EXHIBIT 4
SECOND SUPPLEMENTAL INDENTURE
(Dated as of April 16, 1998)
-----------------------------
VASTAR RESOURCES, INC.
AND
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
As Trustee
AND
BANK OF MONTREAL TRUST COMPANY,
As Paying Agent
-----------------------------
(Supplemental to Indenture dated as of January 1, 1995, as supplemented on
May 18, 1995)
This SECOND SUPPLEMENTAL INDENTURE (the "Supplemental Indenture"),
dated as of April 16, 1998 (the "Execution Date"), by and among Vastar
Resources, Inc., a Delaware corporation (the "Company"), ▇▇▇▇▇▇ Trust and
Savings Bank, an Illinois banking corporation, as trustee (the "Trustee") and
Bank of Montreal Trust Company, as paying agent (the "Paying Agent").
WHEREAS, the Company and NationsBank of Texas, N.A. (the "Resigned
Trustee"), entered into an indenture, dated as of January 1, 1995 (the "Original
Indenture"), providing for the issuance by the Company from time to time of the
Company's unsecured debentures, notes or other evidences of indebtedness; and
WHEREAS, the Company, the Resigned Trustee, the Trustee and the Paying
Agent, entered into an indenture supplemental to the Indenture, dated as of May
18, 1995, providing for the resignation of the Resigned Trustee and the
appointment of the Trustee and the Paying Agent (the Original Indenture as
supplemented on May 18, 1995, hereinafter referred to as the "Indenture"); and
WHEREAS, Section 301 of the Indenture provides that the aggregate
principal amount of Securities which may be authenticated and delivered pursuant
to the Indenture is unlimited; and
WHEREAS, Section 301 of the Indenture provides that the terms of any
issuance of Securities under the Indenture shall be established in one or more
indentures supplemental thereto prior to any such issuance;
NOW, THEREFORE, pursuant to the Indenture and in consideration of the
covenants herein contained, it is agreed as follows (words and phrases not
otherwise defined in this Supplemental Indenture shall have the meaning given
thereto in the Indenture):
Section 1. The Securities. There shall be a series of Securities designated
"6% Putable/Callable Notes due April 20, 2010" (the "Notes"), limited in
aggregate principal amount to $100,000,000. The Notes shall be in substantially
the form attached hereto as Annex I and incorporated herein by this reference.
The maturity date of the Notes, the rate or rates at which the Notes shall bear
interest, and the other terms of the Notes are as set forth in Annex I hereto
and, to the extent not therein set forth, as provided in the following sections.
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Section 2. (a) Call Option. The Company, or any successor and assign (in such
capacity, the "Callholder"), has the right to purchase the Notes, issued
pursuant to the prospectus supplement dated as of April 16, 1998 (the
"Prospectus Supplement") in whole but not in part on April 20, 2000 (the "Coupon
Reset Date") (the "Call Option"), at a price equal to 100% of the principal
amount thereof (the "Call Price"), by giving Notice to the Trustee ("Call
Notice"). Unpaid interest accrued to but excluding the Coupon Reset Date will be
paid by the Company on such date to the holders on the most recent Record Date.
In the event of the exercise of the Call Option, (i) the Callholder shall
deliver immediately available funds equal to the Call Price to the Trustee not
later than 2:00 p.m., New York time, on the Business Day prior to the Coupon
Reset Date for payment of the Call Price on the Coupon Reset Date and (ii) the
holders of the Notes shall be required to deliver the Notes to the Callholder
against payment therefor on the Coupon Reset Date. Upon delivery of the Call
Price, subject to the provisions of paragraph (c) below, all of the Notes will
be delivered to the account of the Callholder by book-entry through the
facilities of DTC and the Trustee will make payment to the DTC participant of
each holder's Notes, by book-entry through DTC by the close of business on the
Coupon Reset Date. If the Callholder shall fail to pay the Call Price by 2:00
p.m., New York time, on the Business Day prior to the Call Date, then (A) the
Call Option shall immediately terminate and (B) no amount shall be payable as a
result of such termination.
(b) Notice. The Callholder must deliver irrevocable, written notice
(the "Call Notice") to the Trustee of its exercise of the Call Option prior to
4:00 p.m., New York time, no later than fifteen (15) calendar days prior to the
Coupon Reset Date.
(c) Termination of Call Option. If, at any time on or prior to the
exercise of the Call Option, (i) an Event of Default with respect to the Notes
shall have occurred or (ii) an "Event of Default" with respect to any senior
indebtedness of the Company shall have occurred as such Event of Default is
defined in any note, indenture, credit agreement or other similar document
relating to such senior indebtedness and as a result of such Event of Default
the Company is required to repay with respect to such indebtedness more than
$25,000,000, then (A) the Call Option shall terminate and (B) no amount shall be
payable as a result of such termination.
(d) Successors and Assigns. The Callholder may at any time assign
its rights and obligations under the Call Option; provided that (i) it assigns
its rights and obligations in whole and not in part and (ii) it provides the
Trustee with written
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notice of such assignment contemporaneously with such assignment. Upon receipt
of notice of assignment, the Trustee agrees to treat the assignee as Callholder
for all purposes hereunder. The Callholder may assign its rights under the Call
Option without notice to, or consent of, the holders of the Notes.
Section 2. Put Option. If the Call Option has not been exercised, or in the
event the Callholder is not required or fails to deliver the Call Price to the
Trustee by 2:00 p.m., New York time, on the Business Day prior to the Coupon
Reset Date, the Trustee will be required, for and on behalf of the holders of
the Notes, to exercise the option to put the Notes to the Company pursuant to
the Put Option. Upon exercise of the Put Option, the Company will be required to
purchase all of the Notes on the Coupon Reset Date, at a purchase price equal to
100% of the entire principal amount thereof (the "Put Redemption Price"). Unpaid
interest accrued to but excluding the Coupon Reset Date will be paid by the
Company on such date to the holders on the most recent Record Date preceding the
Coupon Reset Date. The Put Option will be exercised automatically by the
Trustee, on behalf of the holders, if the Call Option has not been exercised. If
the Put Option is exercised, the Company will deliver the Put Redemption Price
to the Trustee by no later than 12:00 noon, New York time, on the Coupon Reset
Date and the holders of Notes will be required to deliver the Notes to the
Company against payment therefor on the Coupon Reset Date through the facilities
of DTC. No holder of Notes or any interest therein shall have the right to
consent or object to the Trustee's exercise of the Put Option. By its purchase
of Notes, each holder irrevocably agrees that the Trustee shall exercise the Put
Option relating to such Notes for and on behalf of such holder as provided
herein.
Section 3. (a) Appointment of Calculation Agent. The Company hereby appoints
UBS Securities LLC, a limited liability company organized under the laws of the
State of New York (together with the corporation or other entity, if any, into
which UBS Securities LLC may be merged, converted or consolidated in accordance
with clause (j) below, "UBS") as its calculation agent hereunder (in such
capacity, the "Calculation Agent"), and UBS as such Calculation Agent hereby
accepts that appointment, as the Company's agent for the purpose of calculating
the Coupon Reset Rate (as defined below) in accordance with the procedures set
forth herein.
(b) Coupon Reset Process. If the Callholder has exercised the
Call Option in accordance with the procedures set forth above, the Company and
the Calculation Agent shall complete the following steps in order to determine
the interest rate (the "Coupon Reset Rate") to be paid on the Notes from and
including the Coupon Reset Date to but excluding April 20, 2010 (the "Final
Maturity Date").
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The Company and the Calculation Agent shall use reasonable efforts to cause
the actions contemplated below to be completed in as timely a manner as
possible.
(i) The Company shall provide the Calculation Agent with a
list (the "Dealer List"), no later than seven Business Days prior to
the Coupon Reset Date, containing the names and addresses of five
dealers (each a "Dealer"), one of which shall be UBS or its successor
as Calculation Agent, from which it desires the Calculation Agent to
obtain the Bids (as defined below) for the purchase of the Notes. As
used herein, "Business Day" means each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions
in The City of New York generally are authorized or obligated by law
or executive order to close.
(ii) Within one Business Day following receipt by the
Calculation Agent of the Dealer List, the Calculation Agent shall
provide to each Dealer on the Dealer List (a) a copy of the Prospectus
dated November 18, 1994 and a copy of the Prospectus Supplement dated
April 16, 1998, (b) a copy of the form of Notes and (c) a written
request that each such Dealer submit a Bid to the Calculation Agent by
12:00 noon, New York time (the "Bid Deadline"), on the third Business
Day prior to the Coupon Reset Date (the "Bid Date"). "Bid" shall mean
an irrevocable written offer given by a Dealer for the purchase of all
the Notes subject to the exercise of the Call Option settling on the
Coupon Reset Date, and shall be quoted by such Dealer as a stated
yield to maturity on the Notes ("Yield to Maturity"). Concurrently
with the delivery of the documents made pursuant to the first sentence
of this clause (ii), the Calculation Agent shall also provide each
Dealer with (a) the name of the Company, (b) an estimate of the
Purchase Price (which shall be stated as a United States Dollar amount
and be calculated by the Calculation Agent in accordance with clause
(iii) below), (c) the principal amount and maturity of the Notes and
(d) the method by which interest will be calculated on the Notes.
(iii) The entire purchase price to be paid by any Dealer for
the Notes (the "Purchase Price") shall be equal to (a) the entire
principal amount of the Notes plus (b) a premium (the "Notes Premium")
which shall be equal to the excess, if any, of (x) the discounted
present value
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to the Coupon Reset Date of a bond with a maturity of April 20, 2010
which has an interest rate of 5.443%, semi-annual interest payments on
each April 20 and October 20, commencing October 20, 2000, on a
principal amount of $100,000,000, and assuming a discount rate equal
to the Treasury Rate (discounting to be on a semi-annual basis), over
(y) $100,000,000. "Treasury Rate" means the per annum rate equal to
the offer side yield to maturity of the current on-the-run 10-year
United States Treasury Security per Telerate page 500 at 11:00 a.m.,
New York time, on the Bid Date (or such other date or time that may be
agreed upon by the Company and the Calculation Agent) or, if such rate
does not appear on Telerate page 500 at such time, the rates on GovPx
End-of-Day Pricing at 3:00 p.m., New York time, on the Bid Date (or
such other date or time that may be agreed upon by the Company and the
Calculation Agent).
(iv) Immediately following receipt of the Bids, and in no event
later than 12:30 p.m., New York time, on the Bid Date, the Calculation
Agent shall provide written notice to the Company setting forth (a)
the names of each of the Dealers from whom the Calculation Agent
received Bids on the Bid Date, (b) the Bid submitted by each such
Dealer and (c) the Purchase Price as determined pursuant to paragraph
(iii) hereof. Except as provided below, the Calculation Agent shall,
on the Bid Date, select from the Bids received the Bid with the lowest
Yield to Maturity (the "Selected Bid") and establish the Coupon Reset
Rate at a rate equal to the interest rate which would amortize the
Notes Premium fully over the term of the Notes at the Yield to
Maturity indicated by the Selected Bid; provided, however, that if the
Calculation Agent has not received a Bid from a Dealer by the Bid
Deadline, the Selected Bid shall be the lowest of all Bids received by
such time; and provided, further that if any two or more of the lowest
Bids submitted are equivalent, the Company shall in its sole
discretion select any of such equivalent Bids (and such selected Bid
shall be the Selected Bid). The Calculation Agent shall notify the
Dealer that submitted the Selected Bid by 12:30 p.m., New York time,
on the Bid Date that its Bid has been selected.
(v) Immediately after calculating the Coupon Reset Rate, and in
no event later than 12:30 p.m., New York time, on the Bid Date, the
Calculation Agent shall provide written notice to the Company
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and the Trustee, setting forth the Coupon Reset Rate. The Company
shall thereafter establish the Coupon Reset Rate as the new interest
rate on the Notes, effective from and including the Coupon Reset Date,
by delivering an officers' certificate to the Trustee on or before the
Coupon Reset Date.
(vi) the Callholder shall sell the Notes to the Dealer that
made the Selected Bid at the Purchase Price, such sale to be settled
on the Coupon Reset Date in immediately available funds.
(c) Termination of Call Option. If the Calculation Agent
determines, following the exercise of the Call Option, that (i) since the
delivery of the Call Notice, an Event of Default with respect to the Notes, or
an event which, with the giving of notice or the passage of time, or both, would
constitute an Event of Default with respect to the Notes, shall have occurred
and be continuing, (ii) since the delivery of the Call Notice, a Market
Disruption Event (as defined below) has occurred or (iii) fewer than two Dealers
have provided Bids in a timely manner substantially as provided above, the Call
Option will automatically terminate, and the Trustee will exercise the Put
Option on behalf of the holders. "Market Disruption Event" shall mean any of
the following, as determined by both the Calculation Agent and the Company: (i)
a suspension or material limitation in trading in securities generally on the
New York Stock Exchange or the establishment of minimum prices on such exchange;
(ii) a general moratorium on commercial banking activities declared by either
federal or New York State authorities; (iii) any material adverse change in the
existing financial, political or economic conditions in the Unites States of
America; (iv) an outbreak or escalation of major hostilities involving the
United States of America or the declaration of a national emergency or war by
the United States of America; or (v) any material disruption of the U.S.
government securities market, U.S. corporate bond market, or U.S. federal wire
system.
(d) Rights and Liabilities of Calculation Agent. The Calculation
Agent shall incur no liability for, or in respect of, any action taken, omitted
to be taken or suffered by it in reliance upon any certificate, affidavit,
instruction, notice, request, direction, order, statement or other paper,
document or communication reasonably believed by it to be genuine. Any order,
certificate, affidavit, instruction, notice, request, direction, statement or
other communication from the Company made or given by it and sent, delivered or
directed to the Calculation Agent under, pursuant to, or as permitted by, any
provision of this Indenture shall be sufficient for purposes of this Indenture
if such communication is in writing and signed by any
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officer or attorney-in-fact of the Company. The Calculation Agent may consult
with counsel satisfactory to it and the advice of such counsel shall constitute
full and complete authorization and protection of the Calculation Agent with
respect to any action taken, omitted to be taken or suffered by it hereunder in
good faith and in accordance with and in reliance upon the written advice of
such counsel.
(e) Right of Calculation Agent to Own Notes, etc. The Calculation
Agent and its officers, employees and shareholders, may become owners of, or
acquire any interests in, Notes, with the same rights as if the Calculation
Agent were not the Calculation Agent hereunder. The Calculation Agent may
engage in, or have an interest in, any financial or other transaction with the
Company or any of its affiliates as if the Calculation Agent were not the
Calculation Agent hereunder.
(f) Duties of Calculation Agent. In acting under this Indenture in
connection with the Notes, the Calculation Agent shall be obligated only to
perform such duties as are specifically set forth herein and no other duties or
obligations on the part of the Calculation Agent, in its capacity as such, shall
be implied by this Indenture. In acting under this Indenture, the Calculation
Agent (in its capacity as such) assumes no obligation towards, or any
relationship of agency or trust for or with, the holders of the Notes.
(g) Termination, Resignation or Removal of Calculation Agent. The
Company may at any time appoint a new Calculation Agent other than the incumbent
Calculation Agent if Reasonable Cause exists at such time by giving written
notice to the incumbent Calculation Agent and specifying the date when the
termination shall become effective. "Reasonable Cause" shall mean the failure
or inability of the incumbent Calculation Agent to perform any obligations it
may have hereunder for any reason. The incumbent Calculation Agent may resign
at any time as Calculation Agent, such resignation to be effective ten (10)
Business Days after delivery to the Company and the Trustee of notice of such
resignation. In that event, the Company shall appoint a successor Calculation
Agent.
(h) Appointment of Successor Calculation Agent. Any successor
Calculation Agent appointed pursuant to the provisions of the foregoing
paragraph (g) shall execute and deliver to the predecessor Calculation Agent and
to the Company an instrument accepting such appointment and thereupon such
successor Calculation Agent shall, without any further act or instrument, become
vested with all the rights, immunities, duties and obligations of the
Calculation Agent, with like effect as if originally named as the initial
Calculation Agent hereunder, and the
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predecessor Calculation Agent shall thereupon be obligated to transfer and
deliver, and such successor Calculation Agent shall be entitled to receive and
accept, copies of any available records maintained by the predecessor
Calculation Agent in connection with the performance of its obligations
hereunder.
(i) Indemnification. The Company shall indemnify and hold harmless
UBS or any successor Calculation Agent, and their respective officers and
employees from and against all actions, claims, damages, liabilities, losses and
reasonable expenses (including reasonable legal fees and expenses) relating to
or arising out of actions or omissions in its capacity as Calculation Agent
hereunder, except actions, claims, damages, liabilities, losses and expenses
caused by the bad faith, negligence or wilful misconduct of UBS or any successor
Calculation Agent, or their respective officers or employees. This clause (i)
shall survive the termination of this Indenture and the payment in full of all
obligations under the Notes, whether by redemption, repayment or otherwise.
(j) Merger, Consolidation or Sale of Business by Calculation Agent.
Any corporation or other entity into which the Calculation Agent may be merged,
converted or consolidated, or any corporation or other entity resulting from any
merger, conversion or consolidation to which the Calculation Agent may be a
party, or any corporation or other entity to which the Calculation Agent may
sell or otherwise transfer all or substantially all of its business, shall, to
the extent permitted by applicable law, become the Calculation Agent under this
Indenture without the execution of any document or any further act by the
parties hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture
to be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the date and year first above written.
VASTAR RESOURCES, INC.
as Company
Attest: By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇ Title: Treasurer
---------------------------- ------------------------------
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
as Trustee
Attest: By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Title:
---------------------------- ------------------------------
BANK OF MONTREAL TRUST COMPANY,
as Paying Agent
Attest: By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Title:
---------------------------- ------------------------------
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ANNEX I
FORM OF NOTE
11
FORM OF NOTE
------------
UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) TO
THE ISSUER OR ITS AGENT FOR THE REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
VASTAR RESOURCES, INC.
PUTABLE/CALLABLE NOTE
(FIXED RATE)
REGISTERED PRINCIPAL AMOUNT
No. $100,000,000
INTEREST PAYABLE EACH APRIL 20 AND OCTOBER 20 AND AT MATURITY
CUSIP ▇▇▇▇▇▇▇▇▇
ORIGINAL ISSUE DATE: APRIL 20, 1998
INITIAL INTEREST RATE: 6%
MATURITY DATE: APRIL 20, 2010
COUPON RESET DATE: APRIL 20, 2000
CALCULATION AGENT: UBS Securities LLC
OTHER PROVISIONS: As set forth on Exhibit A to this Note.
VASTAR RESOURCES, INC., a Delaware corporation (herein called the "Company"),
for value received, hereby promises to pay to Cede & Co. or registered assigns,
the principal amount of ONE HUNDRED MILLION U.S. DOLLARS on the Maturity Date
set forth above at the office or agency of the Company for such payment in The
City of New York, in such coin or currency of the United States of America as at
the time of payment shall be legal tender for the payment of public and private
debts, and to pay interest on said principal amount until maturity at the rate
per annum (on the basis of a 360-day year consisting of twelve 30-day months or
as otherwise provided above) equal to the Initial Interest Rate shown above
until the Coupon Reset Date and thereafter at a rate determined in accordance
with the provisions set forth on Exhibit A to this Note attached hereto under
"Coupon Reset Process" and on the reverse hereof, at such office or agency, in
like coin or currency, semi-annually on April 20 and October 20 of each year or
as otherwise provided above (each an "Interest Payment Date"), until the date on
which payment of said principal amount has been made or duly provided for, and
on such date. Unless otherwise provided above, such interest shall be payable
from the date hereof or from the most recent date to which interest has been
paid. Except as otherwise provided below or in the Indenture hereinafter
referred to and in the next sentence, the interest payable hereon on any April
20, or October 20, or such other date on which interest hereon is payable shall
be payable to the person in whose name this Note is registered on the fifteenth
calendar day (whether or not a Business Day) immediately preceding such April 20
or October 20 (the "Record Date"), or such other date on which interest hereon
is payable and may be paid, at the option of the Company, by check mailed to the
person entitled thereto at his address appearing in the Note Register (as
defined in the Indenture hereinafter referred to). Any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
holder on such Record Date and may either be paid to the person in whose name
this Note (or one or more predecessor notes) is registered at the close of
business on a special record date (the "Special Record Date") for the payment of
such defaulted interest to be fixed by the Trustee, notice whereof shall be
given to the holder of this Note not less than 10 days prior to such Special
Record Date. Interest payable hereon on the Maturity Date set forth above shall
be payable to the same person to whom the principal amount hereof shall be
payable. Unless otherwise specified above, if the date of this Note is between
the last calendar day of the month next preceding an April 20, or October 20, or
other interest payment date and on April 20, or October 20, then the first
payment of interest hereon shall be made on the April 20 or October 20 following
the next succeeding Record Date to the registered owner on such Record Date. If
any Interest Payment Date or the Maturity Date falls on a day that is not a
Business Day, payment of principal or interest will be made on the next Business
Day as if it were made on the date such payment was due, and no interest will
accrue on the amount so payable for the period from and after such Interest
Payment Date or the Maturity Date, as the case may be.
Unless the Certificate of Authentication hereon has been executed by the
Trustee by the manual signature of one of its authorized officers, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
The provisions of this Note are continued on the reverse hereof and on
Exhibit A attached hereto and such continued provisions shall for all purposes
have the same effect as though fully set forth at this place.
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IN WITNESS WHEREOF, VASTAR RESOURCES, INC. has caused this Instrument to be
signed manually or by facsimile signature by its Chairman of the Board of
Directors, a Vice Chairman of the Board of Directors, President, a Member of the
Office of the President or one of its Vice Presidents and by its Treasurer or
one of its Assistant Treasurers or its Secretary or one of its Associate or
Assistant Secretaries, and a facsimile of its corporate seal to be affixed
hereunto or imprinted hereon.
VASTAR RESOURCES, INC.
By
----------------------------------
Name:
Title:
By
----------------------------------
Associate Secretary
[FORM OF REVERSE OF NOTE]
This Note is a Global Security evidencing a portion of a duly authorized
issue of notes of the Company, designated generally as its Putable/Callable
Notes (the "Notes"). The Notes are all issued or to be issued under and
pursuant to the Indenture dated as of January 1, 1995 as supplemented by the
Supplemental Indenture dated as of May 18, 1995 and the Second Supplemental
Indenture dated as of April 16, 1998 (collectively, the "Indenture"), duly
executed and delivered by ▇▇▇▇▇▇ Trust and Savings Bank, as trustee (the
"Trustee") and the Bank of Montreal Trust Company, as paying agent, to which
Indenture and all indentures supplemental thereto reference is hereby made for a
description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the holders of the Notes.
The Notes constitute a single series for purposes of the Indenture.
In case an Event of Default, as defined in the Indenture, with respect to
the Notes shall have occurred and be continuing, the principal hereof 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 provides that the holders of a majority in aggregate principal
amount of the Notes at the time outstanding may on behalf of the holders of all
of the Notes waive any past default under the Indenture and its consequences,
except a default in the payment of principal of or interest on any of the Notes,
in the manner and to the extent 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 Notes at the time outstanding, evidenced as in the
Indenture provided, to execute supplemental indentures adding any provisions to
or changing in any manner or eliminating any of the provisions of the Indenture
or of any supplemental indenture or modifying in any manner the rights of the
holders of the Notes; provided, however, that no such supplemental Indenture
shall (i) extend the fixed maturity of any Note, or reduce the principal amount
thereof, or reduce the rate or extend the time of payment of interest thereon,
or make the principal thereof or interest thereon payable in any coin or
currency other than that hereinabove provided, without the consent of the holder
of each Note so affected, or (ii) reduce the aforesaid percentage of Notes, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of all Notes then outstanding.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditioned, to pay the principal of and interest on this Note at
the time and place and at the rate and in the coin or currency herein
prescribed.
The Notes are issuable as registered Notes only, in the denomination of
$1,000 and any larger denomination which is an integral multiple of $1,000
approved by the Company, such approval to be evidenced by the execution thereof.
This Note is transferable by the registered holder hereof in person or by
his attorney duly authorized in writing on the books of the Company at the
office or agency to be maintained by the Company for that purpose in The City of
New York, but only in the manner subject to the limitations and upon payment of
any tax or governmental charge for which the Company may require reimbursement
as provided in the Indenture, and upon surrender and cancellation of this Note.
Subject to limitations set forth in the Indenture, upon any registration of
transfer, a new registered Note or Notes, of authorized
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denomination or denominations, and in the same aggregate principal amount, will
be issued to the transferee in exchange therefor.
The Company, the Trustee, any paying agent, and any Note registrar may deem
and treat the registered holder hereof as the absolute owner of this Note
(whether or not this Note shall be overdue and notwithstanding any notations of
ownership or other writing hereon made by anyone other than the Note registrar)
for the purpose of receiving payment of or on account of the principal hereof
and interest due hereon, as herein provided and for all other purposes, and
neither the Company nor the Trustee nor any paying agent nor any Note registrar
shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or interest on
this Note, or for any claim based hereon, or otherwise in respect hereof, or
based on or in respect of the Indenture or any indenture supplemental thereto,
against any incorporator, stockholder, officer or director, as such past,
present or future, of the Company or of any 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 issue hereof, expressly waived
and released.
Notwithstanding any other provision of this Note, unless and until it is
exchanged in whole or in part for Notes in definitive form, this Global Security
representing all or a portion of the Notes may not be transferred except as a
whole by the Depositary for such Notes to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee to a successor
Depositary for these Notes or a nominee of such successor Depositary.
The Notes are not redeemable prior to maturity but are subject to the Call
Option and are entitled to the Put Option described on Exhibit A to this Note.
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This Note shall be deemed to be a contract made under the laws of the State
of New York, and for all purposes shall be construed in accordance with the laws
of said State.
CERTIFICATE OF AUTHENTICATION
Dated: April 21, 1998
This is one of the Notes of the series designated herein issued under the
within-mentioned Indenture.
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
as Trustee
By:
--------------------------------
Name:
Title:
6
---------------------------------
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common UNIF GIFT MIN ACT ____ Custodian ____
TEN ENT - as tenants by the entries (Cust) (Minor)
JT TEN - as joint tenants with
right of survivorship _______________
and not as tenants (State)
in common
Additional abbreviations may also be used though not in the above list.
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FOR VALUE RECEIVED the undersigned hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING OF ASSIGNEE {............} ________________________________
(Please print or
__________________________________________________________________________
typewrite name and address of assignee)
the within Note of Beneficial Corporation and hereby does irrevocably constitute
and appoint_____________________________________________________________________
Attorney to transfer the said Note on the books of the within-mentioned Company,
with full power of substitution in the premises.
Dated: _________________ __________________________________________________
NOTICE: The signature to this assignment must
correspond with the name as written upon the face
of the Note in every particular without alteration
or enlargement or any change whatever.
__________________________________________________
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EXHIBIT A
OTHER PROVISIONS
CALL OPTION; PUT OPTION
The Company and any of its assigns, including, but not limited to, Union
Bank of Switzerland, London branch (the "Callholder") has the right to purchase
this Note in whole but not in part on the Coupon Reset Date (as defined above)
(the "Call Option"), at a price equal to 100% of the principal amount hereof
(the "Call Price"), by giving notice to the Trustee (the "Call Notice"). Unpaid
interest accrued to but excluding the Coupon Reset Date will be paid by the
Company on such date to the holders on the most recent Record Date preceding the
Coupon Reset Date. In order to exercise the Call Option, the Callholder must
deliver the Call Notice to the Trustee, in writing, prior to 4:00 p.m., New York
time, no later than 15 calendar days prior to the Coupon Reset Date. In the
event of exercise of the Call Option, then (i) the Callholder shall deliver
immediately available funds equal to the Call Price to the Trustee not later
than 2:00 p.m., New York time, on the Business Day prior to the Coupon Reset
Date, for payment of the Call Price on the Coupon Reset Date and (ii) the
holders of the Notes shall be required to deliver the Notes to the Callholder
against payment therefor on the Coupon Reset Date through the facilities of the
Depositary.
If the Callholder elects to exercise the Call Option, the obligation of the
Callholder to pay the Call Price is subject to certain conditions precedent
including the following: (i) since the date of the Call Notice, no Event of
Default (as defined in the Indenture) with respect to the Notes, or any event
which, with the giving of notice or passage of time, or both would constitute an
Event of Default with respect to the Notes, shall have occurred and be
continuing; (ii) since the date of the Call Notice, no Market Disruption Event
(as defined below) shall have occurred; and (iii) since the date of the Call
Notice, two or more Dealers (as defined below) shall have provided timely Bids
(as defined below) in the manner described below under "Coupon Reset Process."
No holder of Notes or any interest therein shall have any rights or claims
against the Callholder as a result of the Callholder purchasing or not
purchasing the Notes.
If the Call Option has not been exercised, or in the event the Callholder
is not required or fails to deliver the Call Price to the Trustee by 2:00 p.m.,
New York time, on the Business Day prior to the Coupon Reset Date, the Trustee
will, for and on behalf of the holders of the Notes, exercise the put option
(the "Put Option") by giving the Company notice of such exercise not later than
the close of business on the Business Day prior to the Coupon Reset Date. Upon
exercise of the Put Option, the Company will be required to purchase all of the
Notes on the Coupon Reset Date, at a purchase price equal to 100% of the entire
principal amount thereof (the "Put Redemption Price"). Unpaid interest accrued
to but excluding the Coupon Reset Date will be paid by the Company on such date
to the holders on the most recent Record Date preceding the Coupon Reset Date.
The Put Option will be exercised automatically by the Trustee, on behalf of the
holders, if the Call Option has not been exercised. If the Put Option is
exercised, the Company will deliver the Put Redemption Price to the Trustee,
together with the accrued and unpaid interest due on the Coupon Reset Date, by
no later than 12:00 noon, New York time, on the Coupon Reset Date and the
holders of Notes will be required to deliver the Notes to the Company against
payment therefor on the Coupon Reset Date through the facilities of the
Depositary. No holder of Notes or any interest therein has the right to consent
or object to the Trustee's exercise of the Put Option. By its purchase of this
Note, the
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holder irrevocably agrees that the Trustee shall exercise the Put
Option relating to this Note for and on behalf of the holder as provided herein.
COUPON RESET PROCESS
If the Callholder has exercised the Call Option as set forth above under
"Call Option; Put Option," the Company and the Calculation Agent shall complete
the following steps in order to determine the interest rate to be paid on the
Notes from and including the Coupon Reset Date to the Maturity Date. The
Company and the Calculation Agent shall use reasonable efforts to cause the
actions contemplated below to be completed in as timely a manner as possible.
(a) The Company shall provide the Calculation Agent with a list (the
"Dealer List"), no later than seven Business Days prior to the Coupon Reset
Date, containing the names and addresses of five dealers (each, a "Dealer"), one
of which shall be UBS Securities LLC, or its successor as Calculation Agent,
from which it desires the Calculation Agent to obtain the Bids (as defined
below) for the purchase of the Notes. As used herein, "Business Day" means any
day other than a Saturday, a Sunday or a day on which banking institutions in
The City of New York are authorized or obligated by law, executive order or
governmental decree to close.
(b) Within one Business Day following receipt by the Calculation Agent of
the Dealer List, the Calculation Agent shall provide to each Dealer on the
Dealer List (i) a copy of the Prospectus dated November 18, 1994 and a copy of
the Prospectus Supplement dated April 16, 1998 relating to the offering of the
Notes, (ii) a copy of the form of Notes and (iii) a written request that each
Dealer submit a Bid to the Calculation Agent by 12:00 noon, New York time (the
"Bid Deadline"), on the third Business Day prior to the Coupon Reset Date (the
"Bid Date"). "Bid" shall mean an irrevocable written offer given by a Dealer
for the purchase of all the Notes subject to the exercise of the Call Option
settling on the Coupon Reset Date, and shall be quoted by such Dealer as a
stated yield to maturity on the Notes (the "Yield to Maturity"). The
Calculation Agent shall also provide each Dealer with (i) the name of the
Company, (ii) an estimate of the Purchase Price (as defined below) (which shall
be stated as a United States dollar amount and be calculated by the Calculation
Agent in accordance with clause (c) below), (iii) the principal amount and
maturity of the Notes and (iv) the method by which interest will be calculated
on the Notes.
(c) The entire purchase price to be paid by any Dealer for the Notes (the
"Purchase Price") shall be equal to (i) the entire principal amount of the Notes
plus (ii) a premium (the "Notes Premium") which shall be equal to the excess, if
any, of (A) the discounted present value to the Coupon Reset Date of a bond,
with a maturity of April 20, 2010 which has an interest rate of 5.443%, semi-
annual interest payments on each April 20 and October 20, commencing October 20,
2000, and a principal amount of $100,000,000, and assuming a discount rate equal
to the Treasury Rate (as defined below), over (B) $100,000,000. "Treasury Rate"
means the per annum rate equal to the offer side yield to maturity of the
current on-the-run 10-year United States Treasury Security per Telerate page 500
at 11:00 a.m., New York time, on the Bid Date (or such other date or time that
may be agreed upon by the Company and the Calculation Agent), or, if such rate
does not appear on Telerate page 500 at such time, the rates on GovPx End-of-Day
Pricing at 3:00 p.m., New York time, on the Bid Date (or such other date or time
that may be agreed upon by the Company and the Calculation Agent).
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(d) Immediately following receipt of the Bids, and in no event later than
12:30 p.m., New York time, on the Bid Date, the Calculation Agent shall provide
written notice to the Company, setting forth (i) the names of each of the
Dealers from whom the Calculation Agent received Bids on the Bid Date, (ii) the
Bid submitted by each such Dealer and (iii) the Purchase Price as determined
pursuant to paragraph (c) above. Except as provided below, the Calculation Agent
shall on the Bid Date select from the Bids received the Bid with the lowest
Yield to Maturity (the "Selected Bid") and establish the Coupon Reset Rate for
the Notes at a rate equal to the interest rate which would amortize the Notes
Premium fully over the term of the Notes at the Yield to Maturity indicated by
the Selected Bid; provided, however, that if the Calculation Agent has not
received a Bid from a Dealer by the Bid Deadline, the Selected Bid shall be the
lowest of all Bids received by such time and provided, further that if any two
or more of the lowest Bids submitted are equivalent, the Company shall in its
sole discretion select any of such equivalent Bids (and such selected Bid shall
be the Selected Bid). The Calculation Agent shall notify the Dealer that
submitted the Selected Bid by 12:30 p.m., New York time, on the Bid Date that
its Bid has been selected.
(e) Immediately after calculating the Coupon Reset Rate, and in no event
later than 12:30 p.m., New York time, on the Bid Date, the Calculation Agent
shall provide written notice to the Company and the Trustee, setting forth such
Coupon Reset Rate. The Company shall thereafter establish the Coupon Reset Rate
as the new interest rate on the Notes, effective from and including the Coupon
Reset Date, by delivering an officers' certificate to the Trustee on or before
the Coupon Reset Date.
(f) The Callholder shall sell the Notes to the Dealer that made the
Selected Bid at the Purchase Price, such sale to be settled on the Coupon Reset
Date in immediately available funds.
If the Calculation Agent determines (which determination must be reflected
in a written notice delivered by the Calculation Agent to the Company and the
Trustee no later than 2:00 p.m., New York time, on the Business Day prior to the
Coupon Reset Date) that (i) since the delivery of the Call Notice, an Event of
Default with respect to the Notes, or an event which, with the giving of notice
or the passage of time, or both, would constitute an Event of Default with
respect to the Notes, shall have occurred and be continuing, (ii) since the
delivery of the Call Notice, a Market Disruption Event (as described below) has
occurred or (iii) fewer than two Dealers have provided Bids in a timely manner
substantially as provided above, the Call Option will automatically terminate,
and the Trustee will exercise the Put Option on behalf of the holders. "Market
Disruption Event" shall mean any of the following, as determined by both the
Calculation and the Company: (i) a suspension or material limitation in trading
in securities generally on the New York Stock Exchange or the establishment of
minimum prices in such exchange; (ii) a general moratorium on commercial banking
activities declared by either federal or New York State authorities; (iii) any
material adverse change in the existing financial, political or economic
conditions in the United States of America; (iv) an outbreak or escalation of
major hostilities involving the United States of America or the declaration of a
national emergency or war by the United States of America; or (v) any material
disruption of the U.S. government securities market, U.S. corporate bond market
or U.S. federal wire system.
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