertible Preferred Security Certificate...........A1-1
EXHIBIT A-2 Form of Common Security Certificate..........................A2-1
EXHIBIT B Specimen of Debenture.........................................B-1
EXHIBIT C Purchase Agreement............................................C-1
EXHIBIT D Form of Certificate for Exchange or Registration
of Transfer from Restricted Global Preferred
Security to Regulation S Global Preferred Security............D-1
EXHIBIT E Form of Certificate for Exchange or Registration
of Transfer from Regulation S Global Preferred
Security to Restricted Global Preferred Security .............E-1
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
QUALCOMM FINANCIAL TRUST I
February 25, 1997
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of February 25, 1997, by the Trustees (as defined herein), the
Sponsor (as defined herein), and the holders, from time to time, of undivided
beneficial interests in the assets of the Trust to be issued pursuant to this
Declaration;
WHEREAS, the Trustees and the Sponsor established QUALCOMM Financial
Trust I (the "Trust"), a trust under the Delaware Business Trust Act pursuant to
a Declaration of Trust dated as of February 7, 1997 (the "Original Declaration")
and a Certificate of Trust filed with the Secretary of State of the State of
Delaware on February 7, 1997, 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;
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 holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
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ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 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.
"Actual Knowledge" means, with respect to the Property Trustee's
knowledge of an occurrence, receipt by a Responsible Officer of the Property
Trustee of written notice of such occurrence from the Sponsor or Holders of at
least ten percent (10%) of the outstanding liquidation amount of the Securities.
"Additional Preferred Securities" has the meaning set forth in
paragraph 1(a) of Annex I.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent or Conversion Agent.
"Applicable Procedures" means the rules and procedures of the
Depositary, Euroclear, and CEDEL applicable to transfer or exchange of
beneficial interests in book-entry securities.
"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.
"Business Day" means any day other than a Saturday, Sunday or any other
day on which banking institutions in New York, New York or San Diego, California
are permitted or required by any applicable law to close.
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"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code Section 3801 et seq., as it may be amended from time to time, or
any successor legislation.
"Certificate" means a Common Security Certificate or a Preferred
Certificate.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Convertible Preferred Securities and in whose name or in the name of a
nominee of that organization shall be registered a Global Certificate and which
shall undertake to effect book entry transfers and pledges of the Convertible
Preferred Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means February 25, 1997.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" has the meaning set forth in Section 7.1.
"Common Securities Guarantee" means the guarantee agreement to be dated
as of February 25, 1997 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 officer, director, shareholder,
member, partner, employee, representative or agent of any Regular Trustee; or
(d) any officer, employee or agent of the Trust or its Affiliates.
"Conversion Agent" has the meaning set forth in Section 7.4.
"Convertible Preferred Securities Guarantee" means the guarantee
agreement to be dated as of February 25, 1997, of the Sponsor in respect of the
Convertible Preferred Securities.
"Convertible Preferred Security" has the meaning set forth in Section
7.1.
"Convertible Preferred Security Beneficial Owner" means, with respect
to a Book Entry Interest, a Person who is the beneficial owner of such Book
Entry Interest, as reflected on the books of the Clearing Agency, or on the
books of a Person maintaining an account with such Clearing Agency (directly as
a Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Corporate Trust Office" means the office of the Property Trustee at
which the corporate trust business of the Property Trustee shall, at any
particular time, be principally administered, which office
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at the date of execution of this Agreement is located at 1100 North Market
Street, 9th Floor, Wilmington, Delaware 19890.
"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 QUALCOMM Incorporated in its capacity as
issuer of the Debentures under the Indenture.
"Debenture Trustee" means Wilmington Trust Company, as trustee under
the Indenture until a successor is appointed thereunder, and thereafter means
such successor trustee.
"Debentures" means the series of Debentures to be issued by the
Debenture Issuer under the Indenture to be held by the Property Trustee, a
specimen certificate for such series of Debentures being attached hereto as
Exhibit B.
"Definitive Preferred Certificates" has the meaning set forth in
Section 7.3(d).
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Depositary" means DTC or any Clearing Agency appointed as a successor
to DTC pursuant to Section 9.4.
"Direct Action" has the meaning set forth 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.
"Effectiveness Period" has the meaning set forth in Section 9.5.
"Event of Default" in respect of the Securities means an Event of
Default (as defined in the Indenture) has occurred and is continuing in respect
of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Exchanged Global Preferred Security" has the meaning set forth in
Section 9.2(b).
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Fiscal Year" has the meaning set forth in Section 11.1.
"Global Certificate" has the meaning set forth in Section 7.3(c).
"Global Preferred Security" means a Restricted Global Preferred
Security or a Regulation S Global Preferred Security.
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"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"Indenture" means the Indenture dated as of February 25, 1997, between
the Debenture Issuer and the Debenture Trustee, pursuant to which the Debentures
are to be issued.
"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).
"Liquidated Damages" has the meaning set forth in Section 9.5.
"List of Holders" has the meaning set forth in Section 2.2(a).
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Convertible Preferred Securities or by the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a single
class or, as the context may require, Holders of outstanding Convertible
Preferred Securities or Holders of outstanding Common Securities voting
separately as a class, who are the record owners of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of the
Securities as set forth in Annex I.
"Offering Memorandum" has the meaning set forth in Section 3.6(b)(i).
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
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(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Trust, the Property Trustee or the Sponsor, and may be
an employee of any thereof, and who shall be acceptable to the Property
Trustee. Any Opinion of Counsel delivered with respect to compliance
with a condition or covenant provided for in this Trust Agreement shall
include:
(a) a statement that each individual signing the Opinion of
Counsel has read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each individual in rendering
the Opinion of Counsel;
(c) a statement that each individual 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
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
"Original Declaration" has the meaning set forth in the Recitals
hereto.
"Participant" has the meaning set forth in Section 7.3(c).
"Paying Agent" has the meaning set forth in Section 7.4.
"Payment Amount" has the meaning set forth in Section 6.1.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government, or any
agency or political subdivision thereof, or any other entity of whatever nature.
"PORTAL" has the meaning specified in Section 3.6(b)(iii).
"Preferred Certificate" means a certificate representing a Convertible
Preferred Security substantially in the form of Exhibit A-1.
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Property Trustee Account" has the meaning set forth in Section 3.8(c).
"Purchase Agreement" means the Purchase Agreement for the offering and
sale of Convertible Preferred Securities in the form of Exhibit C.
"QIB" means a "qualified institutional buyer," as defined in Rule 144A.
"Quorum" means a majority of the Regular Trustees or, if there are only
two Regular Trustees, both of them.
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"Registrable Securities" has the meaning set forth in Section 9.5.
"Registrar" has the meaning set forth in Section 7.4.
"Registration Default" has the meaning set forth in Section 9.5.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of February 25, 1997.
"Regular Trustee" has the meaning set forth in Section 5.1.
"Regulation S" has the meaning set forth in Section 7.3(b).
"Regulation S Global Preferred Securities" has the meaning set forth in
Section 7.3(b).
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property Trustee, any
officer within the Corporate Trust Office of the Property 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 Property Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Restricted Definitive Preferred Security" has the meaning set forth in
Section 7.3(d).
"Restricted Global Preferred Security" has the meaning set forth in
Section 7.3(a).
"Restricted Period" has the meaning set forth in Section 7.3(b).
"Restricted Preferred Security" means a Restricted Definitive Preferred
Security or a Restricted Global Preferred Security.
"Restricted Securities Legend" has the meaning set forth in Section
9.2(j).
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities" means the Common Securities and the Convertible Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended from time
to time or any successor legislation.
"Special Event" has the meaning set forth in Annex I hereto.
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"Securities Guarantees" means the Common Securities Guarantee and the
Convertible Preferred Securities Guarantee.
"Shelf Registration Statement" has the meaning set forth in Section
9.5.
"Sponsor" means QUALCOMM Incorporated, a Delaware corporation, or any
successor entity in a merger, consolidation or amalgamation, in its capacity as
sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section
5.6(b)(ii).
"Successor Entity" has the meaning set forth in Section 3.15.
"Successor Property Trustee" has the meaning set forth in Section 5.6.
"Successor Securities" has the meaning set forth in Section 3.15(i)(b).
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I hereto.
"10% in liquidation amount of the Securities" means, except as provided
in the terms of the Convertible Preferred Securities or by the Trust Indenture
Act, Holder(s) of outstanding Securities voting together as a single class or,
as the context may require, Holders of outstanding Convertible Preferred
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of 10% or more of the aggregate liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined) of all outstanding Securities of
the relevant class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trust" means QUALCOMM Financial Trust I, a trust created under the
Delaware Business Trust Act.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Unrestricted Definitive Preferred Security" means a Convertible
Preferred Security in definitive, fully registered form without distribution
coupons, that does not bear the Restricted Securities Legend and is free from
any restriction on transfer (other than any such restriction attributable solely
to any Holder's status).
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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 Property Trustee shall be the only Trustee which is a Trustee
for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 LISTS OF HOLDERS OF SECURITIES.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Property Trustee (i) semiannually, not later than March 31 and
September 30 of each year, a list, in such form as the Property Trustee may
reasonably require, of the names and addresses of the Holders of the Securities
("List of Holders") as of a date not more than 15 days prior to the delivery
thereof, and (ii) at any other time within 30 days of receipt by the Trust of a
written request for a List of Holders as of a date no more than 15 days before
such List of Holders is given to the Preferred Guarantee Trustee; provided,
however, 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
Property Trustee by or on behalf of the Sponsor and the Regular Trustees on
behalf of the Trust, and in the absence of the provision of any such List of
Holders to the Property Trustee, then notice shall be deemed to have been given
to the Property Trustee that the List of Holders has not changed since the most
recent List of Holders. The Property Trustee shall preserve, in as current a
form as is reasonably practicable, all information contained in Lists of Holders
given to it or which it receives in the capacity as Registrar or Paying Agent
(if acting in such capacity), provided, however, that the Property Trustee may
destroy any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Property Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 REPORTS BY THE PROPERTY TRUSTEE.
Within 60 days after May 15 of each year, the Property Trustee shall
provide to the Holders of the Convertible Preferred Securities such reports as
are required by Section 313 of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The Property
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
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SECTION 2.4 PERIODIC REPORTS TO PROPERTY TRUSTEE.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any), for transmission to
Holders of the Convertible Preferred Securities as may be required by such
Section 314, and the compliance certificate required by Section 314 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 Property
Trustee is for informational purposes only and the Property Trustee's receipt of
such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Sponsor's compliance with any of its covenants hereunder (as to which the
Property Trustee is entitled to rely exclusively on Officers' Certificates).
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 Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) of the Trust Indenture Act 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 Convertible
Preferred Securities may, by vote, on behalf of the Holders of all of the
Convertible Preferred Securities, waive any past Event of Default in respect of
the Convertible Preferred Securities and its consequences, provided, however,
that, if the underlying Event of Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default
under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority
in principal amount of the holders of the Debentures (a "Super
Majority") to be waived under the Indenture, the Event of Default under
the Declaration may only be waived by the vote of the Holders of at
least the proportion in liquidation amount of the Convertible Preferred
Securities that the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) is hereby
expressly excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act. Upon such waiver, any such default shall cease to exist,
and any Event of Default with respect to the Convertible Preferred Securities
arising therefrom shall be deemed to have been cured, for every purpose of this
Declaration, but no such waiver shall extend to any subsequent or other default
or an Event of Default with respect to the Convertible Preferred Securities or
impair any right consequent thereon. Any waiver by the Holders of the
Convertible Preferred Securities of an Event of Default with respect to the
Convertible Preferred Securities shall also be deemed to constitute a waiver by
the Holders of the Common Securities of any such Event of Default with respect
to the Common Securities for all purposes of this Declaration without any
further act, vote, or consent of the Holders of the Common Securities.
10
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such Event
of Default under the Declaration as provided below in this Section
2.6(b), the Event of Default under the Declaration shall also not be
waivable; or
(ii) requires the consent or vote of a Super Majority to be
waived, except where the Holders of the Common Securities are deemed to
have waived such Event of Default under the Declaration as provided
below in this Section 2.6(b), the Event of Default under the
Declaration may only be waived by the vote of the Holders of at least
the proportion in liquidation amount of the Common Securities that the
relevant Super Majority represents of the aggregate principal amount of
the Debentures outstanding;
provided, however, 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 Convertible Preferred Securities have been cured, waived or
otherwise eliminated, and until such Events of Default have been so cured,
waived or otherwise eliminated, the Property Trustee will be deemed to be acting
solely on behalf of the Holders of the Convertible Preferred Securities and only
the Holders of the Convertible Preferred Securities will have the right to
direct the Property Trustee in accordance with the terms of the Securities. The
foregoing provisions of this Section 2.6(b) shall be in lieu of Sections
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such Sections
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act. Subject to the foregoing provisions of this Section 2.6(b), upon
such waiver, any such default shall cease to exist and any Event of Default with
respect to the Common Securities arising therefrom shall be deemed to have been
cured for every purpose of this Declaration, but no such waiver shall extend to
any subsequent or other default or Event of Default with respect to the Common
Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the Property
Trustee at the direction of the Holders of the Convertible Preferred Securities
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) is
hereby expressly excluded from this Declaration and the Securities, as permitted
by the Trust Indenture Act.
SECTION 2.7 EVENT OF DEFAULT; NOTICE.
(a) The Property Trustee shall, within 90 days after the occurrence of
an Event of Default, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all defaults with respect to the
Securities actually known to a Responsible Officer of the Property Trustee,
unless such defaults have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 2.7(a) being hereby defined to be an
Event of Default as defined in the Indenture, not including any periods of grace
provided for therein and irrespective of the giving of any notice provided
therein); provided that, except for a default in the payment of principal of (or
premium, if any) or interest on any
11
of the Debentures or in the payment of any sinking fund installment established
for the Debentures, the Property Trustee shall be protected in withholding such
notice if and so long as a Responsible Officer of the Property Trustee in good
faith determines that the withholding of such notice is in the interests of the
Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 7.1(a) and (b) of the Indenture;
or
(ii) any default as to which the Property Trustee shall have
Actual Knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 NAME.
The Trust is named "QUALCOMM Financial Trust I" as such name may be
modified from time to time by the Regular Trustees following written notice to
the Holders of Securities. The Trust's activities may be conducted under the
name of the Trust or any other name deemed advisable by the Regular Trustees.
SECTION 3.2 OFFICE.
The address of the principal office of the Trust is c/o QUALCOMM
Incorporated, 6455 Lusk Boulevard, San Diego, California 92121-2779. On ten
Business Days' written notice to the Holders of 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 Securities and use the proceeds from such sale to acquire the Debentures,
and (b) except as otherwise limited herein, to engage in only those other
activities necessary, or incidental thereto. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, pledge any of its
assets, or otherwise undertake (or permit to be undertaken) any activity that
would cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.
SECTION 3.4 AUTHORITY.
Subject to the limitations provided in this Declaration and to the
specific duties of the Property 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
Property Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no Person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
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SECTION 3.5 TITLE TO PROPERTY OF THE TRUST.
Except as provided in Sections 3.6 and 3.8 with respect to the
Debentures and the Property Trustee Account or as otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of the
Trust, but shall have an undivided beneficial interest in the assets of the
Trust.
SECTION 3.6 POWERS AND DUTIES OF THE REGULAR TRUSTEES.
The Regular Trustees shall have the exclusive power, duty and authority
to cause the Trust to engage in the following activities (except to the extent
that the Sponsor has also been granted authority with respect to certain of such
activities pursuant to Section 4.2):
(a) to issue and sell the Convertible Preferred Securities and the
Common Securities in accordance with this Declaration; provided, however, that
the Trust may issue no more than one series of Convertible 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
Convertible Preferred Securities and Common Securities on the Closing Date and
one more simultaneous issuance of both Convertible Preferred Securities and
Common Securities solely to cover overallotments in connection with the sale of
the Convertible Preferred Securities;
(b) in connection with the issue and sale of the Convertible Preferred
Securities, at the direction of the Sponsor, to:
(i) execute, if necessary, an offering memorandum (the
"Offering Memorandum") in preliminary and final form prepared by the
Sponsor, relating to the offering and sale of Convertible Preferred
Securities to qualified institutional buyers in reliance on Rule 144A
under the Securities Act, to institutional "accredited investors" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act),
and outside the United States to non-U.S. persons in offshore
transactions in reliance on Regulation S under the Securities Act and
to execute and file with the Commission, at such time as determined by
the Sponsor, a registration statement filed on Form S-3 prepared by the
Sponsor, including any amendments thereto, relating to the resale of
Convertible Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be necessary, in order
to qualify or register all or part of the Convertible Preferred
Securities in any State or foreign jurisdiction in which the Sponsor
has determined to qualify or register such Convertible Preferred
Securities for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the Private Offerings, Resale and Trading through Automated
Linkages ("PORTAL") Market and, at such time as the Sponsor may
determine, to the New York Stock Exchange or any other national stock
exchange or the Nasdaq Stock Market's National Market for listing or
quotation of the Convertible Preferred Securities;
(iv) execute and deliver letters, documents, or instruments
with DTC relating to the Convertible Preferred Securities;
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(v) execute and file with the Commission, at such time as may
be determined by the Sponsor, a registration statement on Form 8-A,
including any amendments thereto, prepared by the Sponsor relating to
the registration of the Convertible Preferred Securities under Section
12(b) of the Exchange Act;
(vi) execute and enter into the Purchase Agreement,
Registration Rights Agreement and other related agreements providing
for the sale and resale of the Convertible Preferred Securities; and
(vii) 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 Convertible Preferred
Securities in any State in which the Sponsor has determined to qualify
or register such Convertible Preferred Securities for resale;
(c) to acquire the Debentures with the proceeds of the sale of the
Convertible Preferred Securities and the Common Securities; provided, however,
that the Regular Trustees shall cause legal title to the Debentures to be held
of record in the name of the Property Trustee for the benefit of the Holders of
the Convertible Preferred Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Property Trustee prompt written notice
of the occurrence of a Special Event; provided, however, that the Regular
Trustees shall consult with the Sponsor and provide notice to the Property
Trustee before taking or refraining from taking any Ministerial Action in
relation to a Special Event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Convertible 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;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry out any
of the purposes of the Trust;
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(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities of
any notice received from the Debenture Issuer of its election to defer payments
of interest on the Debentures by extending the interest payment period under the
Indenture;
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Convertible
Preferred Securities or to enable the Trust to effect the purposes for which the
Trust was created;
(p) 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 as set out in
this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes, provided that such action
does not adversely affect the interests of Holders; and
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Regular Trustees, on behalf of the
Trust.
The Regular Trustees must exercise the powers set forth in this Section
3.6 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Regular Trustees shall not take any action that
is inconsistent with the purposes and functions of the Trust set forth in
Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Property Trustee set forth in Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this Section
3.6 shall be reimbursed by the Sponsor.
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SECTION 3.7 PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES.
(a) The Trust shall not, and the Trustees (including the Property
Trustee) shall not, engage in any activity other than as required or authorized
by this Declaration. In particular, the Trust shall not and the Regular Trustees
and the Property Trustee shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to
vary the Trust assets or the terms of the Securities in any way
whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
(vii) other than as provided in this Declaration or Annex I,
(A) direct the time, method and place of exercising any trust 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, in the
case of each action described in Clause (A), (B), (C), or (D), the
Trust shall have received an opinion of counsel to the effect that, as
a result of such action, the Trust will not be classified other than as
a grantor trust for United States federal income tax purposes and each
holder of Securities will be treated as owning an individual beneficial
interest in the Debentures.
SECTION 3.8 POWERS AND DUTIES OF THE PROPERTY TRUSTEE.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of the
Holders of the Securities. The right, title and interest of the Property Trustee
to the Debentures shall vest automatically in each Person who may hereafter be
appointed as Property Trustee in accordance with Section 5.6. Such vesting and
cessation of title shall be effective whether or not conveyancing documents with
regard to the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
16
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Trustee Account") in the name of and under
the exclusive control of the Property Trustee on behalf of the Holders
of the Securities and, upon the receipt of payments of funds made in
respect of the Debentures held by the Property Trustee, deposit such
funds into the Property Trustee Account and make payments to the
Holders of the Convertible Preferred Securities and Holders of the
Common Securities from the Property Trustee Account in accordance with
Section 6.1. Funds in the Property Trustee Account shall be held
uninvested until disbursed in accordance with this Declaration. The
Property Trustee Account shall be an account that is maintained with a
banking institution the rating on whose long-term unsecured
indebtedness is at least equal to the rating assigned to the
Convertible Preferred Securities by a "nationally recognized
statistical rating organization", as that term is defined for purposes
of Rule 436(g)(2) under the Securities Act;
(ii) deposit the proceeds received by the Trust from the
original issuance, from time to time, of Convertible Preferred
Securities (including Additional Preferred Securities) and Common
Securities into the Property Trustee Account and, upon and in
accordance with the order of a Regular Trustee, use such funds to
purchase Debentures;
(iii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Convertible
Preferred Securities and the Common Securities to the extent the
Debentures are redeemed or mature; and
(iv) 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 or appropriate to effect
the distribution of the Debentures to Holders of Securities upon the
occurrence of certain Special Events arising from a change in law or a
change in legal interpretation or other specified circumstances
pursuant to the terms of the Securities.
(d) The Property Trustee shall take all actions and perform such duties
as may be specifically required of the Property Trustee pursuant to the terms of
the Securities.
(e) The Property Trustee shall take any Legal Action which arises out
of or in connection with an Event of Default of which the Property Trustee has
Actual Knowledge or the Property Trustee's duties and obligations under this
Declaration or the Trust Indenture Act; provided, however, that if an Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Debenture Issuer to pay interest or principal on the Debentures
on the date such interest or principal is otherwise payable (or in the case of
redemption, on the redemption date), then a Holder of Convertible Preferred
Securities may directly institute a proceeding for enforcement of payment to
such Holder of the principal of or interest on the Debentures having a principal
amount equal to the aggregate liquidation amount of the Convertible Preferred
Securities of such Holder (a "Direct Action") on or after the respective due
date specified in the Debentures. In connection with such Direct Action, the
rights of the Holders of the Common Securities will be subrogated to the rights
of such Holder of Convertible Preferred Securities to the extent of any payment
made by the Debenture Issuer to such Holder of Convertible Preferred Securities
in such Direct Action. In addition, if the Property Trustee fails to enforce its
rights under the Debentures (other than rights arising from an Event of Default
described in the immediately preceding sentence) for a period of 30 days after
any Holder of Convertible Preferred Securities shall have made a written request
to the Property Trustee to enforce such rights, such Holder of Convertible
Preferred Securities may, to the fullest extent permitted by law, institute a
Direct Action to enforce the Property Trustee's rights as holder of the
Debentures,
17
without first instituting any legal proceeding against the Property Trustee or
any other Person. Except as provided in the preceding sentences, the Holders of
Convertible Preferred Securities will not be able to exercise directly any other
remedy available to the holders of the Debentures.
(f) The Property Trustee shall not resign as a Trustee unless either:
(i) the Trust has been completely liquidated and the proceeds
of the liquidation distributed to the Holders of Securities pursuant to
the terms of the Securities; or
(ii) a Successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Property Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a holder of Debentures under the Indenture
and, if the Property Trustee has Actual Knowledge that an Event of Default has
occurred and is continuing, the Property Trustee shall, for the benefit of
Holders of the Securities, enforce its rights as holder of the Debentures
subject to the rights of the Holders pursuant to the terms of such Securities.
In no event, however, shall the Property Trustee, in its capacity as holder of
the Debentures, have the power to convert the Debentures.
(h) The Property Trustee may authorize one or more Paying Agents to pay
Distributions, redemption payments or liquidation payments on behalf of the
Trust with respect to all Securities and any such Paying Agent shall comply with
Section 317(b) of the Trust Indenture Act. Any Paying Agent may be removed by
the Property Trustee at any time and a successor Paying Agent or additional
Paying Agents may be appointed at any time by the Property Trustee.
(i) Subject to this Section 3.8, the Property Trustee shall have none
of the duties, liabilities, powers or the authority of the Regular Trustees set
forth in Section 3.6 and shall not be responsible for any actions taken by the
Regular Trustees or for monitoring compliance by the Regular Trustees of their
duties hereunder.
The Property Trustee must exercise the powers set forth in this Section
3.8 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Property Trustee shall not take any action that
is inconsistent with the purposes and functions of the Trust set out in Section
3.3.
SECTION 3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF THE PROPERTY
TRUSTEE.
(a) The Property Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Declaration and no implied covenants shall be read into this Declaration against
the Property Trustee. In case an Event of Default has occurred (that has not
been cured or waived pursuant to Section 2.6) of which a Responsible Officer of
the Property Trustee has Actual Knowledge, the Property Trustee shall exercise
such of the rights and powers vested in it by this Declaration, and use the same
degree of care and skill in their exercise, as a prudent person would exercise
or use under the circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
18
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Property
Trustee shall be determined solely by the express provisions
of this Declaration and the Property Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this Declaration,
and no implied covenants or obligations shall be read into
this Declaration against the Property Trustee; and
(B) in the absence of bad faith on the part of the
Property Trustee, the Property Trustee may conclusively rely,
as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Property Trustee and conforming to the
requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Property Trustee,
the Property Trustee shall be under a duty to examine the same
to determine whether or not, on their face, they conform to
the requirements of this Declaration, but shall otherwise have
no duty to determine the accuracy or completeness thereof or
whether the same comply with applicable laws;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in liquidation amount of the Securities relating to the time,
method and place of conducting any proceeding for any remedy available
to the Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Declaration or indemnity reasonably satisfactory to the Property
Trustee against such risk or liability is not reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and
the Property Trustee Account shall be to deal with such property in a
similar manner as the Property Trustee deals with similar property for
its own account, subject to the protections and limitations on
liability afforded to the Property Trustee under this Declaration and
the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of
the Debentures or the payment of any taxes or assessments levied
thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree
in writing with the Sponsor. Money held by the
19
Property Trustee need not be segregated from other funds held by it
except in relation to the Property Trustee Account maintained by the
Property Trustee pursuant to Section 3.8(c)(i) and except to the extent
otherwise required by law; and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the Property
Trustee be liable for any default or misconduct of the Regular Trustees
or the Sponsor.
SECTION 3.10 CERTAIN RIGHTS OF PROPERTY TRUSTEE.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document 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 an Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder,
the Property Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel of its
selection or other experts and the advice or opinion of such counsel
and experts with respect to legal matters or advice within the scope of
such experts' area of expertise shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion, such counsel may be counsel to the Sponsor or any of
its Affiliates, and may include any of its employees. The Property
Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of
competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration
at the request or direction of any Holder, unless such Holder shall
have provided to the Property Trustee security and indemnity,
reasonably satisfactory to the Property Trustee, against the costs,
expenses (including attorneys' fees and expenses and the expenses of
the Property Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by
the Property Trustee, provided that nothing
20
contained in this Section 3.10(a)(vi) shall be taken to relieve the
Property Trustee, upon the occurrence of an Event of Default, from its
obligations expressly created hereunder to exercise the rights and
powers vested in it by this Declaration;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Property Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents, custodians, nominees or attorneys and the Property
Trustee shall not be responsible for any misconduct or negligence on
the part of any agent or attorney appointed with due care by it
hereunder;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and
the signature of the Property Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Property
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Property Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Property Trustee shall deem it desirable to receive written
instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Property Trustee (i) may request
written instructions from the Holders of the Securities which
instructions may only be given by the Holders of the same proportion in
liquidation amount of the Securities as would be entitled to direct the
Property Trustee under the terms of the Securities in respect of such
remedy, right or action, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received,
and (iii) shall be protected in conclusively relying on or acting in or
accordance with such instructions;
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Declaration; and
(xii) the Property Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose any duty
or obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall be
construed to be a duty.
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SECTION 3.11 DELAWARE TRUSTEE.
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees or the Property Trustee described in this Declaration.
Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of Section 3807 of
the Business Trust Act.
SECTION 3.12 EXECUTION OF DOCUMENTS.
Except as otherwise required by the Business Trust Act, any 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 terminate on January 31, 2052.
SECTION 3.15 MERGERS.
The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, except pursuant to this Section
3.15. At the request of the Sponsor, with the consent of the Regular Trustees
and without the consent of the Property Trustee, the Delaware Trustee or the
Holders of the Convertible Preferred Securities, the Trust may merge with or
into, consolidate, amalgamate, be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to a trust organized as such
under the laws of any State ("Successor Entity"); provided, that (i) such
Successor Entity either (a) expressly assumes all of the obligations of the
Trust with respect to the Convertible Preferred Securities or (b) substitutes
for the Convertible Preferred Securities other securities having substantially
the same terms as the Convertible Preferred Securities (the "Successor
Securities") so long as the Successor Securities rank the same as the
Convertible Preferred Securities rank in priority with respect to Distributions
and payments upon liquidation, redemption and otherwise, (ii) the Sponsor
expressly appoints a trustee of such Successor Entity possessing the same powers
and duties as the Property Trustee as the holder of the Debentures, (iii) the
Successor Securities are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or other
organization on which the Convertible Preferred Securities are then listed, if
any, (iv) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not cause the Convertible Preferred Securities (including
any Successor Securities) to be downgraded by any nationally recognized
statistical-rating
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organization, (v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the Holders of the Convertible Preferred Securities (including
any Successor Securities) in any material respect, (vi) such Successor Entity
has a purpose identical to that of the Trust, (vii) prior to such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease the
Sponsor has received an Opinion of Counsel to the effect that (a) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the Holders of the
Convertible Preferred Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of the Holder's
interest in the new entity), (b) following such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease neither the Trust nor
such Successor Entity will be required to register as an Investment Company, and
(c) following such merger, consolidation, amalgamation or replacement, the Trust
or such Successor Entity will be treated as a grantor trust for United States
Federal income tax purposes and (viii) the Sponsor or any permitted successor or
assignee owns all of the Common Securities of such Successor Entity and
guarantees the obligations of such Successor Entity under the Successor
Securities at least to the extent provided by the Convertible Preferred
Securities Guarantee. Notwithstanding the foregoing, the Trust shall not, except
with the consent of Holders of 100% in liquidation amount of the Convertible
Preferred Securities, consolidate, amalgamate, merge with or into, be replaced
by or convey, transfer or lease its properties and assets substantially as an
entirety to any other Person or permit any other Person to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger, replacement, conveyance, transfer or lease would cause the
Trust or the 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 341,000 Common
Securities, being all of the Common Securities issued by the Trust on the
Closing Date and representing approximately 3% of the total capital of the Trust
after issuance of the Convertible Preferred Securities on the Closing Date. In
the event that any Additional Preferred Securities are issued by the Trust after
the Closing Date, the Sponsor will, concurrently with such issuance, purchase
additional Common Securities, at a purchase price for each Common Security equal
to the purchase price payable for each Additional Preferred Security as set
forth in the Purchase Agreement, in a number (not to exceed 68,050) equal to (x)
the number of Additional Preferred Securities issued, divided by (y) 0.97, and
multiplied by (z) 0.03, rounded up to the nearest whole number.
SECTION 4.2 RESPONSIBILITIES OF THE SPONSOR.
In connection with the issue and sale of the Convertible Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities (except to the extent that the Regular
Trustees have also been granted authority with respect to certain of such
activities pursuant to Section 3.6):
(i) to prepare the Offering Memorandum in preliminary and
final form, and to prepare for filing with the Commission and execute
on behalf of the Trust a shelf registration
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statement on Form S-3, including any amendments thereto, relating to
the resale of Convertible Preferred Securities;
(ii) to determine the States and foreign jurisdictions in
which to take appropriate action to qualify or register all or part of
the Convertible Preferred Securities in any jurisdiction in which the
Sponsor has determined to qualify or register for sale such Convertible
Preferred Securities and to do any and all such acts, other than
actions that must be taken by the Trust, and to advise the Trust of
actions it must take, and to prepare for execution and filing and
execute on behalf of the Trust any documents to be executed and filed
by the Trust, as the Sponsor deems necessary or advisable in order to
comply with the applicable laws of any such States and foreign
jurisdictions;
(iii) to prepare or cause to be prepared for filing and to
execute on behalf of the Trust, an application to PORTAL or any other
national stock exchange or the Nasdaq Stock Market's National Market
for listing or quotation of the Convertible Preferred Securities;
(iv) to prepare and execute on behalf of the Trust letters,
documents, or instruments for filing with DTC relating to the
Convertible Preferred Securities;
(v) to prepare for filing with the Commission, and to execute
on behalf of the Trust, at such time as may be determined by the
Sponsor, a registration statement on Form 8-A, including any amendments
thereto relating to the registration of the Convertible Preferred
Securities under Section 12(b) of the Exchange Act; and
(vi) to negotiate the terms of the Purchase Agreement,
Registration Rights Agreement and other related agreements providing
for the sale and resale of the Convertible Preferred Securities and to
execute such documents on behalf of the Trust.
SECTION 4.3 EXPENSES.
(a) The Sponsor shall be responsible for and shall pay for 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 of the Trust, the issuance and sale of the
Convertible Preferred Securities, the fees and expenses (including reasonable
counsel fees and expenses) of the Trustees, the costs and expenses for printing
and engraving and computing or accounting equipment, Paying Agent(s),
registrar(s), transfer agent(s), duplication, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the disposition of Trust assets).
(b) The Sponsor shall pay any and all taxes (other than withholding
taxes attributable to the Trust or its assets) and all liabilities, costs and
expenses with respect to such taxes of the Trust.
(c) The Sponsor's obligations under this Section 4.3 shall be for the
benefit of, and shall be enforceable by, the Property Trustee and any Person to
whom any such debts, obligations, costs, expenses and taxes are owed (a
"Creditor"), whether or not such Creditor has received notice hereof. The
Property Trustee and any such Creditor may enforce the Sponsor's obligations
under this Section 4.3 directly against the Sponsor and the Sponsor irrevocably
waives any right or remedy to require that the Property Trustee or any such
Creditor take any action against the Sponsor. The Sponsor agrees to
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execute such additional agreements as may be necessary or desirable in order to
give full effect to the provisions of this Section 4.3.
ARTICLE V
TRUSTEES
SECTION 5.1 NUMBER OF TRUSTEES.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor may,
by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, 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
satisfy the requirements for being a Delaware Trustee as provided in Section 5.2
(the "Delaware Trustee"); (2) there shall be at least one Trustee who is an
employee or officer of, or is affiliated with the Sponsor (each, a "Regular
Trustee"); and (3) one Trustee shall be the Property Trustee for so long as this
Declaration is required to qualify as an indenture under the Trust Indenture
Act, and such Trustee may also serve as Delaware Trustee if it meets the
applicable requirements.
SECTION 5.2 DELAWARE TRUSTEE.
If required by the Business Trust Act, one Trustee, which shall be 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 Property Trustee has its principal place
of business in the State of Delaware and otherwise meets the requirements of
applicable law, then the Property Trustee shall also be the Delaware Trustee and
Section 3.11 shall have no application.
The initial Delaware Trustee shall be:
Wilmington Trust Company.
In the event that a national banking association, with the name "First
Union Trust Company, National Association" or any other name, succeeds, as
contemplated, to all or substantially all the corporate trust business of First
Union Bank of Delaware, such successor entity shall automatically be deemed to
be the Delaware Trustee, effective as of the consummation of such succession,
with the same effect as if it had executed this Declaration on the Closing Date,
upon delivery to the Sponsor and the Regular Trustees of an instrument, in form
and substance reasonably satisfactory to the Sponsor and the Regular Trustees,
accepting the responsibilities hereunder as Delaware Trustee and agreeing to be
bound by all of the provisions hereof applicable to the Delaware Trustee, and
thereupon First Union
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Bank of Delaware will automatically be deemed to have resigned as the Delaware
Trustee, effective as of the consummation of such succession.
SECTION 5.3 PROPERTY TRUSTEE; ELIGIBILITY.
(a) There shall at all times be one Trustee which shall act as Property
Trustee which shall:
(i) not be an Affiliate of the 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 Person permitted by the Commission
to act as an institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by federal,
state, territorial or District of Columbia authority. If such Person
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.
(b) If at any time the Property Trustee shall cease to be eligible to
so act under Section 5.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 5.6(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in Section 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of such Section 310(b).
(d) The Convertible Preferred Securities Guarantee shall be deemed to
be specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be: Wilmington Trust Company.
SECTION 5.4 CERTAIN QUALIFICATIONS OF REGULAR TRUSTEES AND DELAWARE
TRUSTEE GENERALLY.
Each Regular Trustee and the Delaware Trustee (unless the Property
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
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SECTION 5.5 REGULAR TRUSTEES.
The initial Regular Trustees shall be:
Irwin Mark Jacobs
Harvey P. White
Anthony S. Thornley
(a) Except as 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 which the Regular Trustees
have power and authority to cause the Trust to execute pursuant to Section 3.6.
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 Property Trustee shall not be removed
in accordance with Section 5.6(a) until a successor Property Trustee (the
"Successor Property Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Property Trustee
and delivered to the Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 5.6(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections
5.2 and 5.4 (a "Successor Delaware Trustee") has been appointed and has
accepted such appointment by written instrument executed by such
Successor Delaware Trustee and delivered to the Regular Trustees and
the Sponsor.
(c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, removal or resignation. Any
Trustee may resign from office (without need
27
for prior or subsequent accounting) by an instrument in writing signed by the
Trustee and delivered to the Sponsor and the Trust, which resignation shall take
effect upon such delivery or upon such later date as is specified therein;
provided, however, that:
(i) No such resignation of the Trustee that acts as the
Property Trustee shall be effective:
(A) until a Successor Property Trustee has been
appointed and has accepted such appointment by instrument
executed by such Successor Property Trustee and delivered to
the Trust, the Sponsor and the resigning Property Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed to
the holders of the Securities; and
(ii) subject to the provisions of the last paragraph of
Section 5.2, no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware Trustee
has been appointed and has accepted such appointment by instrument
executed by such Successor Delaware Trustee and delivered to the Trust,
the Sponsor and the resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Delaware Trustee or Successor Property Trustee
as the case may be if the Property Trustee or the Delaware Trustee delivers an
instrument of resignation in accordance with this Section 5.6.
(e) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.6 within 60 days after delivery of an instrument of resignation or removal,
the Property Trustee or Delaware Trustee resigning or being removed, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Property Trustee or Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper and
prescribe, appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
SECTION 5.7 VACANCIES AMONG TRUSTEES.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees, shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.6.
SECTION 5.8 EFFECT OF VACANCIES.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee in accordance with Section 5.6, the Regular Trustees in office,
regardless of their
28
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 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, however, that a Quorum is present, or without a meeting by 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 Person into which the Property Trustee or the Delaware Trustee, as
the case may be, may be merged or converted or with which either may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Property Trustee or the Delaware Trustee, as the case
may be, shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of the Property Trustee or the Delaware Trustee, as
the case may be, shall be the successor of the Property Trustee or the Delaware
Trustee, as the case may be, hereunder, provided, however, such Person shall be
otherwise qualified and eligible under this Article, without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
29
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 Convertible Preferred Securities and the Common Securities
in accordance with the preferences set forth in their respective terms. If and
to the extent that the Debenture Issuer makes a payment of interest (including
Compounded Interest, Additional Interest, and Liquidated Damages (as each such
term is defined in the Indenture)), premium and/or principal on the Debentures
held by the Property Trustee (the amount of any such payment being a "Payment
Amount"), the Property Trustee shall be, and hereby is directed, to the extent
funds are available for that purpose, to make a distribution (a "Distribution")
of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 GENERAL PROVISIONS REGARDING SECURITIES.
(a) The Regular Trustees shall on behalf of the Trust issue one class
of convertible preferred securities representing undivided beneficial interests
in the assets of the Trust having such terms as are set forth in Annex I (the
"Convertible Preferred Securities") and one class of convertible common
securities, representing undivided beneficial interests in the assets of the
Trust having such terms as are set forth in Annex I (the "Common Securities.")
The Trust shall issue no securities or other interests in the assets of the
Trust other than the Convertible Preferred Securities and the Common Securities.
The Trust shall issue no Securities in bearer form.
(b) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(c) Upon issuance of the Convertible Preferred Securities as provided
in this Declaration, the Convertible Preferred Securities so issued shall be
deemed to be validly issued, fully paid and non-assessable.
(d) Every Person, by virtue of having become a Holder or a Convertible
Preferred Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration and to have expressly assented and
agreed to the terms of the Indenture and the Convertible Preferred Securities
Guarantee.
(e) Convertible Preferred Securities sold other than in reliance on
Regulation S or to QIBs will be issued initially in minimum denominations of
5,000 Convertible Preferred Securities.
SECTION 7.2 EXECUTION AND AUTHENTICATION.
(a) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. In case any Regular Trustee of the Trust who shall have signed
any of the Securities shall cease to be such
30
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 Security, shall be the Regular Trustees of the
Trust, although at the date of the execution and delivery of the Declaration any
such person was not such a Regular Trustee.
(b) One Regular Trustee shall sign the Convertible Preferred Securities
for the Trust by manual or facsimile signature. Unless otherwise determined by
the Trust, such signature shall, in the case of Common Securities, be a manual
signature.
A Convertible Preferred Security Certificate shall not be valid until
authenticated by the manual signature of an authorized signatory of the Property
Trustee. The signature shall be conclusive evidence that the Convertible
Preferred Security Certificate has been authenticated under this Declaration.
Upon a written order of the Trust signed by one Regular Trustee, the
Property Trustee shall authenticate the Convertible Preferred Securities
Certificates for original issue.
The Property Trustee may appoint an authenticating agent acceptable to
the Trust to authenticate Convertible Preferred Securities Certificates. An
authenticating agent may authenticate Convertible Preferred Securities
Certificates whenever the Property Trustee may do so. Each reference in this
Declaration to authentication by the Property Trustee includes authentication by
such agent. An authenticating agent has the same rights as the Property Trustee
to deal with the Company or an Affiliate of the Company.
SECTION 7.3 FORM AND DATING.
The Convertible Preferred Securities Certificates and the Property
Trustee's certificate of authentication shall be substantially in the form of
Exhibit A-1 and the Common Securities Certificates shall be substantially in the
form of Exhibit A-2, each of which is hereby incorporated in and expressly made
a part of this Declaration. Certificates may be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof. The Securities
may have letters, numbers, notations or other marks of identification or
designation and such legends or endorsements required by law, stock exchange
rule, agreements to which the Trust is subject, if any, or usage (provided,
however, that any such notation, legend or endorsement is in a form acceptable
to the Trust). The Trust at the direction of the Sponsor shall furnish any such
legend not contained in Exhibit A-1 to the Property Trustee in writing. Each
Preferred Certificate shall be dated the date of its authentication. The terms
and provisions of the Securities set forth in Annex I and the forms of
Securities set forth in Exhibits A-1 and A-2 are part of the terms of this
Declaration and to the extent applicable, the Property Trustee and the Sponsor,
by their execution and delivery of this Declaration, expressly agree to such
terms and provisions and to be bound thereby.
(a) RESTRICTED GLOBAL PREFERRED SECURITIES. The Convertible Preferred
Securities are being offered and sold by the Trust pursuant to the Purchase
Agreement. Convertible Preferred Securities offered and sold in their initial
distribution to QIBs in reliance on Rule 144A, as provided in the Purchase
Agreement, shall be issued in the form of one or more permanent global
Securities in definitive, fully registered form without distribution coupons and
with the appropriate global legend and
31
Restricted Securities Legend set forth in Exhibit A-1 hereto (collectively, the
"Restricted Global Preferred Security"), which shall be deposited on behalf of
the purchasers of the Convertible Preferred Securities represented thereby with
the Property Trustee, at its Columbia, South Carolina office, as custodian for
the Depositary, and registered in the name of the Depositary or a nominee of the
Depositary, duly executed by the Trust and authenticated by the Property Trustee
as hereinafter provided. The number of Convertible Preferred Securities
represented by the Restricted Global Preferred Security may from time to time be
increased or decreased by adjustments made on the records of the Property
Trustee and the Depositary or its nominee as hereinafter provided.
(b) REGULATION S GLOBAL PREFERRED SECURITIES. Convertible Preferred
Securities offered and sold in their initial distribution in reliance on
Regulation S under the Securities Act ("Regulation S"), as provided in the
Purchase Agreement, shall be issued in the form of one or more permanent global
Securities in definitive, fully registered form without distribution coupons and
with the appropriate global legend and Restricted Securities Legend set forth in
Exhibit A-1 hereto (collectively, the "Regulation S Global Preferred Security"),
which shall be deposited on behalf of the purchasers of the Convertible
Preferred Securities represented thereby with the Property Trustee, at its
Columbia, South Carolina office, as custodian for the Depositary, and registered
in the name of the Depositary or a nominee of the Depositary, duly executed by
the Trust and authenticated by the Property Trustee as hereinafter provided, for
credit to the respective accounts at the Depositary of the depositories for
Morgan Guaranty Trust Company of New York, Brussels office, as operator of
Euroclear, or CEDEL. Until such time as the Restricted Period shall have
terminated, investors may hold beneficial interests in such Regulation S Global
Preferred Security only through Euroclear and CEDEL, unless delivery of such
beneficial interest shall be made through the Restricted Global Preferred
Security in accordance with the certification requirements set forth below in
Section 9.2(d). After the Restricted Period shall have terminated, such
certification requirements shall no longer be required for such transfers. As
used herein, the term "Restricted Period" means the period up to (but not
including) the 40th day following the later of (i) the date of the commencement
of the offering of the Convertible Preferred Securities and (ii) the last
original issuance date of the Convertible Preferred Securities. The number of
Convertible Preferred Securities represented by the Regulation S Global
Preferred Security may from time to time be increased or decreased by
adjustments made on the records of the Property Trustee and the Depositary or
its nominee as hereinafter provided.
(c) BOOK-ENTRY PROVISIONS. This Section 7.3(c) shall apply only to the
Restricted Global Preferred Security, the Regulation S Global Preferred Security
and such other Convertible Preferred Securities in global form as may be
authorized by the Trust to be deposited with or on behalf of the Depositary.
(i) The Trust shall execute and the Property Trustee shall, in
accordance with this Section 7.3, authenticate and make available for delivery
initially one or more certificates representing Restricted Global Preferred
Securities and one or more certificates representing Regulation S Global
Preferred Securities, each of which certificates (collectively, "Global
Certificates") (a) shall be registered in the name of Cede & Co. or other
nominee of the Depositary and (b) shall be delivered by the Property Trustee to
the Depositary or pursuant to the Depositary's written instructions or held by
the Property Trustee as custodian for the Depositary. Any other Global Preferred
Security authenticated under this Declaration shall be registered in the name of
the Depositary or a nominee thereof and delivered to such Depositary or a
nominee thereof or the Property Trustee or other custodian for the Depositary or
such nominee.
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(ii) Neither any members of, or participants in, the
Depositary ("Participants") nor any other Persons on whose behalf Participants
may act (including Euroclear and CEDEL and account holders and participants
therein) shall have any rights under this Declaration with respect to any Global
Preferred Security held on their behalf by the Depositary or by the Property
Trustee as the custodian of the Depositary or under such Global Preferred
Security, and the Depositary may be treated by the Trust, the Property Trustee
and any agent of the Trust or the Property Trustee as the absolute owner of such
Global Preferred Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Trust, the Property Trustee or any
agent of the Trust or the Property Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or
impair, as between the Depositary and its Participants, the operation of
customary practices of such Depositary governing the exercise of the rights of a
holder of a beneficial interest in any Global Preferred Security.
(d) CERTIFICATED SECURITIES. Convertible Preferred Securities sold
other than in reliance on Regulation S or to QIBs will be issued only in
definitive certificated form ("Definitive Preferred Certificates") and will be
issued initially in minimum denominations of 5,000 Convertible Preferred
Securities. Purchasers of Convertible Preferred Securities who are QIBs acting
on behalf of institutional "accredited investors" (as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act) and did not purchase Convertible
Preferred Securities in reliance on Regulation S under the Securities Act will
receive Convertible Preferred Securities in the form of individual certificates
in definitive, fully registered form without distribution coupons and with the
Restricted Securities Legend set forth in Exhibit A-1 hereto ("Restricted
Definitive Preferred Securities"). Restricted Definitive Preferred Securities
will bear the Restricted Securities Legend set forth on Exhibit A-1 unless
removed in accordance with Section 9.2.
SECTION 7.4 REGISTRAR; PAYING AGENT; CONVERSION AGENT.
The Trust shall establish or maintain in San Diego, California an
office or agency where Securities may be presented for registration of transfer
or exchange (the "Registrar"). In the event that the Convertible Preferred
Securities are not in book-entry only form, the Trust shall maintain in San
Diego, California an office or agency where the Convertible Preferred Securities
may be presented for payment ("Paying Agent). The Trust shall maintain an office
or agency where Securities may be presented for conversion ("Conversion Agent").
The Trust may appoint the Paying Agent and the Conversion Agent and may appoint
one or more additional paying agents and one or more additional conversion
agents in such other locations as it shall determine. The term "Paying Agent"
includes any additional paying agent and the term "Conversion Agent" includes
any additional conversion agent. The Trust may change any Paying Agent or
Conversion Agent without prior notice to any Holder. The Trust shall notify the
Property Trustee in writing of the name and address of any Agent not a party to
this Declaration. If the Trust fails to appoint or maintain another entity as
Paying Agent or Conversion Agent, the Property Trustee shall act as such. The
Trust or any of its Affiliates may act as Paying Agent or Conversion Agent. The
Trust shall act as Paying Agent and Conversion Agent for the Common Securities.
The Trust initially appoints the Property Trustee as Conversion Agent
for the Convertible Preferred Securities.
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SECTION 7.5 PAYING AGENT TO HOLD MONEY IN TRUST.
The Trust shall require each Paying Agent other than the Property
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Property Trustee all money held by the Paying Agent
for the payment of principal or distribution on the Securities, and will notify
the Property Trustee if there are insufficient funds. While any such
insufficiency continues, the Property Trustee may require a Paying Agent to pay
all money held by it to the Property Trustee. The Trust at any time may require
a Paying Agent to pay all money held by it to the Property Trustee and to
account for any money disbursed by it. Upon payment over to the Property
Trustee, the Paying Agent (if other than the Trust or an Affiliate of the Trust)
shall have no further liability for the money. If the Trust or the Sponsor or an
Affiliate of the Trust or the Sponsor acts as Paying Agent, it shall segregate
and hold in a separate trust fund for the benefit of the Holders all money held
by it as Paying Agent.
SECTION 7.6 REPLACEMENT SECURITIES.
If the holder of a Security claims that the Certificate representing
such Security has been lost, destroyed or wrongfully taken or if such
Certificate is mutilated and is surrendered to the Trust or in the case of the
Convertible Preferred Securities to the Property Trustee, the Trust shall issue
and the Property Trustee shall authenticate a replacement Certificate if the
Property Trustee's and the Trust's requirements, as the case may be, are met. If
required by the Property Trustee or the Trust, an indemnity bond must be
sufficient in the judgment of both to protect the Trustees, the Property
Trustee, the Sponsor or any authenticating agent from any loss which any of them
may suffer if a Certificate is replaced. The Company may charge for its expenses
in replacing a Certificate.
Every replacement Security is an additional obligation of the Trust.
SECTION 7.7 OUTSTANDING CONVERTIBLE PREFERRED SECURITIES.
The Convertible Preferred Securities outstanding at any time are all
the Convertible Preferred Securities represented by Preferred Certificates
authenticated by the Property Trustee except for those canceled by it, those
delivered to it for cancellation, and those described in this Section as not
outstanding.
If a Preferred Certificate is replaced, paid or purchased pursuant to
Section 7.6 hereof, it ceases to be outstanding unless the Property Trustee
receives proof satisfactory to it that the replaced, paid or purchased Preferred
Certificate is held by a bona fide purchaser.
If Convertible Preferred Securities are considered paid in accordance
with the terms of this Declaration, they cease to be outstanding and interest on
them ceases to accrue.
A Convertible Preferred Security does not cease to be outstanding
because one of the Trust, the Sponsor or an Affiliate of the Sponsor holds such
Security.
SECTION 7.8 CONVERTIBLE PREFERRED SECURITIES IN TREASURY.
In determining whether the Holders of the required amount of Securities
have concurred in any direction, waiver or consent, Convertible Preferred
Securities owned by the Trust, the Sponsor or an
34
Affiliate of the Sponsor, as the case may be, shall be disregarded and deemed
not to be outstanding, except that for the purposes of determining whether the
Property Trustee shall be fully protected in relying on any such direction,
waiver or consent, only Securities which the Property Trustee has Actual
Knowledge of being so owned shall be so disregarded.
SECTION 7.9 TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the Trust may
prepare and, in the case of the Convertible Preferred Securities, the Property
Trustee shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations that
the Trust considers appropriate for temporary Securities. Without unreasonable
delay, the Trust shall prepare and deliver to the Property Trustee Convertible
Preferred Securities in certificated form (other than in the case of Convertible
Preferred Securities in global form) and thereupon any or all temporary
Convertible Preferred Securities (other than any such Convertible Preferred
Securities in global form) may be surrendered in exchange therefor, at the
office of the Registrar, and the Property Trustee shall authenticate and deliver
an equal aggregate liquidation amount of definitive Convertible Preferred
Securities in certificated form in exchange for temporary Convertible Preferred
Securities (other than any such Convertible Preferred Securities in global
form). Such exchange shall be made by the Trust at its own expense and without
any charge therefor. Until so exchanged, temporary Securities shall in all
respects be entitled to the same benefits and subject to the same limitations
under this Declaration as Securities in definitive certificated form
authenticated (in the case of Convertible Preferred Securities) and delivered
hereunder.
SECTION 7.10 CANCELLATION.
The Trust at any time may deliver a Convertible Preferred Security to
the Property Trustee for cancellation. The Registrar, Paying Agent and
Conversion Agent shall forward to the Property Trustee any Convertible Preferred
Security surrendered to them for registration of transfer, redemption,
conversion, exchange or payment. The Property Trustee shall promptly cancel all
Preferred Certificates surrendered for registration of transfer, redemption,
conversion, exchange, payment, replacement or cancellation and shall dispose of
canceled Preferred Certificates as the Trust directs. The Trust may not issue
new Preferred Certificates to replace certificates representing Convertible
Preferred Securities that it has paid or that have been delivered to the
Property Trustee for cancellation or that any Holder has converted.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 TERMINATION OF TRUST.
(a) The Trust shall dissolve:
(i) upon the bankruptcy of the Holder of the Common Securities
or the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Holder of the Common Securities or the
Sponsor; the consent of a majority in liquidation amount of the
Securities voting together as a single class to file a certificate of
cancellation with
35
respect to the Trust; or the revocation of the charter of the Holder of
the Common Securities or the Sponsor and the expiration of 90 days
after the date of revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of
the Holder of the Common Securities, the Sponsor or the Trust;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the
Securities;
(v) upon the occurrence and continuation of a Special Event
pursuant to which the Trust shall have been dissolved in accordance
with the terms of the Securities and after satisfaction of all
liabilities to creditors (whether by payment or by making reasonable
provision for payment) all of the Debentures held by the Property
Trustee shall have been distributed to the Holders of Securities in
exchange for all of the Securities;
(vi) upon the distribution of the Common Stock (as defined in
Annex I) to Holders of all outstanding Securities upon conversion of
all such Securities;
(vii) the expiration of the term of the Trust on January 31,
2052; or
(viii) before the issuance of any Securities, 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), after satisfaction of all liabilities to creditors
(whether by payment or by making reasonable provision for payment) the Trustees
shall file a certificate of cancellation with the Secretary of State of the
State of Delaware and thereupon the Trust shall terminate.
(c) The provisions of Article X shall survive the termination of the
Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 GENERAL.
(a) When Convertible Preferred Securities are presented to the
Registrar or a co-registrar with a request to register a transfer or to exchange
them for an equal number of Convertible Preferred Securities represented by
different certificates, the Registrar shall register the transfer or make the
exchange if its requirements for such transactions are met. To permit
registrations of transfers and exchanges, the Trust shall issue and the Property
Trustee shall authenticate Preferred Certificates at the Registrar's request.
(b) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
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(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.
(d) 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 governmental charges that may be imposed
in relation to it. Upon surrender for registration of transfer of any
Certificates, 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 as
provided in Section 7.10. 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.
(e) The Trust shall not be required (i) to issue, register the transfer
of, or exchange, Convertible Preferred Securities during a period beginning at
the opening of business 15 days before the day of any selection of Convertible
Preferred Securities for redemption set forth in the terms and ending at the
close of business on the day of selection, or (ii) to register the transfer or
exchange of any Convertible Preferred Security so selected for redemption in
whole or in part, except the unredeemed portion of any Preferred Security being
redeemed in part.
SECTION 9.2 TRANSFER PROCEDURES AND RESTRICTIONS.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE PREFERRED CERTIFICATES. When
Definitive Preferred Certificates are presented to the Registrar or co-registrar
(x) to register the transfer of the Convertible Preferred Securities represented
thereby; or (y) to exchange such Convertible Preferred Securities for an equal
number of Convertible Preferred Securities of other authorized denominations,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Preferred Certificates surrendered for
transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Trust and
the Registrar or co-registrar, duly executed by the Holder thereof or
his attorney duly authorized in writing; and
(ii) in the case of Restricted Definitive Preferred
Securities, shall be accompanied by the following additional
information and documents, as applicable:
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(A) if such Restricted Preferred Securities are being
delivered to the Registrar by a Holder for
registration in the name of such Holder, without
transfer, a certification from such Holder to that
effect (substantially in the form set forth on the
reverse of the Definitive Preferred Certificate); or
(B) if such Restricted Preferred Securities are being
transferred to a QIB in accordance with Rule 144A, a
certification from such Holder to that effect
(substantially in the form set forth on the reverse
of the Definitive Preferred Certificate); or
(C) if such Restricted Preferred Securities are being
transferred (i) pursuant to an exemption from
registration in accordance with Rule 144 or
Regulation S, or (ii) pursuant to an effective
registration statement under the Securities Act, or
(iii) to an institutional "accredited investor"
within the meaning of Rule 501(a)(1), (2), (3), or
(7) under the Securities Act that is acquiring the
Restricted Preferred Securities for its own account,
or for the account of such an institutional
accredited investor, not with a view to or for offer
or sale in connection with any distribution in
violation of the Securities Act, or (iv) in reliance
on another exemption from the registration
requirements of the Securities Act, (X) a
certification from such Holder to that effect
(substantially in the form set forth on the reverse
of the Definitive Preferred Certificate), (Y) in the
case of clauses (i), (iii), and (iv) above, if the
Trust or the Registrar so requests, an opinion of
counsel reasonably acceptable to the Trust or the
Registrar, as the case may be, to the effect that
such transfer is in compliance with the Securities
Act, and (Z) in the case of clause (ii) above, a
certificate signed by a Regular Trustee to the effect
that a registration statement covering the sale of
such Restricted Preferred Securities is effective.
(b) TRANSFERS AFTER EFFECTIVENESS OF SHELF REGISTRATION STATEMENT.
After the effectiveness of a Shelf Registration Statement covering the resale of
Convertible Preferred Securities, Preferred Certificates representing
Convertible Preferred Securities transferred pursuant to such Shelf Registration
Statement in compliance with Section 9.2(a)(ii)(C)(ii) will no longer be
required to bear the Restricted Securities Legend, and beneficial interests in a
Convertible Preferred Security in global form without legends will be available
to transferees of Convertible Preferred Securities transferred pursuant to such
Shelf Registration Statement, upon exchange of the transferring Holder's
Restricted Definitive Preferred Certificate or directions to transfer such
Holder's beneficial interest in the Restricted Global Preferred Security, as the
case may be. No such transfer or exchange of a Restricted Definitive Preferred
Certificate or of an interest in the Restricted Global Preferred Security shall
be effective unless the transferor delivers to the Trust a certification (in the
applicable form set forth on the reverse of the Definitive Preferred
Certificate) as to compliance by such Person with the provisions of this
Declaration applicable to such transfer or exchange. After the effectiveness of
the Shelf Registration Statement, the Trust shall issue and the Property
Trustee, upon instruction from the Trust, shall authenticate a Preferred
Certificate in global form without the Restricted Securities Legend (the
"Exchanged Global Preferred Security") to deposit with the Depositary to
evidence (i) transfers of beneficial interests in the Restricted Global
Preferred Security that are thereafter exchanged for interests in such Exchanged
Global Preferred Security, and (ii) transfers of Restricted Definitive Preferred
Securities and Unrestricted Definitive Preferred Securities with respect to
which the transferee elects to take delivery in the form of beneficial interests
in such Exchanged Global Preferred Security, in each case subject to compliance
with the applicable provisions of this Declaration.
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(c) RESTRICTED GLOBAL PREFERRED SECURITY TO REGULATION S GLOBAL
PREFERRED SECURITY. If the holder of a beneficial interest in the Restricted
Global Preferred Security wishes at any time to transfer such interest to a
Person who wishes to take delivery thereof in the form of a beneficial interest
in the Regulation S Global Preferred Security, such transfer may be effected,
subject to the Applicable Procedures, only in accordance with this Section
9.2(c). Upon receipt by the Registrar of (i) written instructions given in
accordance with the Applicable Procedures from a Participant directing the
Registrar to credit or cause to be credited to a specified Participant's account
a beneficial interest in the Regulation S Global Preferred Security in a number
of Convertible Preferred Securities equal to that as to which a beneficial
interest in the Restricted Global Preferred Security is to be so transferred,
(ii) a written order given in accordance with the Applicable Procedures
containing information regarding the account of the Participant (and, if
applicable, the Euroclear or CEDEL account, as the case may be) to be credited
with, and the account of the Participant to be debited for, such beneficial
interest, and (iii) a certificate in substantially the form set forth in Exhibit
D given by the holder of such beneficial interest, the Registrar shall instruct
the Depositary to reduce the number of Convertible Preferred Securities
represented by the Restricted Global Preferred Security, and to increase the
number of Convertible Preferred Securities represented by the Regulation S
Global Preferred Security, by the number of Convertible Preferred Securities as
to which a beneficial interest in the Restricted Global Preferred Security is to
be so transferred, and to credit or cause to be credited to the account of the
Person specified in such instructions (which during the Restricted Period shall
be the Participant for Euroclear or CEDEL or both, as the case may be) a
beneficial interest in the Regulation S Global Preferred Security in a number of
Convertible Preferred Securities equal to that by which the Restricted Global
Preferred Security was reduced upon such transfer.
(d) REGULATION S GLOBAL PREFERRED SECURITY TO RESTRICTED GLOBAL
PREFERRED SECURITY. If, during the Restricted Period, the holder of a beneficial
interest in the Regulation S Global Preferred Security wishes to transfer such
interest to a Person who wishes to take delivery thereof in the form of a
beneficial interest in the Restricted Global Preferred Security, such transfer
may be effected, subject to the Applicable Procedures, only in accordance with
this Section 9.2(d). Upon receipt by the Registrar of (i) written instructions
given in accordance with the Applicable Procedures from a Participant directing
the Registrar to credit or cause to be credited to a specified Participant's
account a beneficial interest in the Restricted Global Preferred Security in a
number of Convertible Preferred Securities equal to that as to which a
beneficial interest in the Regulation S Global Preferred Security is to be so
transferred, (ii) a written order given in accordance with the Applicable
Procedures containing information regarding the account of the Participant (and,
if applicable, the Euroclear or CEDEL account, as the case may be) to be
credited with, and the account of the Participant to be debited for, such
beneficial interest, and (iii) a certificate in substantially the form set forth
in Exhibit E given by the holder of such beneficial interest, the Registrar
shall instruct the Depositary to reduce the number of Convertible Preferred
Securities represented by the Regulation S Global Preferred Security, and to
increase the number of Convertible Preferred Securities represented by the
Restricted Global Preferred Security, by the number of Convertible Preferred
Securities as to which a beneficial interest in the Regulation S Global
Preferred Security is to be so transferred, and to credit or cause to be
credited to the account of the Person specified in such instructions a
beneficial interest in the Restricted Global Preferred Security in a number of
Convertible Preferred Securities equal to that by which the Regulation S Global
Preferred Security was reduced upon such transfer.
(e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF A DEFINITIVE PREFERRED
CERTIFICATE FOR A BENEFICIAL INTEREST IN A GLOBAL PREFERRED SECURITY. A
Definitive Preferred Certificate may not be exchanged for a beneficial interest
in a Global Preferred Security except upon satisfaction of the requirements set
forth below. Upon receipt by the Property Trustee of a Definitive Preferred
39
Certificate, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Property Trustee, together with:
(i) if such Definitive Preferred Security is a Restricted
Preferred Security, certification, in the form set forth on the reverse
of the Preferred Certificate, that such Definitive Preferred Security
is being transferred to a QIB in accordance with Rule 144A under the
Securities Act; and
(ii) whether or not such Definitive Preferred Certificate is a
Restricted Preferred Security, written instructions directing the
Property Trustee to make, or to direct the Depositary to make, an
adjustment on its books and records with respect to such Global
Preferred Security to reflect an increase in the number of the
Preferred Securities represented by the Global Preferred Security,
then the Property Trustee shall cancel such Definitive Preferred Certificate and
cause, or direct the Depositary to cause, the aggregate number of Convertible
Preferred Securities represented by the Global Preferred Security to be
increased accordingly. If no Global Preferred Securities are then outstanding,
the Trust shall issue and the Property Trustee shall authenticate, upon written
order of any Regular Trustee, an appropriate number of Convertible Preferred
Securities in global form.
(f) TRANSFER AND EXCHANGE OF GLOBAL PREFERRED SECURITIES. The transfer
and exchange of Global Preferred Securities or beneficial interests therein
shall be effected through the Depositary, in accordance with this Declaration
(including applicable restrictions on transfer set forth herein, if any) and the
procedures of the Depositary therefor, which shall include restrictions on
transfer comparable to those set forth herein to the extent required by the
Securities Act.
(g) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL PREFERRED SECURITY
FOR A DEFINITIVE PREFERRED CERTIFICATE.
(i) Any Person having a beneficial interest in a Global
Preferred Security may upon request, and if accompanied by the
information specified below, exchange such beneficial interest for a
Definitive Preferred Certificate representing the same number of
Convertible Preferred Securities. Upon receipt by the Property Trustee
from the Depositary or its nominee on behalf of any Person having a
beneficial interest in a Global Preferred Security of written
instructions or such other form of instructions as is customary for the
Depositary or the Person designated by the Depositary as having such a
beneficial interest in a Restricted Preferred Security and the
following additional information and documents (all of which may be
submitted by facsimile):
(A) if such beneficial interest is being transferred to
the Person designated by the Depositary as being the
owner of a beneficial interest in a Global Preferred
Security, a certification from such Person to that
effect (substantially in the form set forth on the
reverse of the Definitive Preferred Certificate); or
(B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A, a certification
from the transferor to that effect (substantially in
the form set forth on the reverse of the Definitive
Preferred Certificate); or
40
(C) if such beneficial interest is being transferred (i)
pursuant to an exemption from registration in
accordance with Rule 144 or Regulation S, or (ii)
pursuant to an effective registration statement under
the Securities Act, or (iii) to an institutional
"accredited investor" within the meaning of Rule
501(a)(1), (2), (3), or (7) under the Securities Act
that is acquiring the Restricted Preferred Securities
for its own account, or for the account of such an
institutional accredited investor, not with a view to
or for offer or sale in connection with any
distribution in violation of the Securities Act, or
(iv) in reliance on another exemption from the
registration requirements of the Securities Act, (X)
a certification from the transferee or transferor to
that effect (substantially in the form set forth on
the reverse of the Definitive Preferred Certificate),
(Y) in the case of clauses (i), (iii), and (iv)
above, if the Trust or the Registrar so requests, an
opinion of counsel reasonably acceptable to the Trust
or the Registrar, as the case may be, to the effect
that such transfer is in compliance with the
Securities Act, and (Z) in the case of clause (ii)
above, a certificate signed by a Regular Trustee to
the effect that a registration statement covering the
sale of such Restricted Preferred Securities is
effective.
then the Property Trustee will cause, in accordance with the standing
instructions and procedures existing between the Depositary and the
Property Trustee, the aggregate principal amount of the Global
Preferred Security to be reduced on its books and records and,
following such reduction, the Trust will execute and the Property
Trustee will authenticate and deliver to the transferee a Definitive
Preferred Certificate.
(ii) Definitive Preferred Certificates issued in exchange for
a beneficial interest in a Global Preferred Security pursuant to this
Section 9.2(g) shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its
Participants or indirect participants or otherwise, shall instruct the
Property Trustee. The Property Trustee shall deliver such Definitive
Preferred Certificates to the Persons in whose names such Convertible
Preferred Securities are so registered in accordance with the
instructions of the Depositary.
(h) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL PREFERRED
SECURITIES. Notwithstanding any other provisions of this Declaration (other than
the provisions set forth in subsection (i) of this Section 9.2), a Global
Preferred Security may not be transferred as a whole except by the Depositary to
a nominee of the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.
(i) AUTHENTICATION OF DEFINITIVE PREFERRED CERTIFICATES IN ABSENCE OF
DEPOSITARY.
(i) If at any time:
(A) the Depositary notifies the Trust that the
Depositary is unwilling or unable to continue as Depositary
for the Global Preferred Securities or has ceased to be a
Clearing Agency registered under the Exchange Act, and a
successor Depositary for the Global Preferred Securities is
not appointed by the Trust at the direction of the Sponsor
within 90 days after delivery of such notice; or
41
(B) in the case of a Global Preferred Security held
for an account of Euroclear or CEDEL, Euroclear or CEDEL, as
the case may be, (A) is closed for business for a continuous
period of 14 days (other than by reason of statutory or other
holidays) or (B) announces an intention permanently to cease
business or does in fact do so; or
(C) the Trust (with the consent of the Sponsor)
notifies the Property Trustee in writing that it elects to
cause the issuance of Definitive Preferred Certificates under
this Declaration; or
(D) an Event of Default has occurred and is
continuing,
then the Trust will execute, and the Property Trustee, upon receipt of
a written order of the Trust signed by one Regular Trustee requesting
the authentication and delivery of Definitive Preferred Certificates to
the Persons designated by the Trust, will authenticate and deliver
Definitive Preferred Certificates, representing an aggregate number of
Convertible Preferred Securities equal to the aggregate number of
Convertible Preferred Securities represented by such Global Preferred
Securities, in exchange for such Global Certificates. Any Global
Preferred Security exchanged pursuant to clause (A), (B), or (C) above
shall be so exchanged in whole and not in part and any Global Security
exchanged pursuant to clause (D) above may be exchanged in whole or
from time to time in part as directed by the Depositary.
(ii) Definitive Preferred Certificates issued in exchange for
a Global Preferred Security or any portion thereof pursuant to
paragraph (i) above shall be registered in such names and be in such
authorized denominations as the Depositary shall designate and shall
bear any legends required hereunder. Any Global Preferred Security to
be exchanged in whole shall be surrendered by the Depositary to the
Registrar. With regard to any Global Preferred Security to be exchanged
in part, either such Global Preferred Security shall be so surrendered
for exchange or, if the Property Trustee is acting as custodian for the
Depositary or its nominee with respect to such Global Preferred
Security, the number of Convertible Preferred Securities represented
thereby shall be reduced, by an amount equal to the portion thereof to
be so exchanged, by means of an appropriate adjustment made on the
records of the Property Trustee. Upon any such surrender or adjustment,
the Property Trustee shall authenticate and make available for delivery
the Definitive Preferred Certificates issuable on such exchange to or
upon the written order of the Depositary or an authorized
representative thereof.
(j) LEGENDS.
(i) Until three (3) years after the later of the original
issuance date of any Restricted Preferred Security or the last date
that any Affiliate of the Trust was the owner of such Restricted
Preferred Security, any Certificate evidencing such Restricted
Preferred Security (and all securities issued in exchange therefor or
substitution thereof, other than Common Stock, if any, issued upon
conversion thereof which shall bear the legend set forth in the
Indenture) shall bear a legend (the "Restricted Securities Legend") in
substantially the following form (unless such Restricted Preferred
Security has been transferred pursuant to a registration statement that
has been declared effective under the Securities Act (and which
continues to be effective at the time of such transfer) or unless
otherwise agreed by the Trust in writing, with notice thereof to the
Registrar):
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THIS SECURITY (OR ITS PREDECESSOR), ANY CONVERTIBLE SUBORDINATED DEBT
SECURITY ISSUED IN EXCHANGE FOR THIS SECURITY, AND ANY COMMON STOCK ISSUED ON
CONVERSION THEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED,
SOLD, OR OTHERWISE TRANSFERRED WITHIN THE "UNITED STATES" OR TO OR FOR THE
ACCOUNT OR BENEFIT OF, "U.S. PERSONS" (AS DEFINED IN REGULATION S UNDER THE
SECURITIES ACT) IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS SECURITY, BY
ITS ACCEPTANCE HEREOF, REPRESENTS, ACKNOWLEDGES, AND AGREES FOR THE BENEFIT OF
THE ISSUER HEREOF THAT: (I) IT HAS ACQUIRED A "RESTRICTED SECURITY" THAT HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT; (II) IT WILL NOT OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS THREE YEARS AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH QUALCOMM
Incorporated (THE "COMPANY") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF
THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) (THE "RESALE RESTRICTION
TERMINATION DATE") EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS
AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7)
OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY APPLICABLE JURISDICTION; AND (III) IT WILL,
AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THIS
SECURITY OF THE RESALE RESTRICTIONS SET FORTH IN (II) ABOVE. ANY OFFER, SALE OR
OTHER DISPOSITION PURSUANT TO THE FOREGOING CLAUSE (D), (E) OR (F) IS SUBJECT TO
THE RIGHT OF THE ISSUER OF THIS SECURITY AND THE TRUSTEES FOR SUCH ISSUER (i) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM IN FORM AND SUBSTANCE, AND (ii) IN EACH
OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRANSFER AGENT. THIS
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LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE.
(ii) Any Certificate (or Security issued in exchange or substitution
therefor) as to which such restrictions on transfer shall have expired in
accordance with their terms or as to which the conditions for removal of the
foregoing legend as set forth therein have been satisfied may, upon surrender of
such Certificate for exchange to the Registrar in accordance with the provisions
of this Section 9.2, be exchanged for a new Certificate or Certificates, of like
tenor and aggregate number of Convertible Preferred Securities, which shall not
bear the Restricted Securities Legend.
(k) CANCELLATION OR ADJUSTMENT OF GLOBAL PREFERRED SECURITY. At such
time as all beneficial interests in a Global Preferred Security have either been
exchanged for Definitive Preferred Certificates to the extent permitted by this
Declaration or redeemed, repurchased or canceled in accordance with the terms of
this Declaration, such Global Preferred Security shall be returned to the
Depositary for cancellation or retained and canceled by the Property Trustee. At
any time prior to such cancellation, if any beneficial interest in a Global
Preferred Security is exchanged for Definitive Preferred Certificates,
Convertible Preferred Securities represented by such Global Preferred Security
shall be reduced and an adjustment shall be made on the books and records of the
Property Trustee (if it is then the Securities Custodian for such Global
Preferred Security) with respect to such Global Preferred Security, by the
Property Trustee or the Securities Custodian, to reflect such reduction.
(l) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF
CONVERTIBLE PREFERRED SECURITIES.
(i) To permit registrations of transfers and exchanges, the
Trust shall execute and the Property Trustee shall authenticate
Definitive Preferred Certificates and Global Preferred Certificates at
the Registrar's or co-registrar's request.
(ii) Registrations of transfers or exchanges will be effected
without charge, but only upon payment (with such indemnity as the Trust
or the Sponsor may require) in respect of any tax or other governmental
charge that may be imposed in relation to it.
(iii) Prior to the due presentation for registrations of
transfer of any Convertible Preferred Security, the Trust, the Property
Trustee, the Paying Agent, the Registrar or any co-registrar may deem
and treat the Person in whose name a Convertible Preferred Security is
registered as the absolute owner of such Convertible Preferred Security
for the purpose of receiving Distributions on such Convertible
Preferred Security and for all other purposes whatsoever, and none of
the Trust, the Property Trustee, the Paying Agent, the Registrar or any
co-registrar shall be affected by notice to the contrary.
(iv) All Convertible Preferred Securities issued upon any
transfer or exchange pursuant to the terms of this Declaration shall
evidence the same security and shall be entitled to the same benefits
under this Declaration as the Convertible Preferred Securities
surrendered upon such transfer or exchange.
(m) NO OBLIGATION OF THE PROPERTY TRUSTEE.
(i) The Property Trustee shall have no responsibility or
obligation to any beneficial owner of a Global Preferred Security, any
Participant in the Depositary or other Person with
44
respect to the accuracy of the records of the Depositary or its nominee
or of any Participant thereof, with respect to any ownership interest
in the Convertible Preferred Securities or with respect to the delivery
to any Participant, beneficial owner or other Person (other than the
Depositary) of any notice (including any notice of redemption) or the
payment of any amount, under or with respect to such Convertible
Preferred Securities. All notices and communications to be given to the
Holders and all payments to be made to Holders under the Convertible
Preferred Securities shall be given or made only to or upon the order
of the registered Holders (which shall be the Depositary or its nominee
in the case of a Global Preferred Security). The rights of beneficial
owners in any Global Preferred Security shall be exercised only through
the Depositary subject to the applicable rules and procedures of the
Depositary. The Property Trustee may conclusively rely and shall be
fully protected in relying upon information furnished by the Depositary
or any agent thereof with respect to its Participants and any
beneficial owners.
(ii) The Property Trustee and Registrar shall have no
obligation or duty to monitor, determine or inquire as to compliance
with any restrictions on transfer imposed under this Declaration or
under applicable law with respect to any transfer of any interest in
any Convertible Preferred Security (including any transfers between or
among Depositary Participants or beneficial owners in any Global
Preferred Security) other than to require delivery of such certificates
and other documentation or evidence as are expressly required by, and
to do so if and when expressly required by, the terms of this
Declaration, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
SECTION 9.3 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 Property Trustee,
Registrar, or a co-registrar shall have Actual Knowledge thereof.
SECTION 9.4 APPOINTMENT OF SUCCESSOR DEPOSITARY.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Convertible Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency to
act as Depositary with respect to such Convertible Preferred Securities.
SECTION 9.5 REGISTRATION RIGHTS.
The holders of the Convertible Preferred Securities, the Debentures,
the Convertible Preferred Securities Guarantee, and the shares of Common Stock
of the Company issuable upon conversion of the Debentures (collectively, the
"Registrable Securities") are entitled to the benefits of the Registration
Rights Agreement. Pursuant to the Registration Rights Agreement, the Company has
agreed for the benefit of the holders of Registrable Securities that (i) it
will, at its cost, within 90 days after the date of original issuance of the
Debentures, file a shelf registration statement (the "Shelf Registration
Statement") with the Commission with respect to the resales of the Registrable
Securities, (ii) it will use all reasonable efforts to cause such Shelf
Registration Statement to be declared effective by the
45
Commission as promptly as practicable and in no event later than 180 days after
the date of original issuance of the Debentures, and (iii) the Company will use
all reasonable efforts to maintain such Shelf Registration Statement
continuously effective under the Securities Act until the third anniversary of
the effectiveness of the Shelf Registration Statement or such earlier date as is
provided in the Registration Rights Agreement (the "Effectiveness Period").
If (i) on or prior to 90 days following the date of original issuance
of the Registrable Debentures, a Shelf Registration Statement has not been filed
with the Commission, or (ii) on or prior to the 180th day following the date of
original issuance of the Debentures, such Shelf Registration Statement is not
declared effective (each, a "Registration Default"), additional interest
("Liquidated Damages") will accrue on the Debentures from and including the day
following such Registration Default. Liquidated Damages will be paid quarterly
in arrears, with the first quarterly payment due on the first interest or
distribution payment date, as applicable, following the date on which such
Liquidated Damages begin to accrue, and will accrue at a rate per annum equal to
an additional one-quarter of one percent (0.25%) of the principal amount or
liquidation amount, as applicable, to and including the 90th day following such
Registration Default and one-half of one percent (0.50%) thereof from and after
the 91st day following such Registration Default. Upon (x) the filing of the
Shelf Registration Statement after the 90-day period described in clause (i)
above or (y) the effectiveness of the Shelf Registration Statement after the
180-day period described in clause (ii) above, the interest rate borne by the
Debentures from the date of such filing or effectiveness, as the case may be,
will be reduced to the interest rate then in effect on the Debentures.
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 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) be required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of the
debts and obligations of the Trust (other than with respect to the Securities)
to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the Holders
of the Convertible Preferred Securities shall be entitled to the same limitation
of personal liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of Delaware.
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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.
SECTION 10.3 FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Property Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(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:
47
(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 or not opposed to the best
interests of the Trust, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the Company Indemnified Person did not act in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or proceeding,
had reasonable cause to believe that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent permitted
by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in
its favor by reason of the fact that he is or was a Company Indemnified
Person against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement
of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of
the Trust and except that no such indemnification shall be made in
respect of any claim, issue or matter as to which such Company
Indemnified Person shall have been adjudged to be liable to the Trust
unless and only to the extent that the Court of Chancery of Delaware or
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of
all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such Court of Chancery or
such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full
extent permitted by law, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
48
(iv) 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.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i)
and (ii) of this Section 10.4(a) shall be paid by the Sponsor in
advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such Company
Indemnified Person to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the Sponsor as
authorized in this Section 10.4(a). Notwithstanding the foregoing, no
advance shall be made by the Debenture Issuer if a determination is
reasonably and promptly made (i) by the Regular Trustees by a majority
vote of a quorum of disinterested Regular Trustees, (ii) if such a
quorum is not obtainable, or, even if obtainable, if a quorum of
disinterested Regular Trustees so directs, by independent legal counsel
in a written opinion or (iii) the Common Security Holder of the Trust,
that, based upon the facts known to the Regular Trustees, counsel or
the Common Security Holder at the time such determination is made, such
Company Indemnified Person acted in bad faith or in a manner that such
person did not believe to be in or not opposed to the best interests of
the Trust, or, with respect to any criminal proceeding, that such
Company Indemnified Person believed or had reasonable cause to believe
his conduct was unlawful. In no event shall any advance be made in
instances where the Regular Trustees, independent legal counsel or
Common Security Holder reasonably determine that such person
deliberately breached his duty to the Trust or its Common or
Convertible Preferred Security Holders.
(vi) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other paragraphs of this Section
10.4(a) shall not be deemed exclusive of any other rights to which
those seeking indemnification and advancement of expenses may be
entitled under any agreement, vote of stockholders or disinterested
directors of the Sponsor or Convertible Preferred Security Holders of
the Trust or otherwise, both as to action in his official capacity and
as to action in another capacity while holding such office. All rights
to indemnification under this Section 10.4(a) shall be deemed to be
provided by a contract between the Debenture Issuer and each Company
Indemnified Person who serves in such capacity at any time while this
Section 10.4(a) is in effect. Any repeal or modification of this
Section 10.4(a) shall not affect any rights or obligations then
existing.
(vii) 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).
(viii) For purposes of this Section 10.4(a), references to
"the Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of
49
a constituent) absorbed in a consolidation or merger, so that any
person who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 10.4(a) with respect to the resulting or
surviving entity as he would have with respect to such constituent
entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided
by, or granted pursuant to, this Section 10.4(a) shall, unless
otherwise provided when authorized or ratified, continue as to a person
who has ceased to be a Company Indemnified Person and shall inure to
the benefit of the heirs, executors and administrators of such a
person.
(b) The Sponsor agrees to indemnify, to the fullest extent permitted by
law, the (i) Property Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of
the Property Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Property Trustee and the Delaware Trustee (each of the
Persons in (i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person harmless against,
any loss, liability or expense incurred without gross negligence (in the case of
the Property Trustee, negligence) or bad faith on its part, arising out of or in
connection with the acceptance or administration or the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 10.4(b)
shall survive the satisfaction and discharge of this Declaration.
SECTION 10.5 OUTSIDE BUSINESSES.
Any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee may engage in or possess an interest in other business ventures of any
nature or description, independently or with others, similar or dissimilar to
the business of the Trust, and the Trust and the Holders of Securities shall
have no rights by virtue of this Declaration in and to such independent ventures
or the income or profits derived therefrom, and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed wrongful
or improper. No Covered Person, the Sponsor, the Delaware Trustee, or the
Property Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered Person,
the Sponsor, the Delaware Trustee and the Property Trustee shall have the right
to take for its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.
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ARTICLE XI
ACCOUNTING
SECTION 11.1 FISCAL YEAR.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 CERTAIN ACCOUNTING MATTERS.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes. The books of account and the records
of the Trust shall be examined by and reported upon as of the end of each Fiscal
Year of the Trust by a firm of independent certified public accountants selected
by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Securities, within 90 days after the end of each Fiscal
Year of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss.
(c) The Regular Trustees shall cause to be duly prepared and delivered
to each of the Holders of Securities, any annual United States federal income
tax information statement, required by the Code, containing such information
with regard to the Securities held by each Holder as is required by the Code and
the Treasury Regulations. Notwithstanding any right under the Code to deliver
any such statement at a later date, the Regular Trustees shall endeavor to
deliver all such statements within 30 days after the end of each Fiscal Year of
the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed with
the appropriate taxing authority, an annual United States federal income tax
return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
SECTION 11.3 BANKING.
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Property Trustee shall be made directly to
the Property Trustee Account and no other funds of the Trust shall be deposited
in the Property Trustee Account. The sole signatories for such accounts shall be
designated by the Regular Trustees; provided, however, that the Property Trustee
shall designate the signatories for the Property Trustee Account.
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SECTION 11.4 WITHHOLDING.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed over withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 AMENDMENTS.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two
Regular Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the Property
Trustee;
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware
Trustee; and
(iv) if the amendment affects the rights, powers, duties,
obligations or immunities of the Sponsor, the Sponsor.
(b) No amendment shall be made, and any such purported amendment shall
be void and ineffective:
(i) unless, in the case of any proposed amendment,
the Property Trustee shall have first received an Officers'
Certificate from each of the Trust and the Sponsor that such
amendment is permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities);
(ii) unless, in the case of any proposed amendment
which affects the rights, powers, duties, obligations or
immunities of the Property Trustee, the Property Trustee shall
have first received:
52
(A) an Officers' Certificate from each of the Trust
and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the
terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Trust) that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the
terms of the Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be
classified for purposes of United States federal income
taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers
of the Property Trustee in contravention of the Trust
Indenture Act; or
(C) cause the Trust to be deemed to be an Investment
Company required to be registered under the Investment Company
Act.
(c) At such time after the Trust has issued any Securities that remain
outstanding, any amendment that would adversely affect the rights, privileges or
preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities.
(d) Section 9.1(c) and this Section 12.1 shall not be amended without
the consent of all of the Holders of the Securities.
(e) Article IV shall not be amended without the consent of the Holders
of a Majority in liquidation amount of the Common Securities.
(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.
(g) Notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this
Declaration that may be defective or inconsistent with any
other provision of this Declaration;
(iii) add to the covenants, restrictions or
obligations of the Sponsor; and
(iv) 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.
53
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 Convertible 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 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 or the rules of any stock exchange on
which the Convertible Preferred Securities are listed or admitted for
trading, such vote, consent or approval may be given at a meeting of
the Holders of Securities. Any action that may be taken at a meeting of
the Holders of Securities may be taken without a meeting if a consent
in writing setting forth the action so taken is signed by the Holders
of Securities owning not less than the minimum amount of Securities in
liquidation amount that would be necessary to authorize or take such
action at a meeting at which all Holders of Securities having a right
to vote thereon were present and voting. Prompt notice of the taking of
action without a meeting shall be given to the Holders of Securities
entitled to vote who have not consented in writing. The 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;
(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 Convertible
54
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 PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 REPRESENTATIONS AND WARRANTIES OF PROPERTY TRUSTEE.
The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Property Trustee represents and warrants, as applicable, to the
Trust and the Sponsor at the time of the Successor Property Trustee's acceptance
of its appointment as Property Trustee that:
(a) the Property Trustee is a national banking association with trust
powers, duly organized, validly existing and in good standing, with trust power
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration;
(b) the execution, delivery and performance by the Property Trustee of
the Declaration has been duly authorized by all necessary corporate action on
the part of the Property Trustee. The Declaration has been duly executed and
delivered by the Property Trustee, and it constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) the execution, delivery and performance of the Declaration by the
Property Trustee does not conflict with or constitute a breach of the charter or
by-laws of the Property Trustee; and
(d) no consent, approval or authorization of, or registration with or
notice to, any South Carolina or federal banking authority is required for the
execution, delivery or performance by the Property Trustee, of the Declaration.
SECTION 13.2 REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE.
The 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 national banking association or a
Delaware banking corporation with trust powers, duly organized, validly existing
and in good standing, with trust power
55
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration.
(b) The Delaware Trustee has been authorized to perform its obligations
under the Certificate of Trust and the Declaration. The Declaration under
Delaware law constitutes a legal, valid and binding obligation of the Delaware
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other similar
laws affecting creditors' rights generally and to general principles of equity
and the discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law).
(c) No consent, approval or authorization of, or registration with or
notice to, any Delaware or federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of the Declaration.
(d) 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 first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Holders of the Securities):
QUALCOMM Financial Trust I
c/o QUALCOMM Incorporated
6455 Lusk Boulevard
San Diego, California 92121-2779
Attention: General Counsel
(b) if given to the Delaware Trustee or the Property Trustee, at the
mailing address set forth below (or such other address as Delaware Trustee or
the Property Trustee may give notice of to the Holders of the Securities):
Wilmington Trust Company
1100 North Market Street
9th Floor
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
(c) 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):
56
QUALCOMM Incorporated
6455 Lusk Boulevard
San Diego, California 92121-2779
Attention: General Counsel
(d) 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.
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.
57
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.
SECTION 14.8 COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided by this Declaration, upon any
application or request by the Company to the Trustees to take any action under
any provision of this Declaration, the Company shall furnish to the Trustees an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Declaration 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 Declaration relating to such
particular application or request, no additional certificate or opinion need be
furnished.
58
IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed as of the day and year first above written.
/s/ Irwin Mark Jacobs
----------------------------------------
Irwin Mark Jacobs, as Regular Trustee
/s/ Harvey P. White
----------------------------------------
Harvey P. White, as Regular Trustee
/s/ Anthony S. Thornley
----------------------------------------
Anthony S. Thornley, as Regular Trustee
Wilmington Trust Company, as Delaware and Property
Trustee
By: /s/ James P. Lawler
-------------------------------------
Name: James P. Lawler
Title: Vice President
QUALCOMM Incorporated, as Sponsor
By: /s/ Anthony S. Thornley
-------------------------------------
Name: Anthony S. Thornley
Title: Senior Vice President and Chief Financial
Officer
59
ANNEX TO AMENDMENT
RESTATED DECLARATION OF TRUST
(4.3)
ANNEX I
TERMS OF SECURITIES
5 3/4% TRUST CONVERTIBLE PREFERRED SECURITIES
5 3/4% TRUST CONVERTIBLE COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of February 25, 1997 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Convertible Preferred Securities and the
Common Securities are set out below (each capitalized term used but not defined
herein has the meaning set forth in the Declaration or, if not defined in such
Declaration, as defined in the Offering Memorandum referred to below):
1. DESIGNATION AND NUMBER.
(a) Convertible Preferred Securities. 11,000,000 Convertible
Preferred Securities of the Trust with an aggregate liquidation amount with
respect to the assets of the Trust of $550,000,000, plus up to an additional
2,200,000 Convertible Preferred Securities of the Trust with an aggregate
liquidation amount with respect to the assets of the Trust of $110,000,000 (the
"Additional Preferred Securities") solely to cover over-allotments (as provided
for in the Purchase Agreement), and a liquidation amount with respect to the
assets of the Trust of $50 per Convertible Preferred Security, are hereby
designated for the purposes of identification only as "5 3/4% Trust Convertible
Preferred Securities" (the "Convertible Preferred Securities"). The Convertible
Preferred Security Certificates evidencing the Convertible Preferred Securities
shall be substantially in the form of Exhibit A-1 to the Declaration, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice or to conform to the rules of any stock
exchange on which the Convertible Preferred Securities are listed.
(b) Common Securities. 341,000 Common Securities of the Trust with
an aggregate liquidation amount with respect to the assets of the Trust of
$17,050,000, plus up to an additional 68,050 Common Securities of the Trust with
an aggregate liquidation amount with respect to the assets of the Trust of
$3,402,500 to meet the capital requirements of the Trust in the event of an
issuance of Additional Preferred Securities, and a liquidation amount with
respect to the assets of the Trust of $50 per common security, are hereby
designated for the purposes of identification only as "5 3/4% Trust Convertible
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 ordinary usage, custom or practice.
2. DISTRIBUTIONS.
(a) Distributions payable on each Security will be fixed at a rate
per annum of 5 3/4% (the "Coupon Rate") of the stated liquidation amount of $50
per Security, such rate being the rate of interest payable on the Debentures to
be held by the Property Trustee. Distributions in arrears for more than one
quarter will bear interest thereon compounded quarterly at the Coupon Rate (to
the extent permitted by
I-1
applicable law). The term "Distributions" as used herein includes such cash
distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds available therefor. The amount of Distributions payable for
any period will be computed on the basis of a 360-day year of twelve 30-day
months.
(b) Distributions on the Securities will be cumulative, will
accrue from the date of original issuance of the Securities, and will be payable
quarterly in arrears, on March 1, June 1, September 1 and December 1 of each
year, commencing on June 1, 1997, except as otherwise described below. So long
as no event of default under the Indenture shall have occurred and be
continuing, the Debenture Issuer has the right under the Indenture to defer
payments of interest by extending the interest payment period from time to time
on the Debentures for a period not exceeding 20 consecutive quarters (each an
"Extension Period"), during which Extension Period no interest shall be due and
payable on the Debentures, provided that no Extension Period shall last beyond
the date of maturity of the Debentures. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded quarterly during any
such Extension Period. Prior to the termination of any such Extension Period,
the Debenture Issuer may further extend such Extension Period; provided that
such Extension Period together with all such previous and further extensions
thereof may not exceed 20 consecutive quarters or extend beyond the maturity of
the Debentures. Payments of accrued Distributions will be payable to Holders as
they appear on the books and records of the Trust on the first record date after
the end of the Extension Period. Upon the termination of any Extension Period
and the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates, which will be 15 days prior to the relevant payment dates, which
payment dates correspond to the interest payment dates on the Debentures;
provided that if the payment date is a Redemption Date, then the record date for
the Distribution shall be as of the opening of business on such record date for
the purpose of permitting a Holder of a Convertible Preferred Security to
convert on such record date while continuing to be the record holder for the
Distribution and therefore entitled to receive the Distribution on the payment
date notwithstanding conversion on the record date. In the event that any
Convertible Preferred Security is redeemed after a record date and prior to (but
not on) the corresponding payment date, the accrued and unpaid distributions on
such Convertible Preferred Security as of the redemption date will be paid to
the holder thereof on the redemption date, not to the holder thereof on the
record date. In the event that a redemption date is also a payment date, then
the accrued and unpaid distributions will be paid to the holder of such
Convertible Preferred Security as of the record date. Subject to any applicable
laws and regulations and the provisions of the Declaration, each such payment in
respect of the Convertible Preferred Securities will be made as described under
the heading "Description of the Convertible Preferred Securities--Form,
Denomination and Registration" in the Offering Memorandum, dated February 19,
1997, of the Trust. The relevant record dates for the Common Securities shall be
the same record date as for the Convertible Preferred Securities. Distributions
payable on any Securities that are not punctually paid on any Distribution
payment date, as a result of the Debenture Issuer having failed to make a
payment under the Debentures, will cease to be payable to the Person in whose
name such Securities are registered on the relevant record date, and such
defaulted Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other specified date
determined in accordance with the Indenture. If any date on which Distributions
are payable on the Securities is not a Business Day, then payment of the
Distribution payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other
I-2
payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
(d) In the event of an election by the Holder to convert its
Securities through the Conversion Agent into Common Stock (as hereinafter
defined) pursuant to the terms of the Securities as set forth in this Annex I to
the Declaration, no payment, allowance or adjustment shall be made with respect
to accumulated and unpaid Distributions on such Securities, or be required to be
made; provided that Holders of Securities at the close of business on any record
date for the payment of Distributions will be entitled to receive the
Distributions payable on such Securities on the corresponding payment date
notwithstanding the conversion of such Securities into Common Stock following
such record date.
(e) In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION.
In the event of any voluntary or involuntary dissolution, winding-up or
termination of the Trust, the Holders of the Securities on the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive out of the assets of the Trust available for distribution to Holders of
Securities after satisfaction of liabilities to creditors an amount equal to the
aggregate of the stated liquidation amount of $50 per Security plus accrued and
unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"), unless such dissolution, winding-up or termination
occurs in connection with a Special Event in which case, in accordance with
Section 4(c), Debentures in an aggregate stated principal amount equal to the
aggregate stated liquidation amount of such Securities, with an interest rate
equal to the Coupon Rate of, and bearing accrued and unpaid interest in an
amount equal to the accrued and unpaid Distributions on, such Securities, shall
be distributed on a Pro Rata basis to the Holders of the Securities in exchange
for such Securities.
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Securities shall be paid on a Pro Rata basis.
4. REDEMPTION AND DISTRIBUTION.
(a) Upon the repayment of the Debentures in whole or in part,
whether at maturity or upon redemption (either at the option of the Debenture
Issuer or pursuant to a Special Event as described below), the proceeds from
such repayment or payment shall be simultaneously applied to redeem Securities
having an aggregate liquidation amount equal to the aggregate principal amount
of the Debentures so repaid or redeemed at a redemption price per Security equal
to the redemption price of the Debentures, together with accrued and unpaid
Distributions thereon through the date of the redemption, payable in cash (the
"Redemption Price"). Holders will be given not less than 20 nor more than 60
days notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Securities will be redeemed Pro Rata from each Holder of
Securities, it being understood that, in respect of Convertible Preferred
Securities registered in the name of and held of record by DTC (or a successor
depositary) or any nominee, the distribution of the proceeds of such redemption
will be made in accordance with the procedures of such agency or nominee.
I-3
(c) If, at any time, a Tax Event or an Investment Company Event
(each, as defined below, a "Special Event") shall occur and be continuing, the
Regular Trustees may with the consent of the Sponsor, except in certain limited
circumstances in relation to a Tax Event described in this Section 4(c),
dissolve the Trust and, after satisfaction of creditors, cause Debentures held
by the Property Trustee, having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to the
Coupon Rate of, and accrued and unpaid 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 Special Event (the "90 Day Period"); provided, however,
that such dissolution and distribution shall be conditioned on (i) in the case
of the occurrence of a Tax Event, the Regular Trustees' receipt of an opinion of
a nationally recognized independent tax counsel experienced in such matters (a
"No Recognition Opinion"), which opinion may rely on published revenue rulings
of the Internal Revenue Service, to the effect that neither the Trust nor the
Holders of the Securities will recognize any gain or loss for United States
federal income tax purposes as a result of the dissolution of the Trust and the
distribution of Debentures, (ii) in the case of a Tax Event, the Debenture
Issuer or the Trust being unable to eliminate, within the 90 Day Period, the Tax
Event by taking some ministerial action, such as filing a form or making an
election, or pursuing some other similar reasonable measure that has no adverse
effect on the Trust, the Debenture Issuer, the Sponsor or the Holders of the
Securities ("Ministerial Action"), and (iii) the Sponsor's prior written consent
to such dissolution and distribution.
If in the event of a Tax Event (i) after receipt of a Dissolution Tax
Opinion (as defined hereinafter) by the Regular Trustees, the Sponsor has
received an opinion (a "Redemption Tax Opinion") of a nationally recognized
independent tax counsel experienced in such matters that, as a result of a Tax
Event, there is more than an insubstantial risk that the Debenture Issuer would
be precluded from deducting the interest on the Debentures for United States
federal income tax purposes even if the Debentures were distributed to the
Holders of Securities in liquidation of such Holders' interests in the Trust as
described in this Section 4(c), or (ii) the Regular Trustees shall have been
informed by nationally recognized independent tax counsel experienced in such
matters that a No Recognition Opinion cannot be delivered to the Trust, the
Debenture Issuer shall have the right at any time, upon not less than 20 nor
more than 60 days notice, to redeem the Debentures in whole or in part, at a
redemption price equal to 100% of the principal amount thereof plus accrued and
unpaid interest thereon, for cash within 90 days following the occurrence of
such Tax Event. Following such redemption, Securities with an aggregate
liquidation amount equal to the aggregate principal amount of the Debentures so
redeemed shall be redeemed by the Trust at the Redemption Price on a Pro Rata
basis; provided, however, that, if at the time there is available to the
Debenture Issuer or the Trust the opportunity to eliminate, within such 90-day
period, the Tax Event by taking some Ministerial Action, the Trust or the
Debenture Issuer will pursue such Ministerial Action in lieu of redemption.
"Tax Event" means that the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters (a "Dissolution Tax Opinion") to the effect that on or after February
25, 1997, as a result of (a) any amendment to, clarification of, or change
(including any announced prospective change) in the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein affecting taxation, (b) any judicial decision,
official administrative pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action") or (c) any amendment to,
clarification of, or change in the official position or the interpretation of
such Administrative Action or judicial decision that differs from the
theretofore generally accepted position, in each case, by any legislative body,
court, governmental authority or regulatory body, irrespective of the manner in
which such amendment, clarification or change is made
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known, which amendment, clarification, or change is effective or such
pronouncement or decision is announced, in each case, on or after, February 25,
1997 (collectively, a "Change in Tax Law"), there is more than an insubstantial
risk that (i) the Trust is or will be subject to United States federal income
tax with respect to interest accrued or received on the Debentures, (ii) the
Trust is, or will be subject to more than a de minimis amount of taxes, duties
or other governmental charges, or (iii) interest payable in cash by the
Debenture Issuer to the Trust on the Debentures is not, or will not be,
deductible, in whole or in part, by the Debenture Issuer for United States
federal income tax purposes. Notwithstanding the foregoing, a Tax Event shall
not include any Change in Tax Law that requires the Debenture Issuer for United
States federal income tax purposes to defer taking a deduction for any original
issue discount ("OID") that accrues with respect to the Debentures until the
interest payment related to such OID is paid by the Debenture Issuer in cash;
provided, that such Change in Tax Law does not create more than an insubstantial
risk that the Debenture Issuer will be prevented from taking a deduction for OID
accruing with respect to the Debentures at a date that is no later than the date
the interest payment related to such OID is actually paid by the Debenture
Issuer in cash.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of a nationally recognized independent counsel experienced
in such matters 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
regulations by any legislative body, court, governmental agency or regulatory
authority on or after February 25, 1997 (a "Change in 1940 Act Law"), there is
more than an insubstantial risk that the Trust is or will be considered an
"investment company" which is required to be registered under the Investment
Company Act of 1940, as amended (the "1940 Act").
On and from the date fixed by the Regular Trustees for any distribution
of Debentures upon dissolution of the Trust: (i) the Securities will no longer
be deemed to be outstanding, (ii) The Depository Trust Company (the
"Depositary") or its nominee (or any successor Clearing Agency or its nominee),
as the record Holder of the Convertible Preferred Securities held in the form of
Global Certificates, will receive a registered certificate or certificates in
global form representing the Debentures to be delivered upon such distribution,
and (iii) any certificates representing Securities, except for Global
Certificates representing Convertible Preferred Securities held by the
Depositary or its nominee (or any successor Clearing Agency or its nominee),
will be deemed to represent Debentures having an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the Coupon Rate of, and accrued and unpaid interest equal to
accrued and unpaid Distributions on, such Convertible Preferred Securities until
such certificates are presented to the Debenture Issuer or its agent for
transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding
Securities unless all accrued and unpaid Distributions have been paid on all
Securities for all quarterly Distribution periods terminating on or before the
date of redemption.
(e) Notice of any redemption of, or notice of distribution of
Debentures in exchange for the Securities (a "Redemption/Distribution Notice"),
will be given by the Trust by mail to each Holder of Securities to be redeemed
or exchanged not fewer than 20 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of a redemption, will be the
date fixed for redemption of the Debentures. For purposes of the calculation of
the date of redemption or exchange and the dates on which notices are given
pursuant to this Section 4(e), a Redemption/Distribution Notice shall be deemed
to be given on the day such notice is first mailed by first-class mail, postage
prepaid, or by such other means suitable to assure delivery of such written
notice, to Holders of Securities. 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
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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.
(f) In the event that fewer than all the outstanding Securities
are to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata
from each Holder of Securities, it being understood that, in respect of
Convertible Preferred Securities registered in the name of and held of record by
the Depositary or its nominee (or any successor Clearing Agency or its nominee)
or any nominee, the distribution of the proceeds of such redemption will be made
to each Clearing Agency Participant (or Person on whose behalf such nominee
holds such securities) in accordance with the procedures applied by such agency
or nominee.
(g) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are redeemed as set out in this Section 4 (which notice will be
irrevocable), then (A) with respect to the Convertible Preferred Securities held
in Global Certificates, by 12:00 noon, New York City time, on the redemption
date, provided that the Debenture Issuer has paid the Property Trustee a
sufficient amount of cash in connection with the related redemption or other
repayment of the Debentures, the Property Trustee will deposit irrevocably with
the Depositary or its nominee (or successor Clearing Agency or its nominee)
funds sufficient to pay the applicable Redemption Price with respect to the
Convertible Preferred Securities and will give the Depositary (or its nominee)
(or successor Clearing Agency or its nominee) irrevocable instructions and
authority to pay the Redemption Price to the Holders of the Convertible
Preferred Securities, and (B) with respect to Convertible Preferred Securities
issued in definitive form and Common Securities, provided that the Debenture
Issuer has paid the Property Trustee a sufficient amount of cash in connection
with the related redemption or maturity of the Debentures, the Property Trustee
will pay the relevant Redemption Price to the Holders of such Securities by
check mailed to the address of the relevant Holder appearing on the books and
records of the Trust on the redemption date. If a Redemption/Distribution Notice
shall have been given and funds deposited as required, if applicable, then
immediately prior to the close of business on the required date of such deposit,
Distributions will cease to accrue on the Securities so called for redemption
and all rights of Holders of such Securities so called for redemption will
cease, except the right of the Holders of such Securities to receive the
Redemption Price, but without interest on such Redemption Price. 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 (and without any interest or
other payment in respect of any such delay) except that, if such Business Day
falls in the next calendar year, such payment will be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date fixed for redemption. If payment of the Redemption Price in respect
of any Securities is improperly withheld or refused and not paid either by the
Property Trustee or by the Sponsor as guarantor pursuant to the relevant
Securities Guarantee, Distributions on such Securities will continue to accrue
from the original redemption date to the actual date of payment, in which case
the actual payment date will be considered the date fixed for redemption for
purposes of calculating the Redemption Price.
(h) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in respect of the Convertible Preferred
Securities held in the form of Global Certificates, to the Depositary or its
nominee (or any successor Clearing Agency or its nominee) and, in respect of
Definitive Convertible Preferred Security Certificates, to the Holder thereof,
and (B) in respect of the Common Securities, to the Holder thereof.
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(i) 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
Convertible Preferred Securities by tender, in the open market or otherwise.
5. CONVERSION RIGHTS.
The Holders of Securities shall have the right at any time, beginning
April 26, 1997 through the close of business on February 24, 2012 (or, in the
case of Securities called for redemption, prior to the close of business on the
Business Day prior to the redemption date), at their option, to cause the
Conversion Agent to convert Securities, on behalf of the converting Holders,
into shares of Class A Common Stock of QUALCOMM Incorporated ("QUALCOMM")
("Common Stock") in the manner described herein on and subject to the following
terms and conditions:
(a) The Securities will be convertible at the office of the
Conversion Agent into fully paid and nonassessable shares of Common Stock
pursuant to the Holder's direction to the Conversion Agent to exchange such
Securities for a portion of the Debentures theretofore held by the Trust on the
basis of one Security per $50 principal amount of Debentures, and immediately
convert such amount of Debentures into fully paid and nonassessable shares of
Common Stock at an initial rate of 0.6882 shares of Common Stock per $50
principal amount of Debentures (which is equivalent to a conversion price of
$72.6563 per share of Common Stock, subject to certain adjustments set forth in
Sections 15.3 and 15.4 of the Indenture (as so adjusted, "Conversion Price")).
(b) In order to convert Securities into QUALCOMM's Common Stock
the Holder shall submit to the Conversion Agent at the office referred to above
an irrevocable request to convert Securities on behalf of such Holder (the
"Conversion Request"), together, if the Securities are in certificated form,
with such certificates. The Conversion Request shall (i) set forth the number of
Securities to be converted and the name or names, if other than the Holder, in
which the shares of Common Stock should be issued and (ii) direct the Conversion
Agent (a) to exchange such Securities for a portion of the Debentures held by
the Trust (at the rate of exchange specified in the preceding paragraph) and (b)
to immediately convert such Debentures on behalf of such Holder, into Common
Stock (at the conversion rate specified in the preceding paragraph). The
Conversion Agent shall notify the Trust of the Holder's election to exchange
Securities for a portion of the Debentures held by the Trust and the Trust
shall, upon receipt of such notice, deliver to the Conversion Agent the
appropriate principal amount of Debentures for exchange in accordance with this
Section. The Conversion Agent shall thereupon notify QUALCOMM of the Holder's
election to convert such Debentures into shares of Common Stock. Holders of
Securities at the close of business on a Distribution record date will be
entitled to receive the Distribution payable on such securities on the
corresponding Distribution payment date notwithstanding the conversion of such
Securities following such record date but prior to such distribution payment
date. Except as provided above, neither the Trust nor the Sponsor will make, or
be required to make, any payment, allowance or adjustment upon any conversion on
account of any accumulated and unpaid Distributions accrued on the Securities
(including any Additional Amounts accrued thereon) surrendered for conversion,
or on account of any accumulated and unpaid dividends on the shares of Common
Stock issued upon such conversion. Securities shall be deemed to have been
converted immediately prior to the close of business on the day on which a
Notice of Conversion relating to such Securities is received by the Trust in
accordance with the foregoing provision (the "Conversion Date"). The Person or
Persons entitled to receive Common Stock issuable upon conversion of the
Debentures shall be treated for all purposes as the record holder or holders of
such Common Stock at such time. As promptly as practicable on or after the
Conversion Date, QUALCOMM shall issue and deliver at the office of the
Conversion Agent a certificate or certificates for the number of full shares of
Common Stock issuable upon such conversion, together with the cash payment, if
any, in lieu of any
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fraction of any share to the Person or Persons entitled to receive the same,
unless otherwise directed by the Holder in the notice of conversion and the
Conversion Agent shall distribute such certificate or certificates to such
Person or Persons.
(c) Each Holder of a Security by his acceptance thereof appoints
Wilmington Trust Company "Conversion Agent" for the purpose of effecting the
conversion of Securities in accordance with this Section. In effecting the
conversion and transactions described in this Section, the Conversion Agent
shall be acting as agent of the Holders of Securities directing it to effect
such conversion transactions. The Conversion Agent is hereby authorized (i) to
exchange Securities from time to time for Debentures held by the Trust in
connection with the conversion of such Securities in accordance with this
Section and (ii) to convert all or a portion of the Debentures into Common Stock
and thereupon to deliver such shares of Common Stock in accordance with the
provisions of this Section and to deliver to the Trust a new Debenture or
Debentures for any resulting unconverted principal amount, provided that the
Conversion Agent shall not give effect to any conversion of Securities if, after
giving effect to such conversion, the aggregate amount of Common Securities
outstanding would be less than 3% of the aggregate liquidation amount of the
Securities.
(d) No fractional shares of Common Stock will be issued as a
result of conversion, but in lieu thereof, such fractional interest will be paid
in cash by QUALCOMM to the Conversion Agent, which in turn will make such
payment to the Holder or Holders of Securities so converted. The cash payable
shall be based on the current market price of Common Stock on the date such
Securities are surrendered for conversion.
(e) QUALCOMM shall at all times reserve and keep available out of
its authorized and unissued Common Stock, solely for issuance upon the
conversion of the Debentures, free from any preemptive or other similar rights,
such number of shares of Common Stock as shall from time to time be issuable
upon the conversion of all the Debentures then outstanding.
Notwithstanding the foregoing, QUALCOMM shall be entitled to deliver
upon conversion of Debentures, shares of Common Stock reacquired and held in the
treasury of QUALCOMM (in lieu of the issuance of authorized and unissued shares
of Common Stock), so long as any such treasury shares are free and clear of all
liens, charges, security interests or encumbrances. Any shares of Common Stock
issued upon conversion of the Debentures shall be duly authorized, validly
issued and fully paid and nonassessable. The Trust shall deliver the shares of
Common Stock received upon conversion of the Debentures to the converting Holder
free and clear of all liens, charges, security interests and encumbrances,
except for United States withholding taxes. Each of QUALCOMM and the Trust shall
prepare and shall use its best efforts to obtain and keep in force such
governmental or regulatory permits or other authorizations as may be required by
law, and shall comply with all applicable requirements as to registration or
qualification of Common Stock (and all requirements to list Common Stock
issuable upon conversion of Debentures that are at the time applicable), in
order to enable QUALCOMM to lawfully issue Common Stock to the Trust upon
conversion of the Debentures and the Trust to lawfully deliver Common Stock to
each Holder upon conversion of the Securities.
(f) QUALCOMM will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Debentures and the delivery of the shares of Common Stock by the Trust upon
conversion of the Securities. The Sponsor shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the issue
and delivery of shares of Common Stock in a name other than that in which the
Securities so converted were registered, and no such issue or delivery shall be
made unless and until the person requesting such issue
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has paid to the Trust the amount of any such tax, or has established to the
satisfaction of the Trust that such tax has been paid.
(g) Nothing in the preceding Paragraph (f) shall limit the
requirement of the Trust to withhold taxes pursuant to the terms of the
Securities or set forth in this Annex I to the Declaration or in the Declaration
itself or otherwise require the Property Trustee or the Trust to pay any amounts
on account of such withholdings.
6. VOTING RIGHTS - CONVERTIBLE PREFERRED SECURITIES.
(a) Except as provided under Sections 6(b) and 8 and as otherwise
required by law and the Declaration, the Holders of the Convertible 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 Convertible Preferred
Securities, voting separately as a class, may direct the time, method, and place
of conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under the
Declaration, including the right to direct the Property Trustee, as holder of
the Debentures, to (i) exercise the remedies available under the Indenture with
respect to the Debentures, (ii) waive any past default and its consequences that
is waivable under Section 7.13 of the Indenture, (iii) exercise any right to
rescind or annul a declaration that the principal of all the Debentures shall be
due and payable, or (iv) consent to any amendment, modification, or termination
of the Indenture or the Debentures, where such consent shall be required,
provided, however, that, where a consent under the Indenture would require the
consent or act of the Holders of greater than a majority of the Holders in
principal amount of Debentures affected thereby (a "Super Majority"), the
Property Trustee may only give such consent or take such action at the written
direction of the Holders of at least the proportion in liquidation amount of the
Convertible Preferred Securities which the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding. The Property
Trustee shall not revoke any action previously authorized or approved by a vote
of the Holders of the Convertible Preferred Securities. Other than with respect
to directing the time, method and place of conducting any remedy available to
the Property Trustee or the Debenture Trustee as set forth above, the Property
Trustee shall not take any action in accordance with the directions of the
Holders of the Convertible Preferred Securities under this paragraph unless the
Property 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 and each
holder of Securities will be treated as owning an undivided beneficial interest
in the Debentures.
If a Declaration Event of Default has occurred and is continuing and
such event is attributable to the failure of the Debenture Issuer to pay
interest or principal on the Debentures on the date such 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 the Common Securities will be subrogated to
the rights of such Holder of Convertible Preferred Securities to the extent of
any payment made by the Issuer to such Holder of Convertible Preferred
Securities in such Direct Action. In addition, if the Property Trustee fails to
enforce its rights under the Debentures (other than rights arising from an Event
of Default described in the immediately preceding sentence) for a period of 30
days after any Holder of Convertible Preferred Securities shall have made a
written request to the Property Trustee to enforce such rights, such Holder of
Convertible Preferred Securities may, to
I-9
the fullest extent permitted by law, thereafter institute a Direct Action to
enforce the Property Trustee's rights as holder of the Debentures, without first
instituting any legal proceeding against the Property Trustee or any other
Person. Except as provided in the preceding sentences, the Holders of
Convertible Preferred Securities will not be able to exercise directly any other
remedy available to the holders of the Debentures.
Any approval or direction of Holders of Convertible Preferred
Securities may be given at a separate meeting of Holders of Convertible
Preferred Securities convened for such purpose, at a meeting of all of the
Holders of Securities in the Trust or pursuant to written consent. The Regular
Trustees will cause a notice of any meeting at which Holders of Convertible
Preferred Securities are entitled to vote, or of any matter upon which action by
written consent of such Holders is to be taken, to be mailed to each Holder of
record of Convertible Preferred Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by which such
action is to be taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Convertible Preferred
Securities will be required for the Trust to redeem and cancel Convertible
Preferred Securities or to distribute the Debentures in accordance with the
Declaration and the terms of the Securities.
Notwithstanding that Holders of Convertible Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Convertible Preferred Securities that are owned by the Sponsor or any
Affiliate of the Sponsor shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if they were not outstanding.
7. VOTING RIGHTS - COMMON SECURITIES.
(a) Except as provided under Sections 7(b), (c) and 8 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 Convertible Preferred Securities has been
cured, waived, or otherwise eliminated and subject to the requirements of the
second to last sentence of this paragraph, the Holders of a Majority in
liquidation amount of the Common Securities, voting separately as a class, may
direct the time, method, and place of conducting any proceeding for any remedy
available to the Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under the Declaration, including (i) directing the
time, method, place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under Section 5.13 of the Indenture, or (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Debentures shall be due and payable, provided that, where a consent or
action under the Indenture would require the consent or act of a Super Majority
of the Holders, the Property Trustee may only give such consent or take such
action at the written direction of the Holders of at least the proportion in
liquidation amount of the Common Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding.
Pursuant to this Section 7(c), the Property Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the Convertible
Preferred Securities.
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Other than with respect to directing the time, method and place of conducting
any remedy available to the Property Trustee or the Debenture Trustee as set
forth above, the Property Trustee shall not take any action in accordance with
the directions of the Holders of the Common Securities under this paragraph
unless the Property Trustee has 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 and each
holder of Trust Securities will be treated as owning an undivided beneficial
interest in the Debentures.
If a Declaration Event of Default has occurred and is continuing and
such event is attributable to the failure of the Debenture Issuer to pay
interest or principal on the Debentures on the date such interest or principal
is otherwise payable (or in the case of redemption, on the redemption date),
then a Holder of Convertible Preferred Securities may directly institute a
Direct Action on or after the respective due date specified in the Debentures.
In connection with such Direct Action, the rights of the Holders of the Common
Securities will be subrogated to the rights of such Holder of Convertible
Preferred Securities to the extent of any payment made by the Issuer to such
Holder of Convertible Preferred Securities in such Direct Action. In addition,
if the Property Trustee fails to enforce its rights under the Debentures (other
than rights arising from an Event of Default described in the immediately
preceding sentence) for a period of 30 days after any Holder of Convertible
Preferred Securities shall have made a written request to the Property Trustee
to enforce such rights, such Holder of Convertible Preferred Securities may, to
the fullest extent permitted by law, thereafter institute a Direct Action to
enforce the Property Trustee's rights as holder of the Debentures, without first
instituting any legal proceeding against the Property Trustee or any other
Person. Except as provided in the preceding sentences, the Holders of
Convertible Preferred Securities will not be able to exercise directly any other
remedy available to the holders of the Debentures.
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.
8. AMENDMENTS TO DECLARATION AND INDENTURE.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities
voting together as a single class, will be entitled to vote on such amendment or
proposal (but not on any other amendment or proposal) and such amendment or
proposal shall not be effective except with the approval of the Holders of at
least a Majority in liquidation amount of the Securities affected thereby;
provided, however, that a reduction of the principal amount or Coupon Rate , or
a change in the
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payment dates or maturity of the Convertible Preferred Securities shall not be
permitted without the consent of each Holder of Convertible Preferred Securities
affected thereby; and provided further that, if any amendment or proposal
referred to in clause (i) above would adversely affect only the Convertible
Preferred Securities or only the Common Securities, then only the affected class
will be entitled to vote on such amendment or proposal and such amendment or
proposal shall not be effective except with the approval of a Majority in
liquidation amount of such class of Securities.
(b) In the event the consent of the Property Trustee as the holder
of the Debentures is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Property
Trustee shall request the written direction of the Holders of the Securities
with respect to such amendment, modification or termination and shall vote with
respect to such amendment, modification or termination as directed by a Majority
in liquidation amount of the Securities voting together as a single class;
provided, however, that where a consent under the Indenture would require the
consent of the holders of a Super Majority, the Property 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 Property Trustee shall not take any action in
accordance with the directions of the Holders of the Securities under this
Section 8(b) unless the Property Trustee has obtained an opinion of tax counsel
to the effect that, as a result of such action, the Trust will not be classified
as other than a grantor trust for the purposes of United States federal income
tax and that each holder of Securities will be treated as owning an undivided
beneficial interest in the Debentures.
9. PRO RATA.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Convertible Preferred Securities pro rata according to the aggregate liquidation
amount of Convertible Preferred Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Convertible Preferred Securities
outstanding, and only after satisfaction of all amounts owed to the Holders of
the Convertible Preferred Securities, to each Holder of Common Securities pro
rata according to the aggregate liquidation amount of Common Securities held by
the relevant Holder relative to the aggregate liquidation amount of all Common
Securities outstanding.
10. RANKING.
The Convertible Preferred Securities rank pari passu and payment
thereon shall be made Pro Rata with, the Common Securities except that, where an
Event of Default occurs and is continuing, the rights of Holders of the Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights to payment of the
Holders of the Convertible Preferred Securities.
11. ACCEPTANCE OF SECURITIES GUARANTEE AND INDENTURE.
Each Holder of Convertible Preferred Securities and Common Securities,
by the acceptance thereof, agrees to the provisions of the Convertible Preferred
Securities Guarantee and the Common Securities Guarantee, respectively,
including the subordination provisions therein and to the provisions of the
Indenture.
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12. NO PREEMPTIVE RIGHTS.
The Holders of the Securities shall have no preemptive or similar
rights to subscribe for any additional securities.
13. MISCELLANEOUS.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Convertible
Preferred Securities Guarantee or the Common Securities Guarantee (as may be
appropriate), and the Indenture to a Holder without charge on written request to
the Sponsor at its principal place of business.
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EXHIBIT A-1
FORM OF CONVERTIBLE PREFERRED SECURITY CERTIFICATE
{IF THE CONVERTIBLE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE,
INSERT - This Convertible Preferred Security is a Global Certificate within the
meaning of the Declaration hereinafter referred to and is registered in the name
of The Depository Trust Company (the "Depositary") or a nominee of the
Depositary. This Convertible Preferred Security is exchangeable for Convertible
Preferred Securities registered in the name of a person other than the
Depositary or its nominee only in the limited circumstances described in the
Declaration and no transfer of this Convertible Preferred Security (other than a
transfer of this Convertible Preferred Security as a whole by the Depositary to
a nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary) may be registered except in limited
circumstances.
Unless this Convertible Preferred Security is presented by an
authorized representative of The Depository Trust Company (55 Water Street, New
York, New York) to the Trust or its agent for registration of transfer, exchange
or payment, and any Convertible Preferred Security issued is registered in the
name of Cede & Co. or such other name as requested by an authorized
representative of The Depository Trust Company and any payment hereon is made to
Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A
PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.}
THIS SECURITY (OR ITS PREDECESSOR), ANY CONVERTIBLE SUBORDINATED DEBT
SECURITY ISSUED IN EXCHANGE FOR THIS SECURITY, AND ANY COMMON STOCK ISSUED ON
CONVERSION THEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED,
SOLD, OR OTHERWISE TRANSFERRED WITHIN THE "UNITED STATES" OR TO OR FOR THE
ACCOUNT OR BENEFIT OF, "U.S. PERSONS" (AS DEFINED IN REGULATION S UNDER THE
SECURITIES ACT) IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS SECURITY, BY
ITS ACCEPTANCE HEREOF, REPRESENTS, ACKNOWLEDGES, AND AGREES FOR THE BENEFIT OF
THE ISSUER HEREOF THAT: (I) IT HAS ACQUIRED A "RESTRICTED SECURITY" THAT HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT; (II) IT WILL NOT OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS THREE YEARS AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH QUALCOMM
INCORPORATED (THE "COMPANY") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF
THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) (THE "RESALE RESTRICTION
TERMINATION DATE") EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT
A1-1
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7)
OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY APPLICABLE JURISDICTION; AND (III) IT WILL,
AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THIS
SECURITY OF THE RESALE RESTRICTIONS SET FORTH IN (II) ABOVE. ANY OFFER, SALE OR
OTHER DISPOSITION PURSUANT TO THE FOREGOING CLAUSE (D), (E) OR (F) IS SUBJECT TO
THE RIGHT OF THE ISSUER OF THIS SECURITY AND THE TRUSTEES FOR SUCH ISSUER (i) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM IN FORM AND SUBSTANCE, AND (ii) IN EACH
OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRANSFER AGENT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER
THE RESALE RESTRICTION TERMINATION DATE.
A1-2
Certificate Number: Number of Convertible Preferred Securities:
____________________ _______________________
{ADD FOR GLOBAL CERTIFICATES: (as increased or
decreased as set forth on Schedule A attached hereto}
CUSIP NO.___________
Certificate Evidencing Convertible Preferred Securities
of
QUALCOMM FINANCIAL TRUST I
5 3/4% Trust Convertible Preferred Securities
(liquidation amount $50 per Trust Convertible Preferred Security)
QUALCOMM Financial Trust I, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that
______________ (the "Holder") is the registered owner of convertible preferred
securities of the Trust representing undivided beneficial interests in the
assets of the Trust designated the 5 3/4% Trust Convertible Preferred Securities
(liquidation amount $50 per Trust Convertible Preferred Security) (the
"Convertible Preferred Securities"). The Convertible Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Convertible Preferred
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of February 25, 1997, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Convertible
Preferred Securities as set forth in Annex I to the Declaration. Capitalized
terms used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Convertible Preferred
Securities Guarantee to the extent provided therein. The Sponsor will provide a
copy of the Declaration, the Convertible Preferred Securities Guarantee and the
Indenture to a Holder without charge upon written request to the Trust at its
principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Convertible
Preferred Securities as evidence of indirect beneficial ownership in the
Debentures.
A1-3
Unless the Property Trustee's Certificate of Authentication hereon has
been properly executed, these Convertible Preferred Securities shall not be
entitled to any benefit under the Declaration or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Trust has caused this certificate to be
executed.
QUALCOMM FINANCIAL TRUST I
By:________________________________
Name:
Title: Regular Trustee
{FORM OF CERTIFICATE OF AUTHENTICATION}
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Convertible Preferred Securities referred to in the
within-mentioned Declaration.
Dated:
Wilmington Trust Company,
as Property Trustee
By:_______________________________
Authorized Signatory
A1-4
{FORM OF REVERSE OF SECURITY}
Distributions payable on each Convertible Preferred Security will be
fixed at a rate per annum of 5 3/4% (the "Coupon Rate") of the stated
liquidation amount of $50 per Preferred Security, such rate being the rate of
interest payable on the Debentures to be held by the Property Trustee.
Distributions in arrears for more than one quarter will bear interest thereon
compounded quarterly at the Coupon Rate (to the extent permitted by applicable
law). The term "Distributions" as used herein includes such cash distributions
and any such interest payable unless otherwise stated. A Distribution is payable
only to the extent that payments are made in respect of the Debentures held by
the Property Trustee and to the extent the Property Trustee has funds available
therefor. The amount of Distributions payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months.
Except as otherwise described below, distributions on the Preferred
Securities will be cumulative, will accrue from February 25, 1997 and will be
payable quarterly in arrears, on June 1, September 1, December 1 and March 1 of
each year, commencing on June 1, 1997, which payment dates shall correspond to
the interest payment dates on the Debentures, to Holders of record at the close
of business on the regular record date for such distribution which shall be the
close of business 15 days prior to the relevant payment date. The Debenture
Issuer has the right under the Indenture, subject to certain conditions, to
defer payments of interest by extending the interest payment period from time to
time on the Debentures for a period not exceeding 20 consecutive quarters (each
an "Extension Period") provided that no Extension Period shall last beyond the
date of the maturity of the Debentures and, as a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded quarterly during any
such Extension Period. Prior to the termination of any such Extension Period,
the Debenture Issuer may further extend such Extension Period; provided that
such Extension Period together with all such previous and further extensions
thereof may not exceed 20 consecutive quarters or extend beyond the maturity of
the Debentures. Payments of accrued Distributions will be payable to Holders as
they appear on the books and records of the Trust on the first record date after
the end of the Extension Period. Upon the termination of any Extension Period
and the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
The Convertible Preferred Securities shall be redeemable as provided in
the Declaration.
The Convertible Preferred Securities shall be convertible into shares
of Common Stock of QUALCOMM Incorporated ("QUALCOMM Common Stock"), through (i)
the exchange of Preferred Securities for a portion of the Debentures and (ii)
the immediate conversion of such Debentures into QUALCOMM Common Stock, in the
manner and according to the terms set forth in the Declaration.
A1-5
CONVERSION REQUEST
To: Wilmington Trust Company
as Property Trustee of
QUALCOMM Financial Trust I
The undersigned owner of these Preferred Securities hereby irrevocably
exercises the option to convert these Convertible Preferred Securities, or the
portion below designated, into Common Stock of QUALCOMM Incorporated (the
"QUALCOMM Common Stock") in accordance with the terms of the Amended and
Restated Declaration of Trust, dated as of February 25, 1997 (as amended from
time to time, the "Declaration"), by the Regular Trustees named therein,
Wilmington Trust Company, as Delaware Trustee and as Property Trustee, QUALCOMM
Incorporated, as Sponsor, and by the Holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to the Declaration.
Pursuant to the aforementioned exercise of the option to convert these
Convertible Preferred Securities, the undersigned hereby directs the Conversion
Agent (as that term is defined in the Declaration) to (i) exchange such
Convertible Preferred Securities for a portion of the Debentures (as that term
is defined in the Declaration) held by the Trust (at the rate of exchange
specified in the terms of the Convertible Preferred Securities set forth as
Annex I to the Declaration) and (ii) immediately convert such Debentures on
behalf of the undersigned, into QUALCOMM Common Stock (at the conversion rate
specified in the terms of the Convertible Preferred Securities set forth as
Annex I to the Declaration).
A1-6
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Date: ____________, ____
in whole __ in part __
Number of Preferred Securities to be
converted: ___________________
If a name or names other than
the undersigned, please
indicate in the spaces below
the name or names in which the
shares of QUALCOMM Common
Stock are to be issued, along
with the address or addresses
of such person or persons
_____________________________________________
_____________________________________________
_____________________________________________
_____________________________________________
_____________________________________________
_____________________________________________
_____________________________________________
Signature (for conversion only)
Please Print or Typewrite Name and
Address, Including Zip Code, and
Social Security or Other
Identifying Number
_____________________________________________
_____________________________________________
_____________________________________________
Signature Guarantee:*___________________
_____________
* (Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Conversion Agent, which
requirements include membership or participation in the Securities
Transfer Agents Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the Conversion Agent in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
A1-7
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Convertible
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 Convertible Preferred Security Certificate on the books of the Trust. The
agent may substitute another to act for him or her.
Date: _____________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Convertible
Preferred Security Certificate)
Signature Guarantee** ___________________________________
__________________________________
** Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange
Act of 1934, as amended.
A1-8
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION
OF TRANSFER OF SECURITIES
RE: 5 3/4% Trust Convertible Preferred Securities of QUALCOMM Financial
Trust I
This Certificate relates to the exchange or registration for transfer
of _______ (number) of Convertible Preferred Securities held in (check
applicable box) _____ book-entry or ______ definitive form by
___________________ (the "Transferor"), prior to the Resale Restriction
Termination Date (as defined in the legend on the face of this Certificate).
The Transferor (check applicable box):
- has requested the Registrar by written order to deliver, in exchange
for its beneficial interest in a Global Preferred Security held by the
Depositary, Convertible Preferred Securities in definitive registered form of
authorized denominations and an aggregate number of Convertible Preferred
Securities equal to its beneficial interest in such Global Preferred Security
(or portion thereof as indicated above); or
- has requested the Registrar by written order to exchange or register
the transfer of such Convertible Preferred Securities.
In connection with such request and in respect of all such Convertible
Preferred Securities, the Transferor does hereby certify that Transferor is
familiar with the Declaration relating to the above-captioned Convertible
Preferred Securities and, as provided in Section 9.2 of such Declaration, the
transfer of these Convertible Preferred Securities does not require registration
under the Securities Act because (check applicable box):
- Such Convertible Preferred Securities are being acquired for the
Transferor's own account (in satisfaction of Section 9.2(a)(ii)(A) or Section
9.2(g)(i)(A) of the Declaration).
- Such Convertible Preferred Securities are being transferred to a
"qualified institutional buyer" (as defined in Rule 144A under the Securities
Act) in reliance on Rule 144A (in satisfaction of Section 9.2(a)(ii)(B) or
Section 9.2(g)(i)(B) of the Declaration).
- Such Convertible Preferred Securities are being transferred pursuant
to an effective registration statement under the Securities Act (in satisfaction
of Section 9.2(a)(ii)(C) or Section 9.2(g)(i)(C) of the Declaration).
- Such Convertible Preferred Securities are being transferred in
compliance with and in reliance on Rule 144 or Regulation S under the Securities
Act, or to an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3), or (7) under the Securities Act that is acquiring such
Convertible Preferred Securities for its own account, or for the account of such
an institutional accredited investor, not with a view to or for offer or sale in
connection with any distribution in violation of the Securities Act, or in
reliance on another exemption from the registration requirements of the
Securities Act (other than Rule 144A) and (check if applicable) _____ an opinion
of counsel to the effect that such
A1-9
transfer is in compliance with the Securities Act accompanies this Certificate
(in satisfaction of Section 9.2(a)(ii)(C) or Section 9.2(g)(i)(C) of the
Declaration).
______________________________
[INSERT NAME OF TRANSFEROR]
By:___________________________
Date:_____________________
A1-10
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE A
The original number of Convertible Preferred Securities represented by
this Global Certificate shall be __________. The following increases or
decreases in the number of Convertible Preferred Securities represented by this
Global Certificate have been made:
Amount of increase Amount of decrease Signature of
Date of in number of in number of Number of Securities authorized officer
increase/ Securities Securities following such of
decrease increase/decrease Trustee
A1-11
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN EFFECTIVE
REGISTRATION STATEMENT.
OTHER THAN AS PROVIDED IN THE DECLARATION (AS DEFINED HEREIN), THIS
SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT TO A
RELATED PARTY (AS DEFINED IN THE INDENTURE) OF QUALCOMM INCORPORATED.
Certificate Number: Number of Common Securities:
_______________ __________________
Certificate Evidencing Common Securities
of
QUALCOMM FINANCIAL TRUST I
5 3/4% Trust Convertible Common Securities
(liquidation amount $50 per Common Security)
QUALCOMM Financial Trust I, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that
_________________ (the "Holder") is the registered owner of common securities of
the Trust representing undivided beneficial interests in the assets of the Trust
designated the 5 3/4% Trust Convertible 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 25,
1997, as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Common Securities as set forth in
Annex I to the Declaration. Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Common Securities Guarantee to the extent provided therein. The
Sponsor will provide a copy of the Declaration, the Common Securities Guarantee
and the Indenture to a Holder without charge upon written request to the Sponsor
at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
A2-1
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 ___
day of ____________, 199__.
QUALCOMM Financial Trust I
By: ________________________________
Name:
Title: Regular Trustee
A2-2
{FORM OF REVERSE OF SECURITY}
Distributions payable on each Common Security will be fixed at a rate
per annum of 5 3/4% (the "Coupon Rate") of the stated liquidation amount of $50
per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one quarter will bear interest thereon compounded quarterly at the Coupon
Rate (to the extent permitted by applicable law). The term "Distributions" as
used herein includes such cash distributions and any such interest payable
unless otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the Property Trustee and
to the extent the Property Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months.
Except as otherwise described below, distributions on the Common
Securities will be cumulative, will accrue from February 25, 1997 and will be
payable quarterly in arrears, on March 1, June 1, September 1 and December 1 of
each year, commencing on June 1, 1997, which payment dates shall correspond to
the interest payment dates on the Debentures, to Holders of record at the close
of business on the regular record date for such distribution which shall be the
close of business on the Business Day next preceding such distribution payment
date unless otherwise provided in the Declaration. The Debenture Issuer has the
right under the Indenture, subject to certain conditions, to defer payments of
interest by extending the interest payment period from time to time on the
Debentures for a period not exceeding 20 consecutive quarters (each an
"Extension Period") provided that no Extension Period shall last beyond the date
of maturity of the Debentures and, as a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded quarterly during any
such Extension Period. Prior to the termination of any such Extension Period,
the Debenture Issuer may further extend such Extension Period; provided that
such Extension Period together with all such previous and further extensions
thereof may not exceed 20 consecutive quarters or extend beyond the date of
maturity of the Debentures. Payments of accrued Distributions will be payable to
Holders as they appear on the books and records of the Trust on the first record
date after the end of the Extension Period. Upon the termination of any
Extension Period and the payment of all amounts then due, the Debenture Issuer
may commence a new Extension Period, subject to the above requirements.
The Common Securities shall be redeemable as provided in the
Declaration.
The Common Securities shall be convertible into shares of Common Stock
of QUALCOMM Incorporated ("QUALCOMM Common Stock"), through (i) the exchange of
Common Securities for a portion of the Debentures and (ii) the immediate
conversion of such Debentures into QUALCOMM Common Stock, in the manner and
according to the terms set forth in the Declaration.
A2-3
CONVERSION REQUEST
To: Wilmington Trust Company
as Property Trustee of
QUALCOMM Financial Trust I
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Stock of QUALCOMM Incorporated (the "QUALCOMM Common
Stock") in accordance with the terms of the Amended and Restated Declaration of
Trust, dated as of February 25, 1997 (as amended from time to time, the
"Declaration"), by the Regular Trustees named therein, Wilmington Trust Company,
as Delaware Trustee and as Property Trustee, QUALCOMM Incorporated, as Sponsor,
and by the Holders, from time to time, of undivided beneficial interests in the
Trust to be issued pursuant to the Declaration. Pursuant to the aforementioned
exercise of the option to convert these Common Securities, the undersigned
hereby directs the Conversion Agent (as that term is defined in the Declaration)
to (i) exchange such Common Securities for a portion of the Debentures (as that
term is defined in the Declaration) held by the Trust (at the rate of exchange
specified in the terms of the Common Securities set forth as Annex I to the
Declaration) and (ii) immediately convert such Debentures on behalf of the
undersigned, into QUALCOMM Common Stock (at the conversion rate specified in the
terms of the Common Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Date: ____________, ____
in whole __ in part __
Number of Common Securities to be
converted: _____________________
A2-4
If a name or names other than
the undersigned, please
indicate in the spaces below
the name or names in which the
shares of QUALCOMM Common Stock
are to be issued, along with
the address or addresses of
such person or persons
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and
Address, Including Zip Code, and Social
or Other Identifying Number
---------------------------------------------
---------------------------------------------
Signature Guarantee:*
- ------------------
* (Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Conversion Agent, which
requirements include membership or participation in the Securities
Transfer Agents Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the Conversion Agent in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
A2-5
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints ______________________________________________________
________________________________________________________________________________
____________________________________ agent to transfer this Common Security
Certificate on the books of the Trust. The agent may substitute another to act
for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate) Signature Guarantee**:_____________________________________________
_________________
** (Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange
Act of 1934, as amended.)
A2-6
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
THIS SECURITY AND ANY COMMON STOCK ISSUED ON CONVERSION HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. THE HOLDER
OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, REPRESENTS, ACKNOWLEDGES, AND
AGREES FOR THE BENEFIT OF QUALCOMM INCORPORATED (THE "COMPANY") THAT: (I) IT
HAS ACQUIRED A "RESTRICTED SECURITY" THAT HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT; (II) IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE WHICH IS THREE YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
THIS SECURITY) (THE "RESALE RESTRICTION TERMINATION DATE") EXCEPT (A) TO THE
COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE OF RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE
501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR" FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY APPLICABLE JURISDICTION; AND
(III) IT WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THIS SECURITY OF THE RESALE RESTRICTIONS SET FORTH IN (II) ABOVE.
ANY OFFER, SALE OR OTHER DISPOSITION PURSUANT TO THE FOREGOING CLAUSE (D), (E)
OR (F) IS SUBJECT TO THE RIGHT OF THE ISSUER OF THIS SECURITY AND THE TRUSTEES
FOR SUCH ISSUER (i) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN FORM AND
SUBSTANCE, AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE TRANSFER AGENT. THIS LEGEND WILL BE REMOVED
UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
CUSIP No. 747525AA1
Certificate No. D-1. $567,050,000
--------------
QUALCOMM INCORPORATED
5 3/4% CONVERTIBLE SUBORDINATED DEBENTURE
QUALCOMM Incorporated, 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 WILMINGTON TRUST
COMPANY, AS PROPERTY TRUSTEE, or registered assigns, the principal sum of Five
Hundred Sixty Seven Million Fifty Thousand and No/100 Dollars ($567,050,000.00)
(as increased or decreased as indicated on Schedule A attached hereto) on
February 24, 2012, and to pay interest on said principal sum from February 25,
1997, 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 March 1, June
1, September 1, and December 1 of each year commencing June 1, 1997, at the
rate of 5 3/4% per annum until the principal hereof shall have become due
This Convertible Debenture is one of a duly authorized series of
Debentures of the Company (herein sometimes referred to as the "Debentures"),
specified in the Indenture, all issued or to be issued in one series under and
pursuant to an Indenture (the "Indenture") dated as of February 25, 1997, duly
executed and delivered between the Company and Wilmington Trust Company, as
Trustee (the "Trustee"), to which Indenture (which term shall include,
collectively, any 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
Convertible Debentures. This series of Debentures is limited in aggregate
principal amount as specified in the Indenture and is herein sometimes referred
to as the "Convertible Debentures."
Upon the occurrence and during the continuation of a Tax Event, in
certain circumstances, this Convertible Debenture may become due and payable,
in whole or in part, at the principal amount together with any interest accrued
thereon, including Additional Payments (the "Special Redemption Price"). The
Special Redemption Price shall be paid prior to 12:00 noon, New York time, on
the date of such redemption or at such earlier time as the Company determines.
In addition, the Company shall have the right to redeem this
Convertible Debenture at the option of the Company, upon not less than 20 nor
more than 60 days' notice, in whole or in part at any time on or after March 4,
2000 (an "Optional Redemption") at the following prices (expressed as
percentages of the principal amount of the Convertible Debentures) (the
"Optional Redemption Price") together with accrued and unpaid interest,
including Additional Payments, if any, to, but excluding, the redemption date,
if redeemed during the 12-month period beginning March 4:
Year Redemption Price
---- ----------------
2000 102.0%
2001 101.0%
2002 and thereafter 100.0%
If Convertible Debentures are redeemed on any March 1, June 1,
September 1, or December 1, accrued and unpaid interest shall be payable to
Holders of record on the relevant record date, instead of the Holders on the
Redemption Date.
So long as the corresponding Convertible Preferred Securities are
outstanding, the proceeds from the redemption of any of the Convertible
Debentures will be used to redeem Convertible Preferred Securities.
If Convertible Debentures are only partially redeemed by the Company
pursuant to an Optional Redemption, the Convertible Debentures will be redeemed
on a pro rata basis, in portions equal to $50 (or any integral multiple
thereof) of the principal amount of Convertible Debentures.
In the event of redemption of this Convertible Debenture in part only,
a new Convertible Debenture or Convertible Debentures for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Convertible Debentures
and all interest accrued thereof (including any Additional Payments) 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 affected at the time outstanding,
as defined in the Indenture, to execute supplemental indentures for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or of modifying in
any manner the rights of the Holders of the Debentures; provided, however, that
no such supplemental indenture shall (a) change the fixed maturity of any
Debenture, or reduce the principal amount thereof, or reduce the
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 same rate
per annum compounded quarterly. The amount of interest payable on any Interest
Payment Date shall be computed on the basis of a 360-day year of twelve 30-day
months. In the event that any date on which interest is payable on this
Convertible 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 for, on any
Interest Payment Date will, as provided in the Indenture (referred to on the
reverse hereof), be paid to the person in whose name this Convertible Debenture
(or one or more Predecessor Debentures, as defined in said Indenture) is
registered on the Regular Record Date for such interest installment which shall
be the close of business on the date 15 days prior to such Interest Payment
Date unless otherwise provided in the Indenture. 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 Convertible Debenture (or one or more Predecessor
Debentures) is registered at the close of business on a special record date to
be fixed by the Trustee (referred to on the reverse hereof) for the payment of
such defaulted interest, notice whereof shall be given to the registered
Holders of the Convertible 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
Convertible 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 Convertible 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
Debenture Register. Notwithstanding the foregoing, so long as the Holder of
this Convertible Debenture is the Property Trustee, the payment of the
principal of (and premium, if any) and interest on this Convertible Debenture
will be made at such place and to such account as may be designated by the
Property Trustee.
The indebtedness evidenced by this Convertible Debenture is, to the
extent provided in the Indenture, subordinate and junior in right of payment to
the prior payment in full of all Senior Indebtedness, and this Convertible
Debenture is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Convertible Debenture, by accepting the same, (a)
agrees to and shall be bound by such provisions, (b) authorizes and directs the
Trustee on his or her behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination so provided and (c)
appoints the Trustee his or her attorney-in-fact for any and all such purposes.
Each Holder hereof, by his or her acceptance hereof, hereby waives all notice
of the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such Holder upon said
provisions.
This Convertible 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 Convertible 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.
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or reduce any premium payable upon the redemption thereof, or
make any change that adversely affects the right to convert any Debenture or
make any change in the subordination provisions that adversely affects the
rights of any Holders of any Debenture, without the consent of the Holder of
each Debenture so affected, or (b) 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
Debentures at the time outstanding, on behalf of all of the Holders of the
Debentures, to waive any past default in the performance of any of the
covenants contained in the Indenture, or established pursuant to the Indenture,
and its consequences, except a default in the payment of the principal of or
premium, if any, or interest on any Debentures or a default with respect to
certain covenants concerning the Trust more fully set forth in the Indenture or
a default in respect of any provision in the Indenture that cannot be modified
without the consent of the Holders of all Debentures affected thereby. Any such
consent or waiver by the registered Holder of this Convertible 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 Convertible
Debenture and of any Convertible Debenture issued in exchange herefor 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
Convertible Debenture.
No reference herein to the Indenture and no provision of this
Convertible 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 Convertible Debenture at the time and
place and at the rate and in the money herein prescribed.
As long as an Event of Default shall not have occurred and be
continuing and certain other conditions have been satisfied, the Company shall
have the right at any time during the term of the Convertible Debentures and
from time to time to extend the interest payment period of such Convertible
Debentures for up to 20 consecutive quarters (as "Extended Interest Payment
Period"), at the end of which period the Company shall pay all interest
(including Additional Payments) then accrued and unpaid (together with interest
thereon at the rate specified for the Convertible Debentures to the extent that
payment of such interest is enforceable under applicable law) to the Holders as
they appear on the transfer records of the Company as of the first Regular
Record Date after the Extended Interest Payment Period. Before the termination
of any such Extended Interest Payment Period, the Company may further extend
such Extended Interest Payment Period, provided that such Extended Interest
Payment Period together with all such further extensions thereof shall not
exceed 20 consecutive quarters. At the termination of any such Extended
Interest Payment Period and upon the payment of all accrued and unpaid interest
(including all Additional Payments) then due, the Company may commence a new
Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations therein
set forth, this Convertible Debenture is transferable by the registered Holder
hereof on the Debenture Register of the Company, upon surrender of this
Convertible Debenture for registration of transfer at the office or agency of
the Trustee in Wilmington, Delaware 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 or her attorney duly authorized
in writing, and thereupon one or more new Convertible Debentures of authorized
denominations and for the same aggregate principal amount will be issued 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
Convertible Debenture, the Company, the Trustee, any paying agent and the
Debenture Registrar may deem and treat the registered Holder hereof as the
absolute owner hereof (whether or not this Convertible Debenture shall be
overdue and notwithstanding any notice of ownership or writing hereon made by
anyone other than the Debenture 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 Debenture 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 Convertible Debenture, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture,
against any incorporator, stockholder, 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 Holder of any Convertible Debenture has the right, exercisable at
any time beginning April 26, 1997 and prior to the close of business (New York
time) on February 24, 2012 (or, in the case of a Convertible Debenture called
for redemption, prior to the close of business on the Business Day prior to the
corresponding redemption date), to convert the principal amount thereof (or any
portion thereof that is an integral multiple of $50) into shares of Common
Stock at the initial conversion rate of 0.6882 shares of Common Stock for each
$50 in aggregate principal amount of Convertible Debenture (equivalent to a
Conversion Price of $72.6563 per share of Common Stock), subject to adjustment
under certain circumstances.
To convert a Convertible Debenture, a Holder must (a) complete and sign
a conversion notice substantially in the form attached hereto, (b) surrender
the Convertible Debenture to the Conversion Agent, (c) furnish appropriate
endorsements or transfer documents if required by the Conversion Agent and (d)
pay any transfer or similar tax, if required. Upon conversion, no adjustment or
payment will be made for interest (including Additional Payments) or dividends,
but if any Holder surrenders a Convertible Debenture for conversion on or after
the Regular Record Date for the payment of an installment of interest and prior
to the opening of business on the next Interest Payment Date, then,
notwithstanding such conversion, the interest payable on such Interest Payment
Date will be paid to the registered Holder of such Convertible Debenture on
such Regular Record Date. The number of shares issuable upon conversion of a
Convertible Debenture is determined by dividing the principal amount of the
Convertible Debentures converted by the Conversion Price in effect on the
Conversion Date. No fractional shares will be issued upon conversion but a cash
adjustment will be made for any fractional interest. The outstanding principal
amount of any Convertible Debenture shall be reduced by the portion of the
principal amount thereof converted into shares of Common Stock.
The Convertible Debentures are issuable only in registered form without
Coupons in denominations of $50 and any integral multiple thereof. As provided
in the Indenture and subject to certain limitations therein set forth,
Convertible Debentures are exchangeable for a like aggregate principal amount
of Convertible Debentures of a different authorized denomination, as requested
by the Holder surrendering the same.
All terms used in this Convertible Debenture that are not defined
herein but are defined in the Indenture shall have the meanings assigned to
them in the Indenture.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE
AND THE CONVERTIBLE DEBENTURES WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES
THEREOF.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
QUALCOMM INCORPORATED
By: /s/ Anthony S. Thornley
--------------------------------
Name: Anthony S. Thornley
Title:
Attest:
By: /s/ Irwin Mark Jacobs
-----------------------------
Name: Irwin Mark Jacobs
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures referred to in the within-mentioned
Indenture.
Dated: February 25, 1997
Wilmington Trust Company, as Trustee
By: /s/ James P. Lawler
------------------------------
Authorized Signatory
ELECTION TO CONVERT
To: QUALCOMM Incorporated
The undersigned owner of this Convertible Debenture hereby irrevocably
exercises the option to convert this Convertible Debenture, or the portion
below designated, into Class A Common Stock of QUALCOMM INCORPORATED in
accordance with the terms of the Indenture referred to in this Convertible
Debenture, and directs that the shares issuable and deliverable upon
conversion, together with any check in payment for fractional shares, be issued
in the name of and delivered to the undersigned, unless a different name has
been indicated in the assignment below. If shares are to be issued in the name
of a person other than the undersigned, the undersigned will pay all transfer
taxes payable with respect thereto.
Date: ________________, ____
in whole _____ in part _____
Portion of Convertible Debenture to be
converted ($50 or integral multiples
thereof):
$______________
________________________________________
Signature (for conversion only)
Please Print or Typewrite Name and
Address, Including Zip Code, and
Social Security or Other Identifying
Number
________________________________________
________________________________________
________________________________________
Signature Guarantee: (1)________________
(1) Signature must be guaranteed by an "eligible guarantor institution" that
is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Conversion Agent, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Conversion Agent in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange
Act of 1934, as amended.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Convertible 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 Convertible Debenture on the books of the Company. The
agent may substitute another to act for him or her.
Date:_________________________
Signature:____________________
(Sign exactly as your name appears on the other side of this Convertible
Debenture)
Signature Guarantee(2):________________________________________________
(2) Signature must be guaranteed by an "eligible guarantor institution" that
is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Debenture Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934,
as amended.
SCHEDULE A
The original principal amount of this Debenture shall be
$567,050,000.00. The following increases or decreases in the principal amount
of this Debenture have been made:
Signature of
Date of Principal amount of authorized officer
increase/ Amount of increase Amount of decrease Debenture following of Trustee or
decrease in principal amount in principal amount increase/decrease Custodian
- -------- ------------------- ------------------- ------------------- ------------------
EXHIBIT C
PURCHASE AGREEMENT
C-1
DEBENTURE PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of February 25, 1997, between QUALCOMM
INCORPORATED, a corporation existing under the laws of the State of Delaware
(the "Issuer"), and QUALCOMM FINANCIAL TRUST I, a statutory business trust
organized under the laws of the State of Delaware (the "Trust"), relating to the
5 3/4% Convertible Subordinated Debentures due February 24, 2012 (the
"Debentures") issuable pursuant to the Indenture (the "Indenture") dated as of
February 25, 1997 between the Company and Wilmington Trust Company, as trustee.
Capitalized terms used herein and not otherwise defined herein have the
respective meanings ascribed thereto in the Purchase Agreement, dated February
19, 1997 among Issuer, the Trust and the Purchasers named therein (the "Purchase
Agreement").
WHEREAS, the Trust, desires to purchase from the Issuer, and the Issuer
desires to sell to the Trust, the Debentures.
NOW THEREFORE, the parties hereto agrees as follows:
1. The Trust hereby offers to purchase and the Issuer hereby
accepts such offer and agrees to issue and sell to the Trust on the Closing Date
(as defined in the Purchase Agreement) $567,050,000 aggregate principal amount
of the Debentures, in consideration of the payment on or before the date hereof
of $567,050,000 in immediately available funds.
2. The Issuer represents and warrants that the Debentures have
been duly authorized and executed by the Issuer, and when duly authenticated and
delivered to the Trust in accordance with the terms hereof, will constitute the
legally valid and binding obligations of the Issuer entitled to the benefits of
the Indenture and enforceable against the Issuer in accordance with their terms
(subject to the receivership, convservatorship and supervisory powers of both
regulatory agencies as well as applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other similar laws affecting creditors'
rights generally from time to time in effect, and subject, as as to
enforceability, to general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.)
3. This Agreement shall be deemed to be a contract made under the
laws of the State of New York, and for all purposes shall be governed by and
construed in accordance with the laws of said State, without regard to conflicts
of law principles thereof.
1.
IN WITNESS WHEREOF, the parties hereto have caused this Debenture
Purchase Agreement to be duly executed as of the date hereof.
QUALCOMM INCORPORATED
By: /s/ Irwin Mark Jacobs
-------------------------------------
Name: Irwin Mark Jacobs
Title: Chief Executive Officer
QUALCOMM FINANCIAL TRUST I
By: /s/ Anthony S. Thornley
-------------------------------------
Name: Anthony S. Thornley
Title: Regular Trustee
2.
EXHIBIT D
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION
OF TRANSFER FROM RESTRICTED GLOBAL PREFERRED SECURITY TO REGULATION
S GLOBAL PREFERRED SECURITY
(Pursuant to Section 9.2(c) of the Declaration)
Wilmington Trust Company
1100 North Market Street
Ninth Floor
Wilmington, Delaware 19890
Attention: ___________________
RE: 5 3/4% Trust Convertible Preferred Securities of QUALCOMM
Financial Trust I
Dear Ladies and Gentlemen:
Reference is hereby made to the Amended and Restated Declaration of
Trust, dated as of February 25, 1997 (the "Declaration"), of QUALCOMM Financial
Trust I, a Delaware business trust (the "Trust") , among QUALCOMM Incorporated,
as Sponsor, and the several trustees named therein. Capitalized terms used but
not defined herein shall have the meanings given to them in the Declaration.
This letter relates to _________ (number) Convertible Preferred
Securities which are evidenced by one or more Restricted Global Preferred
Securities and held with the Depositary in the name of _____________________
(the "Transferor"). The Transferor has requested a transfer of such beneficial
interest in the Convertible Preferred Securities to a Person who will take
delivery thereof in the form of an equal number of Convertible Preferred
Securities evidenced by one or more Regulation S Global Preferred Securities,
which amount, immediately after such transfer, is to be held with the Depositary
through Euroclear or CEDEL or both.
In connection with such request and in respect of such Convertible
Preferred Securities, the Transferor hereby certifies that such transfer has
been effected in compliance with the transfer restrictions applicable to the
Convertible Preferred Securities and pursuant to and in accordance with Rule 903
or Rule 904 under the United States Securities Act of 1933, as amended (the
"Securities Act"), and accordingly the Transferor hereby further certifies that:
(1) The offer of the Convertible Preferred Securities was not made
to a person in the United States;
(2) either:
(a) at the time the buy order was originated, the
transferee was outside the United States or the
Transferor and any person acting on its behalf
reasonably believed and believes that the transferee
was outside the United States; or
D-1
(b) the transaction was executed in, on or through the
facilities of a designated offshore securities market
and neither the Transferor nor any person acting on
its behalf knows that the transaction was prearranged
with a buyer in the United States;
(3) no directed selling efforts have been made in contravention of
the requirements of Rule 904(b) of Regulation S;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) upon completion of the transaction, the beneficial interest
being transferred as described above is to be held with the
Depositary through Euroclear or CEDEL or both.
(6) With respect to transfers made in reliance on Rule 144, the
Convertible Preferred Securities are being transferred in a
transaction permitted by Rule 144 under the Securities Act;
and with respect to transfer made in reliance on Rule 144A,
that such Convertible Preferred Securities are being
transferred in accordance with Rule 144A under the Securities
Act to a transferee that the Transferor reasonably believes is
purchasing the Convertible Preferred Securities for its own
account or an account with respect to which the transferee
exercises sole investment discretion and the transferee and
any such account is a "qualified institutional buyer" within
the meaning of Rule 144A, in a transaction meeting the
requirements of Rule 144A and in accordance with applicable
securities laws of any state of the United States or any other
jurisdiction.
In addition, if the sale is made during a restricted period and the
provisions of Rule 903 (c) (2) or (3) or Rule 904(c)(1) of Regulation S are
applicable thereto, we confirm that such sale has been made in accordance with
the applicable provisions of Rule 903 (c) (2) or (3) or Rule 904(c)(1), as the
case may be.
Upon giving effect to this request to exchange a beneficial interest in
a Restricted Global Preferred Security for a beneficial interest in a Regulation
S Global Preferred Security, the resulting beneficial interest shall be subject
to the restrictions on transfer applicable to Regulation S Global Preferred
Securities pursuant to the Declaration and the Securities Act.
D-2
This certificate and the statements contained herein are made for your
benefit and the benefit of the Trust and the Initial Purchasers under the
Purchase Agreement, and you and each of them are entitled to rely on the
contents of this certificate. Terms used in this certificate and not otherwise
defined in the Declaration have the meanings set forth in Regulation S under the
Securities Act.
________________________________________
[Insert Name of Transferor]
By: ____________________________________
Name:
Title:
Dated:___________________
D-3
EXHIBIT E
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM REGULATION S GLOBAL PREFERRED SECURITY
TO RESTRICTED GLOBAL PREFERRED SECURITY
(Pursuant to Section 9.2(d) of the Declaration)
Wilmington Trust Company
1100 North Market Street
Ninth Floor
Wilmington, Delaware 19890
Attention: _______________________
RE: 5 3/4% Trust Convertible Preferred Securities of QUALCOMM
Financial Trust I
Dear Ladies and Gentlemen:
Reference is hereby made to the Amended and Restated Declaration of
Trust, dated as of February 25, 1997 (the "Declaration"), of QUALCOMM Financial
Trust I, a Delaware business trust (the "Trust") , among QUALCOMM Incorporated,
as sponsor, and the several trustees named therein. Capitalized terms used but
not defined herein shall have the meanings given to them in the Declaration.
This letter relates to _________ (number) Convertible Preferred
Securities which are evidenced by one or more Regulation S Global Preferred
Securities and held with the Depositary through Euroclear or CEDEL or both in
the name of _____________________ (the "Transferor"). The Transferor has
requested a transfer of such beneficial interest in the Convertible Preferred
Securities to a Person who will take delivery thereof in the form of an equal
number of Convertible Preferred Securities evidenced by one or more Restricted
Global Preferred Securities, which amount, immediately after such transfer, is
to be held with the Depositary.
In connection with such request and in respect of such Convertible
Preferred Securities, the Transferor hereby certifies that:
[CHECK ONE]
/ / such transfer is being effected pursuant to and in accordance
with Rule 144A under the United States Securities Act of 1933,
as amended (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the Convertible
Preferred Securities are being transferred to a Person that
the Transferor reasonably believes is purchasing the
Convertible Preferred Securities for its own account, or for
one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the
meaning of Rule 144A in a transaction meeting the requirements
of Rule 144A;
or
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/ / such transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
or
/ / such transfer is being effected pursuant to an effective
registration statement under the Securities Act;
or
/ / such transfer is being effected pursuant to an exemption from
the registration requirements of the Securities Act other than
Rule 144A or Rule 144, and the Transferor hereby further
certifies that the Convertible Preferred Securities are being
transferred in compliance with the transfer restrictions
applicable to the Convertible Preferred Securities and in
accordance with the requirements of the exemption claimed,
which certification is supported by such legal opinions or
other information provided by the Transferor or the transferee
(a copy of which the Transferor has attached to this
certification) in form reasonably acceptable to the Trust, to
the effect that such transfer is in compliance with the
Securities Act;
and such Convertible Preferred Securities are being transferred in compliance
with any applicable blue sky securities laws of any state of the United States.
Upon giving effect to this request to exchange a beneficial interest in
Regulation S Global Preferred Securities for a beneficial interest in Restricted
Global Preferred Securities, the resulting beneficial interest shall be subject
to the restrictions on transfer applicable to Restricted Global Preferred
Securities pursuant to the Declaration and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Trust and the Initial Purchasers under the
Purchase Agreement, and you and each of them are entitled to rely on the
contents of this certificate. Terms used in this certificate and not otherwise
defined in the Declaration have the meanings set forth in Regulation S under the
Securities Act.
________________________________________
[Insert Name of Transferor]
By:________________________________
Name:
Title:
Date:________________,________
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