EXHIBIT 4.16
FORM OF AMENDED AND RESTATED
TRUST AGREEMENT
AMONG
COVANTA ENERGY CORPORATION, AS SPONSOR,
BANKERS TRUST COMPANY
AS PROPERTY TRUSTEE,
WILMINGTON TRUST COMPANY
AS DELAWARE TRUSTEE
AND
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
DATED AS OF --------, 200---
COVANTA CAPITAL TRUST --
Certain Sections of this Trust Agreement Relating
to Section 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture
Act Section Trust Agreement Section
Section 310(a)(1).............................. 8.7
(a)(2)......................................... 8.7
(a)(3)......................................... 8.9
(a)(4)......................................... 2.7(a)(ii)
(a)(5)......................................... 10.10(b)
(b)............................................ 8.8
Section 311(a)................................. 8.13
(b)............................................ 8.13
Section 312(a)................................. 5.7
(b)............................................ 5.7
(c)............................................ 5.7
Section 313(a)................................. 8.14(a)
(b)............................................ 8.14(a)
(c)............................................ 10.8
Section 314(a)................................. 8.15
(b)............................................ 8.15
(c)(1)......................................... 8.16
(c)(2)......................................... 8.16
(c)(3)......................................... 8.16
(d)............................................ 8.16
(e)............................................ 1.1, 8.16
Section 315(a)................................. 8.1(a), 8.3(a)
(b)............................................ 8.2, 10.8
(c)............................................ 8.1(a)
(d)............................................ 8.1, 8.3
(e)............................................ 10.10(a)
Section 316 (a)(1)(A).......................... 6.1(a), (b)
Section 316 (a)(1)(B).......................... 6.1(a), (b)
Section 316 (a)(2) ............................ Not Applicable
(b)............................................ 5.14
(c)............................................ 6.7
Section 317(a)(1).............................. 10.10
(a)(2)......................................... 10.10
(b)............................................ 5.9
Section 318(a)................................. 10.10
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed to
be a part of the Trust Agreement or to have any bearing upon the
interpretation of any of its terms or provisions.
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TABLE OF CONTENTS
Page
Article I. DEFINED TERMS...................................................1
Section 1.1. Definitions..............................................1
Article II. ESTABLISHMENT OF THE TRUST.....................................8
Section 2.1. Name.....................................................8
Section 2.2. Office of the Delaware Trustee;
Principal Place of Business............................8
Section 2.3. Initial Contribution of Trust Property;
Organizational Expenses................................9
Section 2.4. Issuance of the Preferred Securities.....................9
Section 2.5. Issuance of the Common Securities;
Subscription and Purchase of Debt Securities.............9
Section 2.6. Declaration of Trust....................................10
Section 2.7. Authorization to Enter into Certain Transactions........10
Section 2.8. Assets of Trust.........................................14
Section 2.9. Title to Trust Property.................................14
Article III. PAYMENT ACCOUNT..............................................14
Section 3.1. Payment Account.........................................14
Article IV. CERTAIN TERMS OF THE TRUST SECURITIES.........................14
Section 4.1. Distributions...........................................14
Section 4.2. Redemption..............................................16
Section 4.3. Subordination of Common Securities......................17
Section 4.4. Payment Procedures......................................18
Section 4.5. Tax Returns and Reports.................................18
Section 4.6. Payments under Indenture................................19
Article V. TRUST SECURITIES CERTIFICATES..................................19
Section 5.1. Initial Ownership.......................................19
Section 5.2. The Trust Securities Certificates.......................19
Section 5.3. Execution and Delivery of Trust Securities
Certificates..........................................19
Section 5.4. Registration of Transfer and Exchange
of Preferred Securities Certificates..................19
Section 5.5. Mutilated, Destroyed, Lost or Stolen
Trust Securities Certificates.........................20
Section 5.6. Persons Deemed Securityholders..........................21
Section 5.7. Access to List of Securityholders'
Names and Addresses...................................21
Section 5.8. Maintenance of Office or Agency.........................21
Section 5.9. Appointment of Paying Agent.............................21
Section 5.10. Ownership of Common Securities by Sponsor............22
Section 5.11. Book-Entry Preferred Securities Certificates;
Common Securities Certificate........................22
Section 5.12. Notices to Clearing Agency...........................23
Section 5.13. Definitive Preferred Securities Certificates.........23
Section 5.14. Rights of Securityholders............................24
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Article VI. ACTS OF SECURITYHOLDERS; MEETINGS; VOTING.....................25
Section 6.1. Limitations on Voting Rights............................25
Section 6.2. Notice of Meetings......................................26
Section 6.3. Meetings of Preferred Securityholders...................27
Section 6.4. Voting Rights...........................................27
Section 6.5. Proxies, etc............................................27
Section 6.6. Securityholder Action by Written Consent................27
Section 6.7. Record Date for Voting and Other Purposes...............28
Section 6.8. Acts of Securityholders.................................28
Section 6.9. Inspection of Records...................................29
Article VII. REPRESENTATIONS AND WARRANTIES...............................29
Section 7.1. Representations and Warranties of the Property
Trustee and the Delaware Trustee........................29
Section 7.2. Representations and Warranties of Sponsor...............30
Article VIII. THE TRUSTEES................................................31
Section 8.1. Certain Duties and Responsibilities.....................31
Section 8.2. Certain Notices.........................................33
Section 8.3. Certain Rights of Property Trustee......................33
Section 8.4. Not Responsible for Recitals or Issuance
of Securities.........................................35
Section 8.5. May Hold Securities.....................................35
Section 8.6. Compensation; Indemnity; Fees...........................36
Section 8.7. Corporate Property Trustee Required;
Eligibility of Trustees...............................37
Section 8.8. Conflicting Interests...................................37
Section 8.9. Co-Trustees and Separate Trustee........................38
Section 8.10. Resignation and Removal; Appointment
of Successor.......................................39
Section 8.11. Acceptance of Appointment by Successor...............40
Section 8.12. Merger, Conversion, Consolidation or
Succession to Business.............................41
Section 8.13. Preferential Collection of Claims Against
Sponsor or Trust...................................41
Section 8.14. Reports by the Property Trustee......................41
Section 8.15. Reports to the Property Trustee......................42
Section 8.16. Evidence of Compliance with Conditions Precedent.....42
Section 8.17. Number of Trustees...................................42
Section 8.18. Delegation of Power..................................42
Article IX. DISSOLUTION, LIQUIDATION AND MERGER...........................43
Section 9.1. Dissolution Upon Expiration Date........................43
Section 9.2. Early Dissolution.......................................43
Section 9.3. Termination.............................................43
Section 9.4. Liquidation.............................................43
Section 9.5. Mergers, Consolidations, Amalgamations
or Replacements of the Trust..........................45
Article X. MISCELLANEOUS PROVISIONS.......................................46
Section 10.1. Limitation of Rights of Securityholders..............46
Section 10.2. Amendment............................................46
Section 10.3. Separability.........................................47
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Section 10.4. Governing Law........................................47
Section 10.5. Payments Due on Non-Business Day.....................48
Section 10.6. Successors...........................................48
Section 10.7. Headings.............................................48
Section 10.8. Reports, Notices and Demands.........................48
Section 10.9. Agreement Not to Petition............................49
Section 10.10. Trust Indenture Act; Conflict with
Trust Indenture Act................................49
Section 10.11. Acceptance of Terms of Trust Agreement,
Guarantee and Indenture............................49
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AMENDED AND RESTATED TRUST AGREEMENT, dated as of -------------------,
200--, among (i) COVANTA ENERGY CORPORATION, a Delaware corporation (including
any successors or assigns, the "Sponsor"), (ii) BANKERS TRUST COMPANY, a New
York banking corporation, as property trustee, (the "Property Trustee" and, in
its separate corporate capacity and not in its capacity as Property Trustee, the
"Bank"), (iii) Wilmington Trust Company, a Delaware trust company, as Delaware
trustee (the "Delaware Trustee"), (iv) --------------- and -------------, each
an individual whose address is c/o Covanta Energy Corporation, 40 Lane Road,
Fairfield, New Jersey 07004 (each an "Administrative Trustee" and collectively
the "Administrative Trustees") (the Property Trustee, the Delaware Trustee and
the Administrative Trustees referred to collectively as the "Trustees") and (v)
the several Holders, as hereinafter defined.
WITNESSETH
WHEREAS, the Sponsor and the Delaware Trustee have heretofore duly declared
and established a business trust pursuant to the Delaware Business Trust Act by
entering into that certain Trust Agreement, dated as of July 16, 2001 (the
"Original Trust Agreement"), and by the execution and filing with the Secretary
of State of the State of Delaware of the Certificate of Trust, filed on July 16,
2001, attached as Exhibit A; and
WHEREAS, the Sponsor and the Trustees desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (i) the issuance of the Common Securities by the Trust to
the Sponsor, (ii) the issuance and sale of the Preferred Securities by the Trust
pursuant to the Underwriting Agreement and (iii) the acquisition by the Trust
from the Sponsor of all of the right, title and interest in the Debt Securities;
NOW THEREFORE, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the sufficiency of which
is hereby acknowledged, each party, for the benefit of the other parties and for
the benefit of the Securityholders, hereby amends and restates the Original
Trust Agreement in its entirety and agrees as follows:
Article I.
DEFINED TERMS
Section 1.1. Definitions.
For all purposes of this Trust Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
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(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may
be, of this Trust Agreement; and
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.8.
"Administrative Trustee" means each of --------------- and --------------,
solely in such Person's capacity as Administrative Trustee of the Trust created
and continued hereunder and not in such Person's individual capacity, or such
Administrative Trustee's successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Bank" has the meaning specified in the preamble to this Trust Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in
the premises judging such Person a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjudication
or composition of or in respect of such Person under any applicable Federal
or State bankruptcy, insolvency, reorganization or other similar law, or
appointing a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of such Person or of any substantial part of its
property or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period
of 60 consecutive days; or
(b) the institution by such Person of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of
bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under any
applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law, or the consent by it to the filing of any such petition or to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator
(or similar official) of such Person or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due and its willingness to be adjudicated a
bankrupt, or the taking of corporate action by such Person in furtherance
of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.9.
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"Book-Entry Preferred Securities Certificates" means a beneficial interest
in the Preferred Securities Certificates represented by a global security,
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 5.11.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a day
on which banking institutions in The City of New York are authorized or required
by law to remain closed, or (c) a day on which the Property Trustee's Corporate
Trust Office or the corporate trust office of the Indenture Trustee is closed
for business.
"Certificate Depository Agreement" means the agreement among the Trust, the
Sponsor and The Depository Trust Company, as the initial Clearing Agency, dated
as of the Closing Date, relating to the Trust Securities Certificates,
substantially in the form attached as Exhibit B, as the same may be amended and
supplemented from time to time.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. [ ]
will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
"Closing Date" has the meaning specified in the Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
or, if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Security" means an undivided beneficial ownership interest in the
assets of the Trust, having a Liquidation Amount of $[ ] and having the rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Common Securities Certificate" means a certificate evidencing ownership of
Common Securities, substantially in the form attached as Exhibit C.
"Corporate Trust Office" means the principal office of the Property
Trustee.
"Debt Security Redemption Date" means, with respect to any Debt Securities
to be redeemed under the Indenture, the date fixed for redemption under the
Indenture.
"Debt Securities" means the aggregate principal amount of the
Sponsor's ---% Subordinated Debt Securities, Series ---, issued pursuant to the
Indenture.
3
"Definitive Preferred Securities Certificates" means either or both (as the
context requires) of (a) Preferred Securities Certificates issued as Book-Entry
Preferred Securities Certificate as provided in Section 5.11(a) and (b)
Preferred Securities Certificates issued in certificated, fully registered form
as provided in Section 5.13.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C. Section 3801, et seq., as it may be amended from time to time.
"Delaware Trustee" means the corporation identified as the "Delaware
Trustee" in the preamble to this Trust Agreement solely in its capacity as
Delaware Trustee of the Trust created and continued hereunder and not in its
individual capacity, or its successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"Distribution Date" has the meaning specified in Section 4.1(a).
"Distributions" means amounts payable in respect of the Trust Securities as
provided in Section 4.1.
"Event of Default" means (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body) the occurrence of an
Event of Default with respect to a Debt Security.
"Expiration Date" has the meaning specified in Section 9.1.
"Guarantee" means the Guarantee Agreement executed and delivered by the
Sponsor and Bankers Trust Company, as guarantee trustee, contemporaneously with
the execution and delivery of this Trust Agreement, for the benefit of the
Holders of the Trust Securities, as amended from time to time.
"Global Security" means, with respect to all or any part of any series of
Securities, a Security executed by the Issuer and authenticated and delivered by
the Trustee to the Depository or pursuant to the Depository's instruction, all
in accordance with this Indenture and pursuant to an Issuer Order, which shall
be registered in the name of the Depository or its nominee and the ownership of
which will be registered in a "book-entry" or other system maintained by a
Clearing Agency.
"Indenture" means the Subordinated Debt Securities Indenture, dated as of
September --, 1998, between the Sponsor and the Indenture Trustee, as amended or
supplemented from time to time.
"Indenture Trustee" means Bankers Trust Company, a New York banking
corporation, and any successor thereto.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
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"Like Amount" means (a) with respect to a redemption of any
series of Trust Securities, Trust Securities of such series having a Liquidation
Amount equal to that portion of the principal amount of Debt Securities to be
contemporaneously redeemed in accordance with the Indenture, allocated to the
Common Securities and to the Preferred Securities based upon the relative
Liquidation Amounts of such classes and the proceeds of which will be used to
pay the Redemption Price of such Trust Securities, and (b) with respect to a
distribution of Debt Securities to Holders of any series of Trust Securities in
connection with a dissolution or liquidation of the Trust, Debt Securities
having a principal amount equal to the Liquidation Amount of the Trust
Securities of the Holder to whom such Debt Securities are distributed.
"Liquidation Amount" means the stated amount of $[ ] per Trust Security.
"Liquidation Date" means the date on which Debt Securities are to be
distributed to Holders of Trust Securities in connection with a dissolution and
liquidation of the Trust pursuant to Section 9.4(a).
"Liquidation Distribution" has the meaning specified in Section 9.4(d).
"Ministerial Action" means the taking of an action, such as filing a form
or making an election, or pursuing some other similar reasonable measure that
will have no adverse effect on the Trust, the Sponsor or the Holders of the
Trust Securities and will involve no material cost.
"1940 Act" means the Investment Company Act of 1940, as amended.
"Officers' Certificate" means a certificate signed by the Chairman or a
Vice Chairman of the Board, the President or a Vice President, and by the
Treasurer, an Assistant Treasurer, the Comptroller, an Assistant Comptroller,
the Secretary or an Assistant Secretary, of the Sponsor, and delivered to the
appropriate Trustee. One of the officers signing an Officers' Certificate given
pursuant to Section 8.16 shall be the principal executive, financial or
accounting officer of the Sponsor. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this Trust
Agreement shall include:
(a) a statement that each officer signing the Officers' 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 Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
5
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Trust, the Property Trustee or the Sponsor, and who shall be reasonably
acceptable to the Property Trustee.
"Original Trust Agreement" has the meaning specified in the recitals to
this Trust Agreement.
"Outstanding", when used with respect to Preferred Securities, means, as of
the date of determination, all Preferred Securities theretofore executed and
delivered under this Trust Agreement, except:
(a) Preferred Securities theretofore cancelled by the Property Trustee
or delivered to the Property Trustee for cancellation;
(b) Preferred Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Property Trustee
or any Paying Agent for the Holders of such Preferred Securities; provided
that, if such Preferred Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Trust Agreement; and
(c) Preferred Securities which have been paid or in exchange for or in
lieu of which other Preferred Securities have been executed and delivered
pursuant to Sections 5.4, 5.5, 5.11 and 5.13;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Preferred Securities owned by the Sponsor, any Trustee or any Affiliate of the
Sponsor or any Trustee shall be disregarded and deemed not to be Outstanding,
except that (a) in determining whether any Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Preferred Securities that such Trustee knows to be so owned shall
be so disregarded and (b) the foregoing shall not apply at any time when all of
the outstanding Preferred Securities are owned by the Sponsor, one or more of
the Trustees and/or any such Affiliate. Preferred Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Administrative Trustees the pledgee's
right so to act with respect to such Preferred Securities and that the pledgee
is not the Sponsor or any Affiliate of the Sponsor.
"Owner" means each Person who is the beneficial owner of a Book-Entry
Preferred Securities Certificate as reflected in the records of the Clearing
Agency or, if a Clearing Agency Participant is not the Owner, then as reflected
in the records of a Person maintaining an account with such Clearing Agency
(directly or indirectly, in accordance with the rules of such Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent appointed pursuant
to Section 5.9 and shall initially be the Bank.
6
"Payment Account" means a segregated non-interest bearing corporate trust
account maintained by the Property Trustee with the Bank in its trust department
for the benefit of the Securityholders in which all amounts paid in respect of
the Debt Securities will be held and from which the Property Trustee shall make
payments to the Securityholders in accordance with Sections 4.1 and 4.2.
"Person" means any individual, corporation, partnership, joint venture,
trust, limited liability company or corporation, unincorporated organization or
government or any agency or political subdivision thereof.
"Preferred Security" means an undivided beneficial ownership interest in
the assets of the Trust, having a Liquidation Amount of $[ ] and having the
rights provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Preferred Securities Certificate" means a certificate evidencing ownership
of Preferred Securities, substantially in the form attached as Exhibit D.
"Property Trustee" means the commercial bank or trust company identified as
the "Property Trustee" in the preamble to this Trust Agreement solely in its
capacity as Property Trustee of the Trust heretofore created and continued
hereunder and not in its individual capacity, or its successor in interest in
such capacity, or any successor property trustee appointed as herein provided.
"Redemption Date" means, with respect to any Trust Security to be redeemed,
the date fixed for such redemption by or pursuant to this Trust Agreement;
provided that each Debt Security Redemption Date and the stated maturity of the
Debt Securities shall be a Redemption Date for a Like Amount of Trust
Securities.
"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated but unpaid
Distributions to the Redemption Date, plus the related amount of the premium, if
any, paid by the Sponsor upon the concurrent redemption of a Like Amount of Debt
Securities, allocated on a pro rata basis (based on Liquidation Amounts) among
the Trust Securities.
"Relevant Trustee" shall have the meaning specified in Section 8.10.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.4.
"Securityholder" or "Holder" means a Person in whose name a Trust Security
or Trust Securities is registered in the Securities Register; any such Person
being a beneficial owner within the meaning of the Delaware Business Trust Act.
"Sponsor" has the meaning specified in the preamble to this Trust
Agreement.
"Trust" means the Delaware business trust created and continued hereby and
identified on the cover page to this Trust Agreement.
7
"Trust Agreement" means this Amended and Restated Trust Agreement, as the
same may be modified, amended or supplemented in accordance with the applicable
provisions hereof, including all exhibits hereto, including, for all purposes of
this Trust Agreement and any such modification, amendment or supplement, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this Trust Agreement and any such modification, amendment or supplement,
respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trust Property" means (a) the Debt Securities, (b) any cash on deposit in,
or owing to, the Payment Account and (c) all proceeds and rights in respect of
the foregoing and any other property and assets for the time being held or
deemed to be held by the Property Trustee pursuant to the terms of this Trust
Agreement.
"Trust Security" means any one of the Common Securities or the Preferred
Securities.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.
"Trustees" means, collectively, the Property Trustee, the Delaware Trustee
and the Administrative Trustees.
"Underwriting Agreement" means the Underwriting Agreement, dated as of
- ----------, 200--, among the Trust, the Sponsor and the underwriters named
therein.
Article II.
ESTABLISHMENT OF THE TRUST
Section 2.1. Name.
The Trust continued hereby shall be known as "Covanta Capital Trust [ ],"
as such name may be modified from time to time by the Administrative Trustees
following written notice to the Holders of Trust Securities and the other
Trustees, in which name the Trustees may conduct the business of the Trust, make
and execute contracts and other instruments on behalf of the Trust and sue and
be sued.
Section 2.2. Office of the Delaware Trustee; Principal Place of Business.
The address of the Delaware Trustee in the State of Delaware is Rodney
Square North, 100 North Market Street, Wilmington, Delaware 19890, Attention:
Corporate Trust Administration - Covanta Capital Trust [ ], or such other
address in the State of Delaware as the Delaware Trustee may designate by
written notice to the Securityholders and the Sponsor. The principal executive
office of the Trust is c/o Covanta Energy Corporation, 40 Lane Road, Fairfield,
New Jersey 07004.
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Section 2.3. Initial Contribution of Trust Property; Organizational
Expenses.
The Delaware Trustee acknowledges receipt in trust from the Sponsor in
connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Sponsor shall pay organizational
expenses of the Trust as they arise or shall, upon request of any Trustee,
promptly reimburse such Trustee for any such expenses paid by such Trustee. The
Sponsor shall make no claim upon the Trust Property for the payment of such
expenses.
Section 2.4. Issuance of the Preferred Securities.
On -----------------, 200--, the Sponsor, on behalf of the Trust and
pursuant to the Original Trust Agreement, executed and delivered the
Underwriting Agreement. Contemporaneously with the execution and delivery of
this Trust Agreement, an Administrative Trustee, on behalf of the Trust, shall
execute in accordance with Section 5.2 and deliver to the Underwriters named in
the Underwriting Agreement Preferred Securities Certificates, registered in the
name of the nominee of the initial Clearing Agency, [ ] Preferred Securities
having an aggregate Liquidation Amount of $--------, against receipt of such
aggregate purchase price of such Preferred Securities of $--------, which amount
the Administrative Trustee shall promptly deliver to the Property Trustee. If
there is a Closing Date as a result of the exercise of an over-allotment option
pursuant to the Underwriting Agreement, an Administrative Trustee, on behalf of
the Trust, shall execute in accordance with Section 5.2 and deliver to the
Underwriters named in the Underwriting Agreement Preferred Securities
Certificates, registered in the name of the nominee of the initial Clearing
Agency, up to [ ] Preferred Securities having an aggregate Liquidation Amount of
up to $-------, against receipt of such aggregate purchase price of such
Preferred Securities of $-------, which amount such Administrative Trustees
shall promptly deliver to the Property Trustee in accordance with instructions
provided by such Underwriters, on the date specified pursuant to the
Underwriting Agreement. Upon issuance of Preferred Securities in accordance with
this Section 2.4, such Preferred Securities will be validly issued and will
represent valid, fully paid and nonassessable undivided beneficial interests in
the assets of the Trust.
Section 2.5. Issuance of the Common Securities; Subscription and Purchase
of Debt Securities.
Contemporaneously with the execution and delivery of this Trust Agreement,
an Administrative Trustee, on behalf of the Trust, shall execute in accordance
with Section 5.2 and deliver to the Sponsor Common Securities Certificates,
registered in the name of the Sponsor, [ ] Common Securities having an aggregate
Liquidation Amount of $------- against payment by the Sponsor of such amount.
Contemporaneously therewith, an Administrative Trustee, on behalf of the Trust,
shall subscribe to and purchase from the Sponsor Debt Securities, registered in
the name of the Trust and having an aggregate principal amount equal to
$-------, and, in satisfaction of the purchase price for such Debt Securities,
the Property Trustee, on behalf of the Trust, shall deliver to the Sponsor the
sum of $-------. If there is a Closing Date as a result of the exercise of an
over-allotment option pursuant to the Underwriting Agreement, an Administrative
Trustee, on behalf of the Trust, shall execute in accordance with Section 5.2
and deliver to the Sponsor Common Securities Certificates,
9
registered in the name of the Sponsor, up to [ ] Common Securities having
an aggregate Liquidation Amount of up to $------- against payment by the Sponsor
of such amount. Contemporaneously therewith, an Administrative Trustee, on
behalf of the Trust, shall subscribe to and purchase from the Sponsor Debt
Securities, registered in the name of the Trust and having an aggregate
principal amount of up to $-------, and, in satisfaction of the purchase price
for such Debt Securities, the Property Trustee, on behalf of the Trust, shall
deliver to the Sponsor the amount received from one of the Administrative
Trustees pursuant to the last sentence of Section 2.4. Upon issuance of Common
Securities in accordance with this Section 2.5, such Common Securities will be
validly issued and will represent valid undivided beneficial interests in the
assets of the Trust.
Section 2.6. Declaration of Trust.
The exclusive purposes and functions of the Trust are (a) to issue and sell
Trust Securities and use the proceeds from such sale to acquire the Debt
Securities, and (b) to engage in those activities necessary, convenient or
incidental thereto. The Sponsor hereby appoints the Trustees as trustees of the
Trust, to have all the rights, powers and duties to the extent set forth herein,
and the Trustees hereby accept such appointment. The Property Trustee hereby
declares that it will hold the Trust Property in trust upon and subject to the
conditions set forth herein for the benefit of the Trust and the
Securityholders. The Administrative Trustees shall have all rights, powers and
duties set forth herein and in accordance with applicable law with respect to
accomplishing the purposes of the Trust. 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 Property Trustee or the Administrative
Trustees set forth herein, except as required by the Delaware Business Trust
Act. The Delaware Trustee shall be one of the Trustees of the Trust for the sole
and limited purpose of fulfilling the requirements of Section 3807(a) of the
Delaware Business Trust Act.
Section 2.7. Authorization to Enter into Certain Transactions.
(a) The Trustees shall conduct the affairs of the Trust in accordance with
the terms of this Trust Agreement. Subject to the limitations set forth in
paragraph (b) of this Section and Article VIII, and in accordance with the
following provisions (i) and (ii), the Administrative Trustees shall have the
authority to enter into all transactions and agreements determined by the
Trustees to be appropriate in exercising the authority granted to the Trustees
under this Trust Agreement, and to perform all acts in furtherance thereof,
including without limitation, the following:
(i) As among the Trustees, each Administrative Trustee shall have the
power and authority to act on behalf of the Trust with respect to the
following matters:
(A) the issuance and sale of the Trust Securities;
(B) to cause the Trust to enter into, and to execute, deliver and
perform on behalf of the Trust, the Certificate Depository Agreement
and such other agreements as may be necessary or desirable in
connection with the purposes and function of the Trust;
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(C) assisting in the registration of the Preferred Securities
under the Securities Act of 1933, as amended, and under state
securities or blue sky laws, and the qualification of this Trust
Agreement as a trust indenture under the Trust Indenture Act;
(D) assisting in the listing of the Preferred Securities upon
such securities exchange or exchanges as shall be determined by the
Sponsor and the registration of the Preferred Securities under the
Securities Exchange Act of 1934, as amended, and the preparation and
filing of all periodic and other reports and other documents pursuant
to the foregoing;
(E) the sending of notices (other than notices of default) and
other information regarding the Trust Securities and the Debt
Securities to the Securityholders in accordance with this Trust
Agreement;
(F) the appointment of a Paying Agent, authenticating agent and
Securities Registrar in accordance with this Trust Agreement;
(G) registering transfer of the Trust Securities in accordance
with this Trust Agreement;
(H) to the extent provided in this Trust Agreement, the winding
up of the affairs of and liquidation of the Trust and the preparation,
execution and filing of the certificate of cancellation with the
Secretary of State of the State of Delaware;
(I) unless otherwise required by the Trust Indenture Act, to
execute on behalf of the Trust (either acting alone or together with
any or all of the Administrative Trustees) any documents that the
Administrative Trustees have the power to execute pursuant to this
Trust Agreement; and
(J) the taking of any action incidental to the foregoing as the
Trustees may from time to time determine is necessary or advisable to
give effect to the terms of this Trust Agreement for the benefit of
the Securityholders (without consideration of the effect of any such
action on any particular Securityholder).
(ii) As among the Trustees, the Property Trustee shall have the power,
duty and authority to act on behalf of the Trust with respect to the
following matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Debt Securities;
(C) the collection of interest, principal and any other payments
made in respect of the Debt Securities in the Payment Account;
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(D) the distribution of amounts owed to the Securityholders in
respect of the Trust Securities;
(E) the exercise of all of the rights, powers and privileges of a
holder of the Debt Securities;
(F) the sending of notices of default and other information
regarding the Trust Securities and the Debt Securities to the
Securityholders in accordance with this Trust Agreement;
(G) the distribution of the Trust Property in accordance with the
terms of this Trust Agreement;
(H) to the extent provided in this Trust Agreement, the winding
up of the affairs of and liquidation of the Trust and the preparation,
execution and filing of the certificate of cancellation with the
Secretary of State of the State of Delaware;
(I) after an Event of Default the taking of any action incidental
to the foregoing as the Property Trustee may from time to time
determine is necessary or advisable to give effect to the terms of
this Trust Agreement and protect and conserve the Trust Property for
the benefit of the Securityholders (without consideration of the
effect of any such action on any particular Securityholder);
(J) registering transfers of the Trust Securities in accordance
with this Trust Agreement;
(K) to engage in such Ministerial Activities as shall be
necessary, appropriate, convenient or incidental to effect the
repayment of the Preferred Securities and the Common Securities to the
extent the Debt Securities mature or are redeemed; and
(L) except as otherwise provided in this Section 2.7(a)(ii), the
Property Trustee shall have none of the duties, liabilities, powers or
the authority of the Administrative Trustees set forth in Section
2.7(a)(i).
(b) So long as this Trust Agreement remains in effect, the Trust (or the
Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trustees shall not cause the Trust to (i) acquire any
investments or engage in any activities not authorized by this Trust Agreement,
(ii) sell, assign, transfer, exchange, mortgage, pledge, set-off or otherwise
dispose of any of the Trust Property or interests therein, including to
Securityholders, except as expressly provided herein, (iii) take any action that
would cause the Trust to fail or cease to qualify as a "grantor trust" for
United States Federal income tax purposes, (iv) incur any indebtedness for
borrowed money or issue any other debt, (v) take or consent to any action that
would result in the placement of a Lien on any of the Trust Property, (vi)
invest any proceeds received by the Trust from holding the Debentures, but the
12
Property Trustee shall distribute all such proceeds to Holders of Trust
Securities pursuant to the terms of this Trust Agreement and of the Securities,
(vii) acquire any assets other than the Trust Property, (viii) possess any power
or otherwise act in such a way as to vary the Trust Property, (ix) possess any
power or otherwise act in such a way as to vary the terms of the Securities in
any way whatsoever (except to the extent expressly authorized in this Trust
Agreement or by the terms of the Trust Securities) or (x) issue any securities
or other evidences of beneficial ownership of, or beneficial interest in, the
Trust other than the Trust Securities. The Administrative Trustees shall defend
all claims and demands of all Persons at any time claiming any Lien on any of
the Trust Property adverse to the interest of the Trust or the Securityholders
in their capacity as Securityholders.
(c) In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the right and responsibility to assist the Trust with respect
to, or effect on behalf of the Trust, the following (and any actions taken by
the Sponsor in furtherance of the following prior to the date of this Trust
Agreement are hereby ratified and confirmed in all respects):
(i) the preparation and filing by the Trust with the Commission and
the execution on behalf of the Trust of a registration statement on the
appropriate form in relation to the Preferred Securities, including any
amendments thereto;
(ii) the determination of the States in which to take appropriate
action to qualify or register for sale all or part of the Preferred
Securities and the determination of any and all such acts, other than
actions which must be taken by or on behalf of the Trust, and the advice to
the Trustees of actions they must take on behalf of the Trust, and the
preparation for execution and filing of any documents to be executed and
filed by the Trust or on behalf of the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of any
such States;
(iii) the preparation for filing by the Trust and execution on behalf
of the Trust of an application to the New York Stock Exchange or any other
national stock exchange or the Nasdaq National Market for listing upon
notice of issuance of any Preferred Securities;
(iv) the preparation for filing by the Trust with the Commission and
the execution on behalf of the Trust of a registration statement on Form
8-A relating to the registration of the Preferred Securities under Section
12(b) or 12(g) of the Exchange Act, including any amendments thereto;
(v) the negotiation of the terms of, and the execution and delivery
of, the Underwriting Agreement providing for the sale of the Preferred
Securities; and
(vi) the taking of any other actions deemed by the Sponsor necessary
or desirable to carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the Administrative
Trustees are authorized and directed to conduct the affairs of the Trust and to
operate the Trust so that the Trust will not be deemed to be an "investment
company" required to be registered under the Investment Company Act of 1940, as
13
amended, or taxed as a corporation for United States Federal income tax purposes
and so that the Debt Securities will be treated as indebtedness of the Sponsor
for United States Federal income tax purposes. In this connection, the Sponsor
and the Administrative Trustees are authorized to take any action, not
inconsistent with applicable law, the Certificate of Trust or this Trust
Agreement, that each of the Sponsor and the Administrative Trustees determines
in their discretion to be necessary or desirable for such purposes, as long as
such action does not adversely affect in any material respect the interests of
the holders of the Preferred Securities.
Section 2.8. Assets of Trust.
The assets of the Trust shall consist of the Trust Property.
Section 2.9. Title to Trust Property.
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered by
the Property Trustee for the benefit of the Trust and the Securityholders in
accordance with this Trust Agreement.
Article III.
PAYMENT ACCOUNT
Section 3.1. Payment Account.
(a) On or prior to the Closing Date, the Property Trustee shall establish
the Payment Account. The Property Trustee and any agent of the Property Trustee
shall have exclusive control and sole right of withdrawal with respect to the
Payment Account for the purpose of making deposits in and withdrawals from the
Payment Account in accordance with this Trust Agreement. All monies and other
property deposited or held from time to time in the Payment Account shall be
held by the Property Trustee in the Payment Account for the exclusive benefit of
the Securityholders and for distribution as herein provided, including (and
subject to) any priority of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account, promptly
upon receipt, all payments of principal of or interest on, and any other
payments or proceeds with respect to, the Debt Securities. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
Article IV.
CERTAIN TERMS OF THE TRUST SECURITIES
Section 4.1. Distributions.
(a) Distributions on the Trust Securities shall be cumulative, and will
accumulate whether or not there are funds of the Trust available for the payment
of Distributions. Distributions shall accrue from -----------------, and shall
be payable quarterly in arrears on [ ], [ ], [ ] and [ ] of each year,
commencing on ---------, 200-- except as provided below. The Sponsor has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debt Securities for a period
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not extending, in the aggregate, beyond the maturity date of the Debt Securities
(each, an "Extension Period"). During such Extension Period, no interest shall
be due and payable on the Debt Securities. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accumulate, compounded quarterly during any such
Extension Period (to the extent permitted by applicable law). Payments of
accrued Distributions will be payable to Holders as they appear on the books and
records of the Trust on the first record date after the end of the Extension
Period. Upon the termination of any Extension Period and the payment of all
amounts then due, the Sponsor may commence a new Extension Period; provided that
such Extension Period together with all such previous and further extensions
thereof may not exceed beyond the maturity date of the Debt Securities. If any
date on which a Distribution is otherwise payable on the Trust Securities is not
a Business Day, then the payment of such Distribution shall 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 next succeeding Business Day
is in the next succeeding calendar year, payment of such Distribution shall be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on such date (each date on which distributions are payable
in accordance with this Section 4.1(a), a "Distribution Date").
(b) The Trust Securities represent undivided beneficial ownership interests
in the Trust Property, and, as a practical matter, the Distributions on the
Trust Securities shall be payable at a rate of ----% per annum (the "Coupon
Rate") of the Liquidation Amount of the Trust Securities. Distributions in
arrears for more than one quarter will accumulate and compound at the Coupon
Rate. The term "Distributions" as used in this Trust Agreement includes such
cash distributions and any such accumulated amounts that are payable unless
otherwise stated. A Distribution is payable only to the extent that payments are
made in respect of the Debt Securities held by the Property Trustee and to the
extent the Property Trustee has funds available therefor. The amount of
Distributions payable for any full period shall be computed on the basis of a
360-day year of twelve 30-day months. The amount of Distributions payable for
any period less than a full Distribution period will be computed on the basis of
a 360-day year of twelve 30-day months and the actual days elapsed in a partial
month in such period.
(c) Distributions on the Trust Securities shall be made by the Property
Trustee from the Payment Account and shall be payable on each Distribution Date
only to the extent that the Trust has funds then on hand and available in the
Payment Account for the payment of such Distributions.
(d) Distributions on the Trust Securities with respect to a Distribution
Date shall be payable to the Holders thereof as they appear on the Securities
Register for the Trust Securities on the relevant record date, which shall be
one Business Day prior to such Distribution Date; provided, however, that in the
event that the Preferred Securities do not remain in book-entry-only form, the
relevant record date shall be the date 15 days prior to the relevant
Distribution Date.
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Section 4.2. Redemption.
(a) On each Debt Security Redemption Date and on the stated maturity of the
Debt Securities, the Trust will be required to redeem a Like Amount of Trust
Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Security Register. All notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if fewer than all the Outstanding Trust Securities are to be
redeemed, the identification and the total Liquidation Amount of the
particular Trust Securities to be redeemed;
(v) that on the Redemption Date the Redemption Price will become due
and payable upon each such Trust Security to be redeemed and that
Distributions thereon will cease to accrue on and after said date; and
(vi) if the Preferred Securities are no longer in book-entry-only
form, the place and address where the Holders shall surrender their
Preferred Securities Certificates.
(c) The Trust Securities redeemed on each Redemption Date shall be redeemed
at the Redemption Price with the proceeds from the contemporaneous redemption of
Debt Securities. Redemptions of the Trust Securities shall be made and the
Redemption Price shall be payable on each Redemption Date only to the extent
that the Trust has funds then on hand and available in the Payment Account for
the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of any
Trust Securities, then, by 12:00 noon, New York City time, on the Redemption
Date, subject to Section 4.2(c), the Property Trustee will, so long as the Trust
Securities are in book-entry-only form, irrevocably deposit with the Clearing
Agency for the Trust Securities funds sufficient to pay the applicable
Redemption Price and will give such Clearing Agency irrevocable instructions and
authority to pay the Redemption Price to the holders thereof. If the Trust
Securities are no longer in book-entry-only form, the Property Trustee, subject
to Section 4.2(c), will irrevocably deposit with the Paying Agent funds
sufficient to pay the applicable Redemption Price and will give the Paying Agent
irrevocable instructions and authority to pay the Redemption Price to the
Holders thereof upon surrender of their Trust Securities Certificates.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Trust Securities called for redemption shall be payable
to the Holders of such Trust Securities as they appear on the Register for the
Trust Securities on the relevant record dates for the related Distribution
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Dates. If notice of redemption shall have been given and funds deposited as
required, then immediately prior to the close of business (New York City time)
on the date of such deposit, all rights of Securityholders holding Trust
Securities so called for redemption will cease, except the right of such
Securityholders to receive the Redemption Price and any unpaid Distribution
payable on or prior to the Redemption Date, but in each case without interest,
and such Securities will cease to be outstanding. In the event that any date on
which any Redemption Price is payable 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 succeeding 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. In
the event that payment of the Redemption Price in respect of any Trust
Securities called for redemption is improperly withheld or refused and not paid
either by the Trust or by the Sponsor pursuant to the Guarantee, Distributions
on such Trust Securities will continue to accrue, at the then applicable rate,
from the Redemption Date originally established by the Trust for such Trust
Securities to the date such Redemption Price is actually deposited, in which
case such date will be the date fixed for redemption for purposes of calculating
the Redemption Price provided, that if the Redemption Price is not deposited by
12:00 noon on such date, the next succeeding Business Day shall be the date
fixed for redemption for purposes of calculating the Redemption Price.
(e) Payment of the Redemption Price on the Trust Securities shall be made
to the recordholders thereof as they appear on the Securities Register for the
Trust Securities on the relevant record date, which shall be one Business Day
prior to the relevant Redemption Date; provided, however, that in the event that
the Preferred Securities do not remain in book-entry-only form, the relevant
record date shall be the date 15 days prior to the relevant Redemption Date.
(f) Subject to Section 4.3(a), if fewer than all the Outstanding Trust
Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated on a
pro rata basis (based on Liquidation Amounts) among the Common Securities and
the Preferred Securities. The particular Preferred Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Property Trustee from the Outstanding Preferred Securities not previously called
for redemption by such method as the Property Trustee shall deem fair and
appropriate. The Property Trustee shall promptly notify the Security Registrar
in writing of the Preferred Securities selected for redemption and, in the case
of any Preferred Securities selected for partial redemption, the Liquidation
Amount thereof to be redeemed. For all purposes of this Trust Agreement, unless
the context otherwise requires, all provisions relating to the redemption of
Preferred Securities shall relate, in the case of any Preferred Securities
redeemed or to be redeemed only in part, to the portion of the Liquidation
Amount of Preferred Securities that has been or is to be redeemed.
Section 4.3. Subordination of Common Securities.
(a) Payment of Distributions on, and the Redemption Price of, the Trust
Securities, as applicable, shall be made, subject to Section 4.2(f), pro rata
among the Common Securities and the Preferred Securities based on the
Liquidation Amount of the Trust Securities; provided, however, that if on any
Distribution Date or Redemption Date any Event of Default resulting from an
17
Event of Default with respect to any Debt Security shall have occurred and be
continuing, no payment of any Distribution on, or Redemption Price of, any
Common Security, and no other payment on account of the redemption, liquidation
or other acquisition of Common Securities, shall be made unless payment in full
in cash of all accumulated and unpaid Distributions on all Outstanding Preferred
Securities for all Distribution periods terminating on or prior thereto, or in
the case of payment of the Redemption Price the full amount of such Redemption
Price on all Outstanding Preferred Securities, shall have been made or provided
for, and all funds immediately available to the Property Trustee shall first be
applied to the payment in full in cash of all Distributions on, or the
Redemption Price of, Preferred Securities then due and payable.
(b) In the case of the occurrence of any Event of Default resulting from
any Event of Default with respect to any Debt Security, the Holder of Common
Securities will be deemed to have waived any right to act with respect to any
such Event of Default under this Trust Agreement until the effect of all such
Events of Default with respect to the Preferred Securities have been cured,
waived or otherwise eliminated. Until any such Event of Default under this Trust
Agreement with respect to the Preferred Securities has been so cured, waived or
otherwise eliminated, the Property Trustee shall act solely on behalf of the
Holders of the Preferred Securities and not the Holder of the Common Securities,
and only the Holders of the Preferred Securities will have the right to direct
the Property Trustee to act on their behalf.
Section 4.4. Payment Procedures.
Payments of Distributions in respect of the Preferred Securities shall be
made by check mailed to the address of the Person entitled thereto as such
address shall appear on the Securities Register or, if the Preferred Securities
are held by a Clearing Agency, such Distributions shall be made to the Clearing
Agency in immediately available funds, which shall credit the relevant Persons'
accounts at such Clearing Agency on the applicable distribution dates. Payments
in respect of the Common Securities shall be made in such manner as shall be
mutually agreed between the Property Trustee and the Common Securityholder.
Section 4.5. Tax Returns and Reports.
The Administrative Trustees shall prepare (or cause to be prepared), at the
Sponsor's expense, and file all United States Federal, state and local tax and
information returns and reports required to be filed by or in respect of the
Trust. In this regard, the Administrative Trustees shall (a) prepare and file
(or cause to be prepared and filed) the appropriate Internal Revenue Service
form required to be filed in respect of the Trust in each taxable year of the
Trust and (b) prepare and furnish (or cause to be prepared and furnished) to
each Securityholder the appropriate Internal Revenue Service form required to be
provided or the information required to be provided on such form. The
Administrative Trustees shall provide the Sponsor and the Property Trustee with
a copy of all such returns and reports promptly after such filing or furnishing.
The Trustees shall comply with United States Federal withholding and backup
withholding tax laws and information reporting requirements with respect to any
payments to Securityholders under the Trust Securities.
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Section 4.6. Payments under Indenture.
Any amount payable hereunder to any Holder of Preferred Securities (and any
Owner with respect thereto) shall be reduced by the amount of any corresponding
payment such Holder (and Owner) has directly received pursuant to Section 6.7 of
the Indenture.
Article V.
TRUST SECURITIES CERTIFICATES
Section 5.1. Initial Ownership.
Upon the creation of the Trust and the contribution by the Sponsor pursuant
to Section 2.3 and until the issuance of the Trust Securities, and at any time
during which no Trust Securities are outstanding, the Sponsor shall be the sole
beneficial owner of the Trust.
Section 5.2. The Trust Securities Certificates.
The Preferred Securities Certificates shall be issued in minimum
denominations of $[ ] Liquidation Amount and integral multiples of $[ ] in
excess thereof, and the Common Securities Certificates shall be issued in
denominations of $[ ] Liquidation Amount and integral multiples of $[ ] in
excess thereof. The Trust Securities Certificates shall be executed on behalf of
the Trust by manual signature of at least one Administrative Trustee. Trust
Securities Certificates bearing the manual signatures of individuals who were,
at the time when such signatures shall have been affixed, authorized to sign on
behalf of the Trust, shall be validly issued and entitled to the benefits of
this Trust Agreement, notwithstanding that such individuals or any of them shall
have ceased to be so authorized prior to the delivery of such Trust Securities
Certificates or did not hold such offices at the date of delivery of such Trust
Securities Certificates. A transferee of a Trust Securities Certificate shall
become a Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Sections 5.4, 5.11
and 5.13.
Section 5.3. Execution and Delivery of Trust Securities Certificates.
At each Time of Delivery, the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 2.4 and 2.5, to be executed on behalf of the Trust and delivered to or
upon the written order of the Sponsor, signed by its Chairman or a Vice Chairman
of the Board, President or a Vice President, and by its Treasurer, Assistant
Treasurer, Comptroller, an Assistant Comptroller, Secretary or an Assistant
Secretary without further corporate action by the Sponsor, in authorized
denominations.
Section 5.4. Registration of Transfer and Exchange of Preferred Securities
Certificates.
The Sponsor shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 5.8, a register or registers for the purpose of
registering Trust Securities Certificates and transfers and exchanges of
Preferred Securities Certificates (the "Securities Register") in which, the
19
registrar designated by the Sponsor (the "Securities Registrar"), subject to
such reasonable regulations as it may prescribe, shall provide for the
registration of Preferred Securities Certificates and Common Securities
Certificates (subject to Section 5.10 in the case of the Common Securities
Certificates) and registration of transfers and exchanges of Preferred
Securities Certificates as herein provided. The Bank shall be the initial
Securities Registrar.
Upon surrender for registration of transfer of any Preferred Securities
Certificate at the office or agency maintained pursuant to Section 5.8, the
Administrative Trustees or any one of them shall execute and deliver, in the
name of the designated transferee or transferees, one or more new Preferred
Securities Certificates in authorized denominations of a like aggregate
Liquidation Amount dated the date of execution by such Administrative Trustee or
Trustees.
The Securities Registrar shall not be required to register the transfer of
any Preferred Securities that have been called for redemption. At the option of
a Holder, Preferred Securities Certificates may be exchanged for other Preferred
Securities Certificates in authorized denominations of the same class and of a
like aggregate Liquidation Amount upon surrender of the Preferred Securities
Certificates to be exchanged at the office or agency maintained pursuant to
Section 5.8.
Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Property Trustee and the
Securities Registrar duly executed by the Holder or his attorney duly authorized
in writing. Each Preferred Securities Certificate surrendered for registration
of transfer or exchange shall be cancelled and subsequently disposed of by the
Property Trustee in accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Preferred Securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Preferred
Securities Certificates.
Section 5.5. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates.
If (a) any mutilated Trust Securities Certificate shall be surrendered to
the Securities Registrar, or if the Securities Registrar shall receive evidence
to its satisfaction of the destruction, loss or theft of any Trust Securities
Certificate and (b) there shall be delivered to the Securities Registrar and the
Administrative Trustees such security or indemnity as may be required by them to
save each of them harmless, then in the absence of notice that such Trust
Securities Certificate shall have been acquired by a bona fide purchaser, the
Administrative Trustees, or any one of them, on behalf of the Trust shall
execute and make available for delivery, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Trust Securities Certificate, a new Trust
Securities Certificate of like class, tenor and denomination. In connection with
the issuance of any new Trust Securities Certificate under this Section, the
Administrative Trustees or the Securities Registrar may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith. Any duplicate Trust Securities Certificate issued
pursuant to this Section shall constitute conclusive evidence of an undivided
beneficial ownership interest in the assets of the Trust, as if originally
20
issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.
Section 5.6. Persons Deemed Securityholders.
The Administrative Trustees or the Securities Registrar shall treat the
Person in whose name any Trust Securities Certificate shall be registered in the
Securities Register as the owner of such Trust Securities Certificate for the
purpose of receiving distributions and for all other purposes whatsoever, and
neither the Trustees nor the Securities Registrar shall be bound by any notice
to the contrary.
Section 5.7. Access to List of Securityholders' Names and Addresses.
In the event that the Property Trustee is no longer the Securities
Registrar, the Administrative Trustees or the Sponsor shall furnish or cause to
be furnished a list, in such form as the Property Trustee may reasonably
require, of the names and addresses of the Securityholders as of the most recent
record date (a) to the Property Trustee, quarterly not later than 10 days prior
to a Distribution Date and (b) to the Property Trustee, promptly after receipt
by the Administrative Trustees or the Sponsor of a request therefor from the
Property Trustee in order to enable the Paying Agent to pay Distributions in
accordance with Section 4.1 hereof, in each case to the extent such information
is in the possession or control of the Administrative Trustees or the Sponsor
and is not identical to a previously supplied list or has not otherwise been
received by the Property Trustee. The rights of Securityholders to communicate
with other Securityholders with respect to their rights under this Declaration
or under the Trust Securities, and the corresponding rights of the Property
Trustee shall be provided in the Trust Indenture Act. Each Holder, by receiving
and holding a Trust Securities Certificate, and each Owner shall be deemed to
have agreed not to hold the Sponsor, the Property Trustee or the Administrative
Trustees accountable by reason of the disclosure of its name and address,
regardless of the source from which such information was derived.
Section 5.8. Maintenance of Office or Agency.
The Administrative Trustees shall maintain an office or offices or agency
or agencies where Preferred Securities Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Trustees in respect of the Trust Securities Certificates may be served. The
Administrative Trustees initially designate the office of the Bank as its
principal corporate trust office for such purposes. The Administrative Trustees
shall give prompt written notice to the Sponsor and to the Securityholders of
any change in the location of the Securities Register or any such office or
agency.
Section 5.9. Appointment of Paying Agent.
The Paying Agent shall make distributions to Securityholders from the
Payment Account and shall report the amounts of such distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account for the purpose
of making the distributions referred to above. The Administrative Trustees may
revoke such power and remove the Paying Agent if such Trustees determine in
their sole discretion that the Paying Agent shall have failed to perform its
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obligations under this Trust Agreement in any material respect. The Paying Agent
shall initially be the Bank, and any co-paying agent chosen by the Bank, and
acceptable to the Administrative Trustees and the Sponsor. Any Person acting as
Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written
notice to the Administrative Trustees, the Property Trustee and the Sponsor. In
the event that the Bank shall no longer be the Paying Agent or a successor
Paying Agent shall resign or its authority to act be revoked, the Administrative
Trustees shall appoint a successor that is acceptable to the Property Trustee
and the Sponsor to act as Paying Agent (which shall be a bank or trust company).
The Administrative Trustees shall cause such successor Paying Agent or any
additional Paying Agent appointed by the Administrative Trustees to execute and
deliver to the Trustees an instrument in which such successor Paying Agent or
additional Paying Agent shall agree with the Trustees that as Paying Agent, such
successor Paying Agent or additional Paying Agent will hold all sums, if any,
held by it for payment to the Securityholders in trust for the benefit of the
Securityholders entitled thereto until such sums shall be paid to such
Securityholders. The Paying Agent shall return all unclaimed funds to the
Property Trustee and upon removal of a Paying Agent such Paying Agent shall also
return all funds in its possession to the Property Trustee. The provisions of
Sections 8.1, 8.3 and 8.6 herein shall apply to the Bank also in its role as
Paying Agent, for so long as the Bank shall act as Paying Agent and, to the
extent applicable, to any other paying agent appointed hereunder. Any reference
in this Agreement to the Paying Agent shall include any co-paying agent unless
the context requires otherwise.
Section 5.10. Ownership of Common Securities by Sponsor.
At each Time of Delivery, the Sponsor shall acquire and retain beneficial
and record ownership of the Common Securities. To the fullest extent permitted
by law, other than transactions permitted by Section XI of the Indenture, any
attempted transfer of the Common Securities shall be void. The Administrative
Trustees shall cause each Common Securities Certificate issued to the Sponsor to
contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE" OTHER THAN IN
ACCORDANCE WITH THE TRUST AGREEMENT (AS DEFINED BELOW).
Section 5.11. Book-Entry Preferred Securities Certificates; Common
Securities Certificate.
(a) The Preferred Securities Certificates, upon original issuance, will be
issued in the form of a typewritten Preferred Securities Certificate or
Certificates representing Book-Entry Preferred Securities Certificates, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Trust. Such Preferred Securities Certificate or Certificates
shall initially be registered on the Securities Register in the name of Cede &
Co., the nominee of the initial Clearing Agency, and no beneficial owner will
receive a Definitive Preferred Securities Certificate representing such
beneficial owner's interest in such Preferred Securities, except as provided in
Section 5.13. Unless and until Definitive Preferred Securities Certificates have
been issued to beneficial owners pursuant to Section 5.13:
(i) the provisions of this Section 5.11(a) shall be in full force and
effect;
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(ii) the Securities Registrar and the Trustees shall be entitled to
deal with the Clearing Agency for all purposes of this Trust Agreement
relating to the Book-Entry Preferred Securities Certificates (including the
payment of the Liquidation Amount of and Distributions on the Book-Entry
Preferred Securities and the giving of instructions or directions to Owners
of Book-Entry Preferred Securities) as the sole Holder of Book-Entry
Preferred Securities and shall have no obligations to the Owners thereof;
(iii) to the extent that the provisions of this Section 5.11 conflict
with any other provisions of this Trust Agreement, the provisions of this
Section 5.11 shall control; and
(iv) the rights of the Owners of the Book-Entry Preferred Securities
Certificates shall be exercised only through the Clearing Agency and shall
be limited to those established by law and agreements between such Owners
and the Clearing Agency and/or the Clearing Agency Participants. Pursuant
to the Certificate Depository Agreement, unless and until Definitive
Preferred Securities Certificates are issued pursuant to Section 5.13, the
initial Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit payments on the Preferred
Securities to such Clearing Agency Participants.
(b) A single Common Securities Certificate representing the Common
Securities shall be issued to the Sponsor in the form of a definitive Common
Securities Certificate.
Section 5.12. Notices to Clearing Agency.
To the extent that a notice or other communication to the Owners is
required under this Trust Agreement, unless and until Definitive Preferred
Securities Certificates shall have been issued to Owners pursuant to Section
5.13, the Trustees shall give all such notices and communications specified
herein to be given to Owners to the Clearing Agency, and shall have no
obligations to the Owners.
Section 5.13. Definitive Preferred Securities Certificates.
If (a) the Sponsor advises the Trustees in writing that the Clearing Agency
is no longer willing or able to properly discharge its responsibilities with
respect to the Preferred Securities Certificates, and the Sponsor is unable to
locate a qualified successor, (b) the Sponsor at its option advises the Trustees
in writing that it elects to terminate the book-entry system through the
Clearing Agency or (c) after the occurrence of an Event of Default with respect
to any Debt Security, Owners of Preferred Securities Certificates representing
beneficial ownership interests aggregating at least a majority of the
Liquidation Amount advise the Property Trustee in writing that the continuation
of a book-entry system through the Clearing Agency is no longer in the best
interest of the Owners of Preferred Securities Certificates, then the Property
Trustee shall notify the Clearing Agency and the Clearing Agency shall notify
all Owners of Preferred Securities Certificates and the other Trustees of the
occurrence of any such event and of the availability of the Definitive Preferred
Securities Certificates to Owners of such class or classes, as applicable,
requesting the same. Upon surrender to the Property Trustee of the typewritten
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Preferred Securities Certificate or Certificates representing the Book Entry
Preferred Securities Certificates by the Clearing Agency, accompanied by
registration instructions, the Administrative Trustees, or any one of them,
shall execute the Definitive Preferred Securities Certificates in accordance
with the instructions of the Clearing Agency. Neither the Securities Registrar
nor the Trustees shall be liable for any delay in delivery of such instructions
and may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Preferred Securities Certificates,
the Trustees shall recognize the Holders of the Definitive Preferred Securities
Certificates as Securityholders. The Definitive Preferred Securities
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to the Administrative Trustees, as
evidenced by the execution thereof by the Administrative Trustees or any one of
them.
Section 5.14. Rights of Securityholders.
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 2.9, and
the Securityholders shall not have any right or title therein other than the
undivided beneficial ownership interests in the assets of the Trust conferred by
their Trust Securities and they shall have no right to call for any partition or
division of property, profits or rights of the Trust except as described below.
The Trust Securities shall be personal property giving only the rights
specifically set forth therein and in this Trust Agreement. By acceptance of a
beneficial interest in the Trust Securities, Holders agree to treat the Debt
Securities as indebtedness for all United States tax purposes. The Trust
Securities shall have no preemptive or similar rights and when issued and
delivered to Securityholders against payment of the purchase price therefor will
be fully paid and nonassessable by the Trust. The Holders of the Trust
Securities, in their capacities as such, 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.
(b) For so long as any Preferred Securities remain Outstanding, if, upon an
Event of Default with respect to any Debt Security, the Indenture Trustee fails
or the holders of not less than 25% in aggregate principal amount of the
outstanding Debt Securities fail to declare the principal of all of the Debt
Securities to be immediately due and payable, the Holders of at least 25% in
aggregate Liquidation Amount of the Preferred Securities then Outstanding shall
have such right by a notice in writing to the Sponsor and the Indenture Trustee;
and upon any such declaration such principal amount of and the accrued interest
on all of the Debt Securities shall become immediately due and payable, provided
that the payment of principal and interest on such Debt Securities shall remain
subordinated to the extent provided in the Indenture. At any time after such a
declaration of acceleration with respect to the Debt Securities has been made
and before a judgment or decree for payment of the money due has been obtained
by the Indenture Trustee as in the Indenture provided, the Holders of a majority
in Liquidation Amount of the Preferred Securities, by written notice to the
Property Trustee, the Sponsor and the Indenture Trustee, may rescind and annul
such declaration and its consequences if:
(i) the Sponsor has paid or deposited with the Indenture Trustee a sum
sufficient to pay
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(A) all overdue installments of interest on all of the Debt
Securities,
(B) the principal of (and premium, if any, on) any Debt
Securities which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Debt
Securities, and
(C) all sums paid or advanced by the Indenture Trustee under the
Indenture and the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee and the Property Trustee, their
agents and counsel; and
(ii) all Events of Default with respect to the Debt Securities, other
than the non-payment of the principal of the Debt Securities which has
become due solely by such acceleration, have been cured or waived as
provided in Section 6.1 of the Indenture.
The Holders of a majority in aggregate Liquidation Amount of the Preferred
Securities may, on behalf of the Holders of all the Preferred Securities, waive
any past default if a sum sufficient to pay all matured installments of interest
and principal (and premium, if any) due otherwise than by acceleration has been
deposited with the Indenture Trustee except a default in respect of a covenant
or provision which under the Indenture cannot be modified or amended without the
consent of the holder of each outstanding Debt Security. No such rescission
shall affect any subsequent default or impair any right consequent thereon.
(c) For so long as any Preferred Securities remain Outstanding, to the
fullest extent permitted by law and subject to the terms of this Trust Agreement
and the Indenture, upon an Event of Default with respect to any Debt Security
specified in Section 6.1 of the Indenture, any Holder of Preferred Securities
shall have the right to institute a proceeding directly against the Sponsor,
pursuant to the Indenture, for enforcement of payment to such Holder of the
principal amount of or interest on Debt Securities having a principal amount
equal to the Liquidation Amount of the Preferred Securities of such Holder (a
"Direct Action"). In connection with any such Direct Action, the Holder of the
Common Securities will be subrogated to the rights of any Holder of the
Preferred Securities to the extent of any payment made by the Sponsor to such
Holder of Preferred Securities as a result of such Direct Action. Except as set
forth in Section 5.14(b) and (c), the Holders of Preferred Securities shall have
no right to exercise directly any right or remedy available to the holders of,
or in respect of, the Debt Securities.
Article VI.
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
Section 6.1. Limitations on Voting Rights.
(a) Except as provided in this Section, in Sections 5.14, 8.10 and 10.2 and
in the Indenture and as otherwise required by law, no Holder of Preferred
Securities shall have any right to vote or in any manner otherwise control the
administration, operation and management of the Trust or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
25
of the Trust Securities Certificates, be construed so as to constitute the
Securityholders from time to time as partners or members of an association.
(b) So long as any Debt Securities are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Indenture Trustee, or executing any
trust or power conferred on the Indenture Trustee with respect to such Debt
Securities, (ii) waive any past default which is waivable under Section 6.1 of
the Indenture, (iii) exercise any right to rescind or annul a declaration that
the principal of all the Debt Securities shall be due and payable or (iv)
consent to any amendment, modification or termination of the Indenture or the
Debt Securities, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of at least a majority in
Liquidation Amount of all Outstanding Preferred Securities, provided, however,
that where a consent under the Indenture would require the consent of each
Holder of Debt Securities affected thereby, no such consent shall be given by
the Property Trustee without the prior written consent of each Holder of
Preferred Securities. The Trustees shall not revoke any action previously
authorized or approved by a vote of the Holders of Preferred Securities, except
by a subsequent vote of the Holders of Preferred Securities. The Property
Trustee shall notify all Holders of the Preferred Securities of any notice of
default received from the Indenture Trustee with respect to the Debt Securities.
In addition to obtaining the foregoing approvals of the Holders of the Preferred
Securities, prior to taking any of the foregoing actions, the Trustees shall, at
the expense of the Sponsor, obtain an Opinion of Counsel experienced in such
matters to the effect that the Trust will not be classified as an association
taxable as a corporation for United States Federal income tax purposes on
account of such action.
(c) If any proposed amendment to the Trust Agreement provides for, or the
Trustees otherwise propose to effect, (i) any action that would adversely affect
in any material respect the powers, preferences or special rights of the
Preferred Securities, whether by way of amendment to the Trust Agreement or
otherwise, or (ii) the dissolution, winding-up or termination of the Trust,
other than pursuant to the terms of this Trust Agreement, then the Holders of
Outstanding Preferred Securities as a 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 the Holders of at least a majority in Liquidation
Amount of the Outstanding Preferred Securities. Notwithstanding any other
provision of this Trust Agreement, no amendment to this Trust Agreement may be
made if, as a result of such amendment, the Trust would be classified as an
association taxable as a corporation for United States Federal income tax
purposes.
Section 6.2. Notice of Meetings.
Notice of all meetings of the Preferred Securityholders, stating the time,
place and purpose of the meeting, shall be given by the Property Trustee
pursuant to Section 10.8 to each Preferred Securityholder of record, at his
registered address, at least 15 days and not more than 90 days before the
meeting. At any such meeting, any business properly before the meeting may be so
considered whether or not stated in the notice of the meeting. Any adjourned
meeting may be held as adjourned without further notice.
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Section 6.3. Meetings of Preferred Securityholders.
No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Securityholders to
vote on any matter upon the written request of the Preferred Securityholders of
record of 25% in aggregate Liquidation Amount of the Preferred Securities (based
upon their Liquidation Amount) and the Administrative Trustees or the Property
Trustee may, at any time in their discretion, call a meeting of Preferred
Securityholders to vote on any matters as to which Preferred Securityholders are
entitled to vote.
Preferred Securityholders of record of 50% of the Outstanding Preferred
Securities (based upon their Liquidation Amount), present in person or by proxy,
shall constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by the Preferred
Securityholders of record present, in person or by proxy, holding a majority of
the Preferred Securities (based upon their Liquidation Amount) held by the
Preferred Securityholders of record present, either in person or by proxy, at
such meeting shall constitute the action of the Securityholders, unless this
Trust Agreement requires a greater number of affirmative votes.
Section 6.4. Voting Rights.
Securityholders shall be entitled to one vote for each $[ ] of Liquidation
Amount represented by their Trust Securities in respect of any matter as to
which such Securityholders are entitled to vote.
Section 6.5. Proxies, etc.
At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy, provided that no proxy shall be voted at any meeting
unless it shall have been placed on file with the Administrative Trustees, or
with such other officer or agent of the Trust as the Administrative Trustees may
direct, for verification prior to the time at which such vote shall be taken.
Pursuant to a resolution of the Property Trustee, proxies may be solicited in
the name of the Property Trustee or one or more officers of the Property
Trustee. Only Securityholders of record shall be entitled to vote. When Trust
Securities are held jointly by several persons, any one of them may vote at any
meeting in person or by proxy in respect of such Trust Securities, but if more
than one of them shall be present at such meeting in person or by proxy, and
such joint owners or their proxies so present disagree as to any vote to be
cast, such vote shall not be received in respect of such Trust Securities. A
proxy purporting to be executed by or on behalf of a Securityholder shall be
deemed valid unless challenged at or prior to its exercise, and the burden of
proving invalidity shall rest on the challenger. No proxy shall be valid more
than three years after its date of execution.
Section 6.6. Securityholder Action by Written Consent.
Any action which may be taken by Securityholders at a meeting may be taken
without a meeting if Securityholders holding a majority of all Outstanding Trust
Securities (based upon their Liquidation Amount) entitled to vote in respect of
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such action (or such larger proportion thereof as shall be required by any
express provision of this Trust Agreement) shall consent to the action in
writing.
Section 6.7. Record Date for Voting and Other Purposes.
For the purposes of determining the Securityholders who are entitled to
notice of and to vote at any meeting or by written consent, or to participate in
any distribution on the Trust Securities in respect of which a record date is
not otherwise provided for in this Trust Agreement, or for the purpose of any
other action, the Administrative Trustees may from time to time fix a date, not
more than 90 days prior to the date of any meeting of Securityholders or the
payment of a distribution or other action, as the case may be, as a record date
for the determination of the identity of the Securityholders of record for such
purposes.
Section 6.8. Acts of Securityholders.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Trust Agreement to be given, made or
taken by Securityholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Securityholders in
person or by an agent duly appointed in writing; and, except as otherwise
expressly provided herein, such action shall become effective when such
instrument or instruments are delivered to an Administrative Trustee. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Securityholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Trust Agreement and (subject to Section 8.1) conclusive in favor
of the Trustees, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which any Trustee receiving the same deems sufficient.
The ownership of Preferred Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder to take
any action hereunder with regard to any particular Trust Security may do so with
28
regard to all or any part of the Liquidation Amount of such Trust Security or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such liquidation amount.
If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder or
Trustee under this Article VI, then the determination of such matter by the
Property Trustee shall be conclusive with respect to such matter.
Section 6.9. Inspection of Records.
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Trust shall be open to inspection by Securityholders
during normal business hours for any purpose reasonably related to such
Securityholder's interest as a Securityholder.
Article VII.
REPRESENTATIONS AND WARRANTIES
Section 7.1. Representations and Warranties of the Property Trustee.
The Property Trustee hereby represents and warrants for the benefit of the
Sponsor and the Securityholders that:
(a) the Property Trustee is a New York banking corporation duly
organized, validly existing and in good standing under the laws of the
State of New York;
(b) the Property Trustee meets the applicable eligibility requirements
set forth in Section 8.7, has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and
delivered by the Property Trustee and constitutes the valid and legally
binding agreement of the Property Trustee enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles;
(d) the execution, delivery and performance of this Trust Agreement by
the Property Trustee have been duly authorized by all necessary corporate
or other action on the part of the Property Trustee and do not require any
approval of stockholders of the Property Trustee and such execution,
delivery and performance will not (i) violate the charter or by-laws of the
Property Trustee, (ii) violate any provision of, or constitute, with or
without notice or lapse of time, a default under, or result in the creation
or imposition of, any Lien on any properties included in the Trust Property
pursuant to the provisions of, any indenture, mortgage, credit agreement,
license or other agreement or instrument to which the Property Trustee is a
party or by which it is bound, or (iii) violate any law, governmental rule
29
or regulation of the State of New York governing the corporate, banking,
trust or general powers of the Property Trustee or any order, judgment or
decree applicable to the Property Trustee;
(e) neither the authorization, execution or delivery by the Property
Trustee of this Trust Agreement nor the consummation of any of the
transactions by the Property Trustee contemplated herein requires the
consent or approval of, the giving of notice to, the registration with or
the taking of any other action with respect to any governmental authority
or agency under any existing Federal law governing the banking, trust or
general powers of the Property Trustee or under the laws of the State of
New York; and
(f) there are no proceedings pending or, to the best of the Property
Trustee's knowledge, threatened against or affecting the Property Trustee
in any court or before any governmental authority, agency or arbitration
board or tribunal which, individually or in the aggregate, would materially
and adversely affect the Trust or would question the right, power and
authority of the Property Trustee to enter into or perform its obligations
as one of the Trustees under this Trust Agreement.
Section 7.2. Representations and Warranties of the Delaware Trustee.
The Property Trustee and the Delaware Trustee, each severally on behalf of
and as to itself, hereby represents and warrants for the benefit of the Sponsor
and the Securityholders that:
(a) the Delaware Trustee is a Delaware banking corporation duly
organized, validly existing and in good standing in the State of Delaware;
(b) the Delaware Trustee meets the applicable eligibility requirements
set forth in Section 8.7, has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and
delivered by the Delaware Trustee and constitutes the valid and legally
binding agreement of the Delaware Trustee enforceable against each of it in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles;
(d) the execution, delivery and performance of this Trust Agreement by
the Delaware Trustee have been duly authorized by all necessary corporate
or other action on the part of the Delaware Trustee and do not require any
approval of stockholders of the Delaware Trustee and such execution,
delivery and performance will not (i) violate the charter or by-laws of the
Delaware Trustee, (ii) violate any provision of, or constitute, with or
without notice or lapse of time, a default under, or result in the creation
or imposition of, any Lien on any properties included in the Trust Property
pursuant to the provisions of, any indenture, mortgage, credit agreement,
license or other agreement or instrument to which the Delaware Trustee is a
party or by which it is bound, or (iii) violate any law, governmental rule
30
or regulation of the State of Delaware governing the corporate, banking,
trust or general powers of the Delaware Trustee or any order, judgment or
decree applicable to the Delaware Trustee;
(e) neither the authorization, execution or delivery by the Delaware
Trustee of this Trust Agreement nor the consummation of any of the
transactions by the Delaware Trustee contemplated herein requires the
consent or approval of, the giving of notice to, the registration with or
the taking of any other action with respect to any governmental authority
or agency under any existing Federal law governing the banking, or trust
powers of the Delaware Trustee or under the laws of the State of Delaware;
and
(f) there are no proceedings pending or, to the best of the Delaware
Trustee's knowledge, threatened against or affecting the Delaware Trustee
in any court or before any governmental authority, agency or arbitration
board or tribunal which, individually or in the aggregate, would materially
and adversely affect the Trust or would question the right, power and
authority of the Delaware Trustee to enter into or perform its obligations
as one of the Trustees under this Trust Agreement.
Section 7.3. Representations and Warranties of Sponsor.
The Sponsor hereby represents and warrants for the benefit of the
Securityholders that:
(a) the Trust Securities Certificates issued at each Time of Delivery on
behalf of the Trust have been duly authorized and will have been, duly and
validly executed, issued and delivered by the Administrative Trustees pursuant
to the terms and provisions of, and in accordance with the requirements of, this
Trust Agreement, and the Securityholders will be, as of each such date, entitled
to the benefits of this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges payable by the
Trust (or the Trustees on behalf of the Trust) under the laws of the State of
Delaware or any political subdivision thereof in connection with the execution,
delivery and performance by the Property Trustee or the Delaware Trustee, as the
case may be, of this Trust Agreement.
Article VIII.
THE TRUSTEES
Section 8.1. Certain Duties and Responsibilities.
(a) The duties and responsibilities of the Trustees shall be as provided by
this Trust Agreement and, in the case of the Property Trustee, subject to the
Trust Indenture Act. Notwithstanding the foregoing, no provision of this Trust
Agreement shall require the Trustees to expend or risk their own funds or
otherwise incur any financial liability in the performance of any of their
duties hereunder, or in the exercise of any of their rights or powers, if they
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this Trust
Agreement relating to the conduct or affecting the liability of or affording
protection to the Trustees shall be subject to the provisions of this Section.
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Nothing in this Trust Agreement shall be construed to release the Property
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct. To the extent that, at law or in equity,
an Administrative Trustee or the Delaware Trustee has duties (including
fiduciary duties) and liabilities relating thereto to the Trust or to the
Securityholders, such Administrative Trustee or Delaware Trustee shall not be
liable to the Trust or to any Securityholder for such Trustee's good faith
reliance on the provisions of this Trust Agreement. The provisions of this Trust
Agreement, to the extent that they restrict the duties and liabilities of the
Administrative Trustees or the Delaware Trustee otherwise existing at law or in
equity, are agreed by the Sponsor and the Securityholders to replace such other
duties and liabilities of such Trustees.
(b) All payments made by the Property Trustee or a Paying Agent in respect
of the Trust Securities shall be made only from the revenue and proceeds from
the Trust Property and only to the extent that there shall be sufficient revenue
or proceeds from the Trust Property to enable the Property Trustee or a Paying
Agent to make payments in accordance with the terms hereof. Each Securityholder,
by its acceptance of a Trust Security, agrees that it will look solely to the
revenue and proceeds from the Trust Property to the extent legally available for
distribution to it as herein provided and that the Trustees are not personally
liable to it for any amount distributable in respect of any Trust Security or
for any other liability in respect of any Trust Security. This Section 8.1(b)
does not limit the liability of the Trustees expressly set forth elsewhere in
this Trust Agreement and, in the case of the Property Trustee, in the Trust
Indenture Act.
(c) No provision of this Trust Agreement shall be construed to relieve the
Property Trustee from liability for its own negligent action or its own
negligent failure to act, except that:
(i) the Property Trustee shall not be liable for any error of judgment
made in good faith by an authorized officer of the Property Trustee, unless
it shall be proved that the Property Trustee was negligent in ascertaining
the pertinent facts;
(ii) 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 Trust 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 Trust Agreement;
(iii) the Property Trustee's sole duty with respect to the custody,
safe keeping and physical preservation of the Debt Securities and the
Payment 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 Trust Agreement and the Trust Indenture Act;
(iv) the Property Trustee shall not be liable for any interest on any
money received by it except as it may otherwise agree with the Sponsor; and
money held by the Property Trustee need not be segregated from other funds
held by it except in relation to the Payment Account maintained by the
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Property Trustee pursuant to Section 3.1 and except to the extent otherwise
required by law; and
(v) the Property Trustee shall not be responsible for monitoring the
compliance by the Administrative Trustees or the Sponsor with their
respective duties under this Trust Agreement, nor shall the Property
Trustee be liable for the default or misconduct of the Administrative
Trustees or the Sponsor.
Section 8.2. Certain Notices.
Within 90 days after the occurrence of any default actually known to the
Property Trustee, the Property Trustee shall transmit, in the manner and to the
extent provided in Section 10.8, notice of such default to the Securityholders,
the Administrative Trustees and the Sponsor, unless such default shall have been
cured or waived before the giving of such notice (the term "default" or
"defaults" for the purposes of this Section being hereby defined to mean any
event or condition which is, or with notice or lapse of time or both would
become, an Event of Default); provided that, except in the case of default in
the payment of the principal of, or premium, if any, or interest, if any, on,
any of the Debt Securities of such series, the Property Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors or responsible
officers of the Property Trustee in good faith determines that the withholding
of such notice is in the interests of the Securityholders of such series.
Within five Business Days after the receipt of notice of the Sponsor's
exercise of its right to defer the payment of interest on the Debt Securities
pursuant to the Indenture, the Administrative Trustee shall transmit, in the
manner and to the extent provided in Section 10.8, notice of such exercise to
the Securityholders and the Property Trustee, unless such exercise shall have
been revoked.
Section 8.3. Certain Rights of Property Trustee.
Subject to the provisions of Section 8.1:
(a) the Property Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any resolution, Opinion of
Counsel, certificate, written representation of a Holder or transferee,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond, Debt
Security, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties; provided, however, that the Property Trustee shall
examine the evidence furnished to it pursuant to Section 314 of the Trust
Indenture Act to determine whether or not such evidence conforms to the
requirements of this Trust Agreement;
(b) if (i) in performing its duties under this Trust Agreement the
Property Trustee is required to decide between alternative courses of
action or (ii) in construing any of the provisions of this Trust Agreement
the Property Trustee finds the same ambiguous or inconsistent with any
other provisions contained herein or (iii) the Property Trustee is unsure
of the application of any provision of this Trust Agreement, then, except
33
as to any matter as to which the Preferred Securityholders are entitled to
vote under the terms of this Trust Agreement, the Property Trustee shall
deliver a notice to the Sponsor requesting written instructions of the
Sponsor as to the course of action to be taken and the Property Trustee
shall take such action, or refrain from taking such action, as the Property
Trustee shall be instructed in writing to take, or to refrain from taking,
by the Sponsor; provided, however, that if the Property Trustee does not
receive such instructions of the Sponsor within ten Business Days after it
has delivered such notice, or such reasonably shorter period of time set
forth in such notice (which to the extent practicable shall not be less
than two Business Days), it may, but shall be under no duty to, take or
refrain from taking such action not inconsistent with this Trust Agreement
as it shall deem advisable and in the best interests of the
Securityholders, in which event the Property Trustee shall have no
liability except for its own bad faith, negligence or willful misconduct;
(c) any direction or act of the Sponsor or the Administrative Trustees
contemplated by this Trust Agreement shall be sufficiently evidenced by an
Officers' Certificate;
(d) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be established
before undertaking, 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 rely upon an
Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Administrative Trustees;
(e) 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 reregistration thereof;
(f) the Property Trustee may consult with counsel (which counsel may
be counsel to the Sponsor or any of its Affiliates, and may include any of
its employees) and the advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon and in
accordance with such advice, 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 Trust Agreement from any court of competent
jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Trust Agreement at the request
or direction of any of the Securityholders pursuant to this Trust
Agreement, unless such Securityholders shall have offered to the Property
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request
or direction;
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(h) 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, consent, order, approval,
bond, Debt Security, note or other evidence of indebtedness or other paper
or document, unless requested in writing to do so by one or more
Securityholders, but the Property Trustee may make such further inquiry or
investigation into such facts or matters as it may see fit;
(i) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
its agents or attorneys, provided that the Property Trustee shall be
responsible for its own negligence or recklessness with respect to
selection of any agent or attorney appointed by it hereunder;
(j) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder the Property Trustee (i) may request instructions from the
Holders of the Trust Securities which instructions may only be given by the
Holders of the same proportion in Liquidation Amount of the Trust
Securities as would be entitled to direct the Property Trustee under the
terms of the Trust Securities in respect of such remedy, right or action,
(ii) may refrain from enforcing such remedy or right or taking such other
action until such instructions are received, and (iii) shall be protected
in acting in accordance with such instructions; and
(k) except as otherwise expressly provided by this Trust Agreement,
the Property Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Trust Agreement.
No provision of this Trust Agreement 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.
Section 8.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Sponsor, and the Trustees do not assume
any responsibility for their correctness. The Trustees shall not be accountable
for the use or application by the Sponsor of the proceeds of the Debt
Securities.
Section 8.5. May Hold Securities.
Any Trustee or any other agent of any Trustee or the Trust, in its
individual or any other capacity, may become the owner or pledgee of Trust
Securities and, subject to Sections 8.8 and 8.13 and except as provided in the
definition of the term "Outstanding" in Article I, may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other
agent.
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Section 8.6. Compensation; Indemnity; Fees.
The Sponsor, as borrower, agrees:
(a) to pay to the Trustees from time to time reasonable compensation
for all services rendered by them hereunder (which compensation shall not
be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable expenses, disbursements and
advances incurred or made by the Trustees in accordance with any provision
of this Trust Agreement (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence
or bad faith; and
(c) to the fullest extent permitted by applicable law, to indemnify
and hold harmless (i) each Trustee (including in its individual capacity),
(ii) any Affiliate of any Trustee, (iii) any officer, director,
shareholder, employee, representative or agent of any Trustee, and (iv) any
employee or agent of the Trust or its Affiliates, (such of the foregoing
referred to herein as an "Indemnified Person") from and against any loss,
damage, liability, tax, penalty, expense or claim of any kind or nature
whatsoever incurred by such Indemnified Person by reason of the creation,
operation or termination of the Trust or any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and
in a manner such Indemnified Person reasonably believed to be within the
scope of authority conferred on such Indemnified Person by this Trust
Agreement, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim to the extent incurred
by such Indemnified Person by reason of its own gross negligence (and, in
the case of the Property Trustee, ordinary negligence) or willful
misconduct with respect to such acts or omissions.
(d) to the fullest extent permitted by applicable law, to advance
expenses (including legal fees) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding shall, from time to
time, prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Sponsor of (i) a written affirmation by or
on behalf of the Indemnified Person of its or his good faith belief that it
or he has met the standard of conduct set forth in this Section 8.6 and
(ii) an undertaking by or on behalf of the Indemnified Person to repay such
amount if it shall be determined that the Indemnified Person is not
entitled to be indemnified as authorized in the preceding subsection.
The provisions of this Section 8.6 shall survive the termination of this
Trust Agreement and shall survive the resignation or removal of any Trustee.
No Trustee may claim any lien or charge on any Trust Property as a result
of any amount due pursuant to this Section 8.6.
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Section 8.7. Corporate Property Trustee Required; Eligibility of Trustees.
(a) There shall at all times be a Property Trustee hereunder with respect
to the Trust Securities. The Property Trustee shall be a Person that is eligible
pursuant to the Trust Indenture Act to act as such and has a combined capital
and surplus of at least $50,000,000. If any such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Property Trustee with respect to the Trust
Securities shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative 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 persons authorized to bind that
entity.
(c) There shall at all times be a Delaware Trustee with respect to the
Trust Securities. The Delaware Trustee shall either be (i) a natural person who
is at least 21 years of age and a resident of the State of Delaware or (ii) a
legal entity with its principal place of business in the State of Delaware and
that otherwise meets the requirements of applicable Delaware law that shall act
through one or more persons authorized to bind such entity.
Section 8.8. Conflicting Interests.
If the Property Trustee has or shall acquire a conflicting interest within
the meaning of the Trust Indenture Act, the Property Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Trust
Agreement. The Sponsor and any 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 Trust Securities shall have no rights by virtue of this Trust
Agreement 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. Neither the
Sponsor, nor any 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 the
Sponsor or any 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 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 Depository 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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Section 8.9. Co-Trustees and Separate Trustee.
Unless an Event of Default shall have occurred and be continuing, at any
time or times, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust Property may
at the time be located, the Sponsor and the Administrative Trustees, by agreed
action of the majority of such Trustees, shall have power to appoint, and upon
the written request of the Administrative Trustees, the Sponsor shall for such
purpose join with the Administrative Trustees in the execution, delivery, and
performance of all instruments and agreements necessary or proper to appoint,
one or more Persons approved by the Property Trustee either to act as co-trustee
jointly with the Property Trustee, of all or any part of such Trust Property, or
to the extent required by law to act as separate trustee of any such property,
in either case with such powers as may be provided in the instrument of
appointment, and to vest in such Person or Persons in the capacity aforesaid,
any property, title, right or power deemed necessary or desirable, subject to
the other provisions of this Section. If the Sponsor does not join in such
appointment within 15 days after the receipt by it of a request so to do, or in
case an Event of Default with respect to any Debt Security has occurred and is
continuing, the Property Trustee alone shall have power to make such
appointment. Any co-trustee or separate trustee appointed pursuant to this
Section shall either be (i) a natural person who is at least 21 years of age and
a resident of the United States or (ii) a legal entity with its principal place
of business in the United States that shall act through one or more persons
authorized to bind such entity.
Should any written instrument from the Sponsor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged and delivered
by the Sponsor.
Every co-trustee or separate trustee shall, to the extent permitted by law,
but to such extent only, be appointed subject to the following terms, namely:
(a) The Trust Securities shall be executed and delivered and all rights,
powers, duties, and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustees specified hereunder, shall be exercised,
solely by such Trustees and not by such co-trustee or separate trustee.
(b) The rights, powers, duties, and obligations hereby conferred or imposed
upon the Property Trustee in respect of any property covered by such appointment
shall be conferred or imposed upon and exercised or performed by the Property
Trustee or by the Property Trustee and such co-trustee or separate trustee
jointly, as shall be provided in the instrument appointing such co-trustee or
separate trustee, except to the extent that under any law of any jurisdiction in
which any particular act is to be performed, the Property Trustee shall be
incompetent or unqualified to perform such act, in which event such rights,
powers, duties and obligations shall be exercised and performed by such
co-trustee or separate trustee.
(c) The Property Trustee at any time, by an instrument in writing executed
by it, with the written concurrence of the Sponsor, may accept the resignation
38
of or remove any co-trustee or separate trustee appointed under this Section,
and, in case an Event of Default with respect to any Debt Security has occurred
and is continuing, the Property Trustee shall have power to accept the
resignation of, or remove, any such co-trustee or separate trustee without the
concurrence of the Sponsor. Upon the written request of the Property Trustee,
the Sponsor shall join with the Property Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to effectuate
such resignation or removal. A successor to any co-trustee or separate trustee
so resigned or removed may be appointed in the manner provided in this Section.
(d) No co-trustee or separate trustee hereunder shall be personally liable
by reason of any act or omission of the Property Trustee or any other trustee
hereunder.
(e) The Property Trustee shall not be liable by reason of any act of a
co-trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall be deemed to
have been delivered to each such co-trustee and separate trustee.
Section 8.10. Resignation and Removal; Appointment of Successor.
No resignation or removal of any Trustee (the "Relevant Trustee") and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 8.11.
Subject to the immediately preceding paragraph, the Relevant Trustee may
resign at any time by giving written notice thereof to the Securityholders. If
the instrument of acceptance by the successor Trustee required by Section 8.11
shall not have been delivered to the Relevant Trustee within 30 days after the
giving of such notice of resignation, the Relevant Trustee may petition
(pursuant to the Indenture, at the expense of the Sponsor), any court of
competent jurisdiction for the appointment of a successor Relevant Trustee.
Unless an Event of Default with respect to any Debt Security shall have
occurred and be continuing, any Trustee may be removed at any time by Act of the
Common Securityholder. If an Indenture Event of Default shall have occurred and
be continuing, the Property Trustee or the Delaware Trustee, or both of them,
may be removed at such time by Act of the Holders of a majority in Liquidation
Amount of the Preferred Securities, delivered to the Relevant Trustee (in its
individual capacity and on behalf of the Trust). An Administrative Trustee may
be removed by the Common Securityholder at any time.
If any Trustee shall resign, be removed or become incapable of acting as
Trustee, or if a vacancy shall occur in the office of any Trustee for any cause,
at a time when no Event of Default with respect to any Debt Security shall have
occurred and be continuing, the Common Securityholder, by Act of the Common
Securityholder delivered to the retiring Trustee, shall promptly appoint a
successor Trustee or Trustees, and the retiring Trustee shall comply with the
applicable requirements of Section 8.11. If the Property Trustee or the Delaware
Trustee shall resign, be removed or become incapable of continuing to act as the
Property Trustee or the Delaware Trustee, as the case may be, at a time when an
Event of Default with respect to any Debt Security shall have occurred and be
39
continuing, the Preferred Securityholders, by Act of the Securityholders of a
majority in Liquidation Amount of the Preferred Securities then Outstanding
delivered to the retiring Relevant Trustee, shall promptly appoint a successor
Relevant Trustee or Trustees, and such successor Trustee shall comply with the
applicable requirements of Section 8.11.
If an Administrative Trustee shall resign, be removed or become incapable
of acting as Administrative Trustee, at a time when an Event of Default with
respect to any Debt Security shall have occurred and be continuing, the Common
Securityholder by Act of the Common Securityholder delivered to the
Administrative Trustee shall promptly appoint a successor Administrative Trustee
or Administrative Trustees and such successor Administrative Trustee or Trustees
shall comply with the applicable requirements of Section 8.11. If no successor
Relevant Trustee shall have been so appointed by the Common Securityholder or
the Preferred Securityholders and accepted appointment in the manner required by
Section 8.11, any Securityholder who has been a Securityholder of Trust
Securities for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Relevant Trustee.
The Property Trustee shall give notice of each resignation and each removal
of a Trustee and each appointment of a successor Trustee to all Securityholders
in the manner provided in Section 10.8 and shall give notice to the Sponsor.
Each notice shall include the name of the successor Relevant Trustee and the
address of its Corporate Trust Office if it is the Property Trustee.
Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Delaware Trustee who is
a natural person dies or becomes, in the opinion of the Sponsor, incompetent or
incapacitated, the vacancy created by such death, incompetence or incapacity may
be filled by (a) the unanimous act of remaining Administrative Trustees if there
are at least two of them or (b) otherwise by the Sponsor (with the successor in
each case being a Person who satisfies the eligibility requirement for
Administrative Trustees or Delaware Trustee, as the case may be, set forth in
Section 8.7).
Section 8.11. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Relevant Trustee, the
retiring Relevant Trustee and each successor Relevant Trustee with respect to
the Trust Securities shall execute and deliver an amendment hereto wherein each
successor Relevant Trustee shall accept such appointment and which (a) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Trust Securities and the Trust and (b) shall add to or change any of the
provisions of this Trust Agreement as shall be necessary to provide for or
facilitate the administration of the Trust by more than one Relevant Trustee, it
being understood that nothing herein or in such amendment shall constitute such
Relevant Trustees co-trustees and upon the execution and delivery of such
amendment the resignation or removal of the retiring Relevant Trustee shall
become effective to the extent provided therein and each such successor Relevant
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Relevant Trustee; but,
40
on request of the Trust or any successor Relevant Trustee such retiring Relevant
Trustee shall duly assign, transfer and deliver to such successor Relevant
Trustee all Trust Property, all proceeds thereof and money held by such retiring
Relevant Trustee hereunder with respect to the Trust Securities and the Trust.
Upon request of any such successor Relevant Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all such rights, powers and trusts
referred to in the first or second preceding paragraph, as the case may be.
No successor Relevant Trustee shall accept its appointment unless at the
time of such acceptance such successor Relevant Trustee shall be qualified and
eligible under this Article.
Section 8.12. Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Property Trustee or the Delaware Trustee may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which such Relevant
Trustee shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of such Relevant Trustee, shall be the successor of
such Relevant Trustee hereunder, provided such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto.
Section 8.13. Preferential Collection of Claims Against Sponsor or Trust.
If and when the Property Trustee or the Delaware Trustee shall be or become
a creditor of the Sponsor or the Trust (or any other obligor upon the Debt
Securities or the Trust Securities), the Property Trustee or the Delaware
Trustee, as the case may be, shall be subject to and shall take all actions
necessary in order to comply with the provisions of the Trust Indenture Act
regarding the collection of claims against the Sponsor or Trust (or any such
other obligor).
Section 8.14. Reports by the Property Trustee.
(a) The Property Trustee shall transmit to Securityholders such reports
concerning the Property Trustee and its actions under this Trust Agreement as
may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant thereto. If required by Section 313(a) of the Trust
Indenture Act, the Property Trustee shall, within sixty days after each [ ]
following the date of this Trust Agreement deliver to Securityholders a brief
report, dated as of such [ ], which complies with the provisions of such Section
313(a).
(b) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Property Trustee with each national stock exchange, the
Nasdaq National Market or such other interdealer quotation system or
self-regulatory organization upon which the Trust Securities are listed or
traded, with the Commission and with the Sponsor.
41
Section 8.15. Reports to the Property Trustee.
The Sponsor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such documents, opinions, reports and
information as required by Section 314 of the Trust Indenture Act (if any) and
the compliance certificate required by Section 314(a) of the Trust Indenture Act
in the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
Section 8.16. Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Trust Agreement 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 shall be given in the form of an
Officers' Certificate. Any certificate or opinion with respect to compliance
with a condition or covenant provided for herein shall comply with Section
314(e) of the Trust Indenture Act.
Section 8.17. Number of Trustees.
(a) The number of Trustees shall be four, provided that the Holder of all
of the Common Securities by written instrument may increase or decrease the
number of Administrative Trustees. The Property Trustee and the Delaware Trustee
may be the same Person, subject to the applicable eligibility requirements set
forth herein.
(b) If a Trustee ceases to hold office for any reason and the number of
Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the
number of Trustees is increased pursuant to Section 8.17(a), a vacancy shall
occur. The vacancy shall be filled with a Trustee appointed in accordance with
Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy, incompetence
or incapacity to perform the duties of a Trustee shall not operate to annul,
dissolve or terminate the Trust. Whenever a vacancy in the number of
Administrative Trustees shall occur, until such vacancy is filled by the
appointment of an Administrative Trustee in accordance with Section 8.10, the
Administrative Trustees in office, regardless of their number (and
notwithstanding any other provision of this Agreement), shall have all the
powers granted to the Administrative Trustees and shall discharge all the duties
imposed upon the Administrative Trustees by this Trust Agreement.
Section 8.18. Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
2.7(a), including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
42
(b) The Administrative Trustees shall have power to delegate from time to
time to such of their number or to the Sponsor the doing of such things and the
execution of such instruments either in the name of the Trust or the names of
the Administrative Trustees or otherwise as the Administrative Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of this Trust Agreement, as set forth herein.
Article IX.
DISSOLUTION, LIQUIDATION AND MERGER
Section 9.1. Dissolution Upon Expiration Date.
Unless earlier dissolved, the Trust shall automatically dissolve on
[December 31, ----] (the "Expiration Date"). Thereafter, the Trust Property
shall be distributed in accordance with Section 9.4.
Section 9.2. Early Dissolution.
The first to occur of any of the following events is an "Early Termination
Event," the occurrence of which shall cause a dissolution of the Trust:
(a) the occurrence of a Bankruptcy Event in respect of, or the dissolution
or liquidation of, the Sponsor;
(b) the written direction to the Property Trustee from the Sponsor at any
time (which direction is optional and wholly within the discretion of the
Sponsor) to dissolve the Trust and distribute Debt Securities to Securityholders
in exchange for the Preferred Securities;
(c) the redemption of all of the Preferred Securities; and
(d) the entry of an order for dissolution of the Trust by a court of
competent jurisdiction.
Section 9.3. Termination.
The respective obligations and responsibilities of the Trustees and the
Trust created and continued hereby shall terminate upon the latest to occur of
the following: (a) the distribution by the Property Trustee to Securityholders
upon the liquidation of the Trust pursuant to Section 9.4, or upon the
redemption of all of the Trust Securities pursuant to Section 4.2, of all
amounts required to be distributed hereunder upon the final payment of the Trust
Securities; (b) the payment of any expenses owed by the Trust; and (c) the
discharge of all administrative duties of the Administrative Trustees, including
the performance of any tax reporting obligations with respect to the Trust or
the Securityholders.
Section 9.4. Liquidation.
(a) If an Early Termination Event specified in clause (a), (b) or (d) of
Section 9.2 occurs or upon the Expiration Date, the Trust shall be liquidated by
43
the Trustees as expeditiously as the Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to each Securityholder a Like Amount of Debt
Securities, subject to Section 9.4(d). Notice of liquidation shall be given by
the Property Trustee by first-class mail, postage prepaid mailed not later than
30 nor more than 60 days prior to the Liquidation Date to each Holder of Trust
Securities at such Holder's address appearing in the Securities Register. All
notices of liquidation shall:
(i) state the CUSIP number of the Trust Securities;
(ii) state the Liquidation Date;
(iii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debt Securities; and
(iv) provide such information with respect to the mechanics by which
Holders may exchange Trust Securities Certificates for Debt Securities, or
if Section 9.4(d) applies receive a Liquidation Distribution, as the
Administrative Trustees or the Property Trustee shall deem appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect the
liquidation of the Trust and distribution of the Debt Securities to
Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the Liquidation
Date) and, either itself acting as exchange agent or through the appointment of
a separate exchange agent, shall establish such procedures as it shall deem
appropriate to effect the distribution of Debt Securities in exchange for the
Outstanding Trust Securities Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the Liquidation
Date, (i) the Trust Securities will no longer be deemed to be Outstanding, (ii)
certificates representing a Like Amount of Debt Securities will be issued to
Holders of Trust Securities Certificates, upon surrender of such certificates to
the Administrative Trustees or their agent for exchange, (iii) the Sponsor shall
use its reasonable efforts to have the Debt Securities listed on the New York
Stock Exchange, the Pacific Exchange or on such other exchange, interdealer
quotation system or self-regulatory organization as the Preferred Securities are
then listed, (iv) any Trust Securities Certificates not so surrendered for
exchange will be deemed to represent a Like Amount of Debt Securities, accruing
interest at the rate provided for in the Debt Securities from the last
Distribution Date on which a Distribution was made on such Trust Securities
Certificates until such certificates are so surrendered (and until such
certificates are so surrendered, no payments of interest or principal will be
made to Holders of Trust Securities Certificates with respect to such Debt
Securities) and (v) all rights of Securityholders holding Trust Securities will
cease, except the right of such Securityholders to receive Debt Securities upon
surrender of Trust Securities Certificates.
(d) In the event that, notwithstanding the other provisions of this Section
9.4, whether because of an order for dissolution entered by a court of competent
jurisdiction or otherwise, distribution of the Debt Securities in the manner
44
provided herein is determined by the Property Trustee not to be practical, the
Trust Property shall be liquidated, and the Trust shall be wound-up by the
Property Trustee in such manner as the Property Trustee determines. In such
event, Securityholders will be entitled to receive out of the assets of the
Trust available for distribution to Securityholders, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, an amount
equal to the Liquidation Amount per Trust Security plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"). If, upon any such winding-up, 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, subject to the next
succeeding sentence, the amounts payable by the Trust on the Trust Securities
shall be paid on a pro rata basis (based upon Liquidation Amounts). The Holder
of the Common Securities will be entitled to receive Liquidation Distributions
upon any such winding-up pro rata (determined as aforesaid) with Holders of
Preferred Securities, except that, if an Event of Default with respect to any
Debt Security has occurred and is continuing, the Preferred Securities shall
have a priority over the Common Securities.
Section 9.5. Mergers, Consolidations, Amalgamations or Replacements of the
Trust.
The Trust may not merge with or into, consolidate, convert into,
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 9.5 or Section 9.4. At the request of the Sponsor, with the consent of
the Administrative Trustees and without the consent of the Holders of the
Preferred Securities, the Property Trustee or the Delaware Trustee, the Trust
may merge with or into, consolidate, convert into, amalgamate, or be replaced by
or convey, transfer or lease its properties and assets substantially as an
entirety to a trust organized as such under the laws of any State; provided,
that (i) such successor entity either (a) expressly assumes all of the
obligations of the Trust with respect to the Preferred Securities or (b)
substitutes for the Preferred Securities other securities having substantially
the same terms as the Preferred Securities (the "Successor Securities") so long
as the Successor Securities rank the same as the Preferred Securities rank 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 Debt Securities, (iii) the Successor Securities are listed or
traded, or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or other organization on which the
Preferred Securities are then listed or traded, if any, (iv) such merger,
consolidation, conversion, amalgamation, replacement, conveyance, transfer or
lease does not cause the Preferred Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical rating
organization, (v) such merger, consolidation, conversion, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Preferred Securities (including
any Successor Securities) in any material respect, (vi) such successor entity
has a purpose substantially identical to that of the Trust, (vii) prior to such
merger, consolidation, conversion, amalgamation, replacement, conveyance,
transfer or lease, the Sponsor has received an Opinion of Counsel to the effect
that (a) such merger, consolidation, conversion, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
45
and privileges of the holders of the Preferred Securities (including any
Successor Securities) in any material respect, and (b) following such merger,
consolidation, conversion, amalgamation, replacement, conveyance, transfer or
lease, neither the Trust nor such successor entity will be required to register
as an investment company under the 1940 Act 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 Guarantee.
Notwithstanding the foregoing, the Trust shall not, except with the consent of
Holders of 100% in Liquidation Amount of the Preferred Securities, consolidate,
amalgamate, merge with or into, convert into or be replaced by or convey,
transfer or lease its properties and assets substantially as an entirety to any
other Person or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, conversion, 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 X.
MISCELLANEOUS PROVISIONS
Section 10.1. Limitation of Rights of Securityholders.
The death, incapacity, dissolution, bankruptcy or termination of any Person
having an interest, beneficial or otherwise, in Trust Securities shall not
operate to terminate this Trust Agreement nor dissolve, terminate or annul the
Trust nor entitle the legal representatives or heirs of such Person or any
Securityholder for such person, to claim an accounting, take any action or bring
any proceeding in any court for a partition or winding-up of the arrangements
contemplated hereby, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
Section 10.2. Amendment.
(a) This Trust Agreement may be amended from time to time by the Trustees
and the Sponsor, without the consent of any Securityholders, (i) to cure any
ambiguity, correct or supplement any provision herein which may be inconsistent
with any other provision herein, or to make any other provisions with respect to
matters or questions arising under this Trust Agreement, which shall not be
inconsistent with the other provisions of this Trust Agreement, or (ii) to
modify, eliminate or add to any provisions of this Trust Agreement to such
extent as shall be necessary to ensure that the Trust will be classified for
United States Federal income tax purposes as a grantor trust at all times that
any Trust Securities are outstanding or to ensure that the Trust will not be
required to register as an investment company under the 1940 Act; provided,
however, that in the case of clause (i), such action shall not adversely affect
in any material respect the interests of any Securityholder, and any such
amendments of this Trust Agreement shall become effective when notice thereof is
given to the Securityholders.
(b) Except as provided in Section 10.2(c) hereof, any provision of this
Trust Agreement may be amended by the Trustees and the Sponsor with (i) the
consent of Trust Securityholders representing not less than a majority (based
upon Liquidation Amounts) of the Trust Securities then Outstanding and (ii)
46
receipt by the Trustees of an Opinion of Counsel to the effect that such
amendment or the exercise of any power granted to the Trustees in accordance
with such amendment will not affect the Trust's status as a grantor trust for
United States Federal income tax purposes or the Trust's exemption from status
of an investment company under the 1940 Act.
(c) In addition to and notwithstanding any other provision in this Trust
Agreement, without the consent of each affected Securityholder, this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a Securityholder to institute suit
for the enforcement of any such payment on or after such date; notwithstanding
any other provision herein, without the unanimous consent of the
Securityholders, this paragraph (c) of this Section 10.2 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for the exemption from
status of an investment company under the 1940 Act or fail or cease to be
classified as a grantor trust for United States Federal income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Sponsor, this Trust Agreement may not be amended in a
manner which imposes any additional obligation on the Sponsor.
(f) In the event that any amendment to this Trust Agreement is made, the
Administrative Trustees shall promptly provide to the Sponsor a copy of such
amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be required
to enter into any amendment to this Trust Agreement which affects its own
rights, duties or immunities under this Trust Agreement. The Property Trustee
and Delaware Trustee shall be entitled to receive an Opinion of Counsel and an
Officers' Certificate stating that any amendment to this Trust Agreement is in
compliance with this Trust Agreement.
Section 10.3. Separability.
In case any provision in this Trust Agreement or in the Trust Securities
Certificates shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 10.4. Governing Law.
This Trust Agreement and the rights and obligations of each of the
Securityholders, the Trust and the Trustees with respect to this Trust Agreement
and the Trust Securities shall be construed in accordance with and governed by
the laws of the State of Delaware (without regard to conflict of law
principles).
47
Section 10.5. Payments Due on Non-Business Day.
If the date fixed for any payment on any Trust Security shall be a day that
is not a Business Day, then such payment need not be made on such date but may
be made on the next succeeding day that is a Business Day (except as otherwise
provided in Sections 4.1(a) and 4.2(d)), with the same force and effect as
though made on the date fixed for such payment, and no interest shall accrue
thereon for the period after such date.
Section 10.6. Successors.
This Trust Agreement shall be binding upon and shall inure to the benefit
of any successor to the Sponsor, the Trust or the Relevant Trustee, including
any successor by operation of law. Except in connection with transactions
permitted under Article X of the Indenture and pursuant to which the assignee
agrees in writing to perform the Sponsor's obligations hereunder, the Sponsor
shall not assign its obligations hereunder.
Section 10.7. Headings.
The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.
Section 10.8. Reports, Notices and Demands.
Any report, notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
any Securityholder or the Sponsor may be given or served in writing by deposit
thereof, first-class postage prepaid, in the United States mail, hand delivery
or facsimile transmission, addressed, (a) in the case of a Preferred
Securityholder, to such Preferred Securityholder as such Securityholder's name
and address may appear on the Securities Register; and (b) in the case of the
Common Securityholder or the Sponsor, to Covanta Energy Corporation, 40 Lane
Road, Fairfield, New Jersey 07004, Attention: Treasurer, facsimile no.: [ ]; or,
in each case, as such Securityholder's name and address may have been filed with
the Property Trustee for that purpose within two years preceding such
transmission. Such notice, demand or other communication to or upon a
Securityholder shall be deemed to have been sufficiently given or made, for all
purposes, upon hand delivery, mailing or transmission.
Any notice, demand or other communication which by any provision of this
Trust Agreement is required or permitted to be given or served to or upon the
Trust, the Property Trustee, the Delaware Trustee or the Administrative Trustees
shall be given in writing addressed (until another address is published by the
Trust) as follows: (a) with respect to the Property Trustee to Bankers Trust
Company, [ ], Attention: [ ]; (b) with respect to the Delaware Trustee, to
Wilmington Trust Company, Rodney Square North, 1100 N. Market Street,
Wilmington, Delaware 19890, Attention: Corporate Trust Administration - Covanta
Capital Trust [ ]; and (c) with respect to the Administrative Trustees, to them
at the address above for notices to the Sponsor, marked "Attention
Administrative Trustees of Covanta Capital Trust [ ]." Such notice, demand or
other communication to or upon the Trust or the Property Trustee shall be deemed
to have been sufficiently given or made only upon actual receipt of the writing
by the Trust or the Property Trustee.
48
Section 10.9. Agreement Not to Petition.
Each of the Trustees and the Sponsor agree for the benefit of the
Securityholders that, until at least one year and one day after the Trust has
been terminated in accordance with Article IX, they shall not file, or join in
the filing of, a petition against the Trust under any bankruptcy, insolvency,
reorganization or other similar law (including, without limitation, the United
States Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in
the commencement of any proceeding against the Trust under any Bankruptcy Law.
In the event the Sponsor takes action in violation of this Section 10.9, the
Property Trustee agrees, for the benefit of Securityholders, that at the expense
of the Sponsor, it shall file an answer with the bankruptcy court or otherwise
properly contest the filing of such petition by the Sponsor against the Trust or
the commencement of such action and raise the defense that the Sponsor has
agreed in writing not to take such action and should be stopped and precluded
therefrom and such other defenses, if any, as counsel for the Trustee or the
Trust may assert. The provisions of this Section 10.9 shall survive the
termination of this Trust Agreement.
Section 10.10. Trust Indenture Act; Conflict with Trust Indenture Act.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement 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 any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Trust Agreement by any
of the provisions of the Trust Indenture Act, such required provision shall
control. If any provision of this Trust Agreement modifies or excludes any
provision of the Trust Indenture Act which may be so modified or excluded, the
latter provision shall be deemed to apply to this Trust Agreement as so modified
or excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Securities as equity securities representing
undivided beneficial ownership interests in the assets of the Trust.
Section 10.11. Acceptance of Terms of Trust Agreement, Guarantee and
Indenture.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY
OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE
OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL OWNERSHIP
INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST
AGREEMENT AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE
GUARANTEE AND THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST,
49
SUCH SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST
AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND
SUCH SECURITYHOLDER AND SUCH OTHERS.
COVANTA ENERGY CORPORATION
By:
-----------------------------------------------------
Name:
Title:
BANKERS TRUST COMPANY, as Property Trustee
By:
-----------------------------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY, as Delaware Trustee
By:
-----------------------------------------------------
Name:
Title:
[ ], as Administrative Trustee
[ ], as Administrative Trustee
50
EXHIBIT A
CERTIFICATE OF TRUST
OF
COVANTA CAPITAL TRUST [ ]
THIS CERTIFICATE OF TRUST of COVANTA CAPITAL TRUST [ ](the "Trust"), is
being duly executed and filed by the undersigned, as trustee, to form a business
trust under the Delaware Business Trust Act (12 Del. C. ss.ss.3801, et seq.)
(the "Act").
(i) Name. The name of the business trust formed hereby is Covanta Capital
Trust [ ].
(ii) Delaware Trustee. The name and business address of the trustee of the
Trust in the State of Delaware are:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
IN WITNESS WHEREOF, the undersigned has executed this Certificate of Trust
in accordance with 12 Del. C.ss.3801 of the Act.
Wilmington Trust Company, not in its individual
capacity but solely as Delaware Trustee
By: ----------------------------
Name:
Title:
A-1
EXHIBIT B
The Depository Trust Company
55 Water Street, 49th Floor
New York, New York 10041-0099
Attention: -------------------
General Counsel's Office
Re:
Ladies and Gentlemen:
The purpose of this letter is to set forth certain matters relating to the
issuance and deposit with The Depository Trust Company ("DTC") of the [TITLE OF
PREFERRED SECURITIES] (the "Preferred Securities"), of Covanta Capital Trust [
], a Delaware business trust (the "Issuer"), formed pursuant to a Trust
Agreement between Covanta Energy Corporation (the "Company") and BANKERS TRUST
COMPANY, as Property Trustee, WILMINGTON TRUST COMPANY, as Delaware Trustee, and
the Administrative Trustees named therein. The payment of distributions on the
Preferred Securities, and payments due upon liquidation of Issuer or redemption
of the Preferred Securities, to the extent the Issuer has funds available for
the payment thereof are guaranteed by the Company to the extent set forth in a
Guarantee Agreement dated --------, ---- by the Company with respect to the
Preferred Securities. The Company and the Issuer propose to sell the Preferred
Securities to certain Underwriters (the "Underwriters") pursuant to an
Underwriting Agreement dated --------, 2001 by and among the Underwriters, the
Issuer and the Company, and the Underwriters wish to take delivery of the
Preferred Securities through DTC. [ ] is acting as transfer agent and registrar
with respect to the Preferred Securities (then "Transfer Agent and Registrar").
To induce DTC to accept the Preferred Securities as eligible for deposit at
DTC, and to act in accordance with DTC's rules with respect to the Preferred
Securities, the Issuer, the Transfer Agent and Registrar and DTC agree among
each other as follows:
1. Prior to the closing of the sale of the Preferred Securities to the
Underwriters, which is expected to occur on or about --------, ----, there shall
be deposited with or on behalf of DTC one or more global certificates
(individually and collectively, the "Global Certificate") registered in the name
of DTC's Preferred Securities nominee, Cede & Co., representing an aggregate of
Preferred Securities and bearing the following legend:
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
B-1
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
2. The Amended and Restated Trust Agreement of the Issuer provides for the
voting by holders of the Preferred Securities under certain limited
circumstances. The Issuer shall establish a record date for such purposes and
shall, to the extent possible, give DTC notice of such record date not less than
15 calendar days in advance of such record date.
3. In the event of a stock split, conversion, recapitalization,
reorganization or any other similar transaction resulting in the cancellation of
all or any part of the Preferred Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DTC a notice of such event at least 5
business days prior to the effective date of such event.
4. In the event of distribution on, or an offering or issuance of rights
with respect to, the Preferred Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DTC a notice specifying: (a) the amount
of and conditions, if any, applicable to the payment of any such distribution or
any such offering or issuance of rights; (b) any applicable expiration or
deadline date, or any date by which any action on the part of the holders of
Preferred Securities is required; and (c) the date any required notice is to be
mailed by or on behalf of the Issuer to holders of Preferred Securities or
published by or on behalf of the Issuer (whether by mail or publication, the
"Publication Date"). Such notice shall be sent to DTC by a secure means (e.g.,
legible telecopy, registered or certified mail, overnight delivery) in a timely
manner designed to assure that such notice is in DTC's possession no later than
the close of business on the business day before the Publication Date. The
Issuer or the Transfer Agent and Registrar will forward such notice either in a
separate secure transmission for each CUSIP number or in a secure transmission
of multiple CUSIP numbers (if applicable) that includes a manifest or list of
each CUSIP number submitted in that transmission. (The party sending such notice
shall have a method to verify subsequently the use of such means and the
timeliness of such notice.) The Publication Date shall be not less than 30
calendar days nor more than 60 calendar days prior to the payment of any such
distribution or any such offering or issuance of rights with respect to the
Preferred Securities. After establishing the amount of payment to be made on the
Preferred Securities, the Issuer or the Transfer Agent and Registrar will notify
DTC's Dividend Department of such payment 5 business days prior to payment date.
Notices to DTC's Dividend Department by telecopy shall be sent to (212)
709-1723. Such notices by mail or by any other means shall be sent to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
The Issuer or the Transfer Agent and Registrar shall confirm DTC's receipt
of such telecopy by telephoning the Dividend Department at (212) 709-1270.
5. In the event of a redemption by the Issuer of the Preferred Securities,
notice specifying the terms of the redemption and the Publication Date of such
notice shall be sent by the Issuer or the Transfer Agent and Registrar to DTC
B-2
not less than 30 calendar days prior to such event by a secure means in the
manner set forth in paragraph 4. Such redemption notice shall be sent to DTC's
Call Notification Department at (516) 227-4164 or (516) 227-4190, and receipt of
such notice shall be confirmed by telephoning (516) 227-4070. Notice by mail or
by any other means shall be sent to:
Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530-4719
6. In the event of any invitation to tender the Preferred Securities,
notice specifying the terms of the tender and the Publication Date of such
notice shall be sent by the Issuer or the Transfer Agent and Registrar to DTC by
a secure means and in a timely manner as described in paragraph 4. Notices to
DTC pursuant to this paragraph and notices of other corporate actions (including
mandatory tenders, exchanges and capital changes) shall be sent, unless
notification to another department is expressly provided for herein, by telecopy
to DTC's Reorganization Department at (212) 709-1093 or (212) 709-1094 and
receipt of such notice shall be confirmed by telephoning (212) 709-6884, or by
mail or any other means to:
Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
7. All notices and payment advices sent to DTC shall contain the CUSIP
number or numbers of the Preferred Securities and the accompanying designation
of the Preferred Securities, which, as of the date of this letter, is "[TITLE OF
PREFERRED SECURITIES]."
8. Distribution payments or other cash payments with respect to the
Preferred Securities evidenced by the Global Certificate shall be received by
Cede & Co., as nominee of DTC, or its registered assigns in [ ] funds on each
payment date (or in accordance with existing arrangements between the Issuer or
the Transfer Agent and Registrar and DTC). Such payments shall be made payable
to the order of Cede & Co., and shall be addressed as follows:
NDFS Redemption Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
9. DTC may by prior written notice direct the Issuer and the Transfer Agent
and Registrar to use any other telecopy number or address of DTC as the number
or address to which notices or payments may be sent.
10. In the event of a conversion, redemption, or any other similar
transaction (e.g., tender made and accepted in response to the Issuer's or the
Transfer Agent and Registrar's invitation) necessitating a reduction in the
B-3
aggregate number of Preferred Securities outstanding evidenced by Global
Certificates, DTC, in its discretion: (a) may request the Issuer or the Transfer
Agent and Registrar to issue and countersign a new Global Certificate; or (b)
may make an appropriate notation on the Global Certificate indicating the date
and amount of such reduction.
11. DTC may discontinue its services as a securities Depository with
respect to the Preferred Securities at any time by giving at least 90 days'
prior written notice to the Issuer and the Transfer Agent and Registrar (at
which time DTC will confirm with the Issuer or the Transfer Agent and Registrar
the aggregate number of Preferred Securities deposited with it) and discharging
its responsibilities with respect thereto under applicable law. Under such
circumstances, the Issuer may determine to make alternative arrangements for
book-entry settlement for the Preferred Securities, make available one or more
separate global certificates evidencing Preferred Securities to any Participant
having Preferred Securities credited to its DTC account, or issue definitive
Preferred Securities to the beneficial holders thereof, and in any such case,
DTC agrees to cooperate fully with the Issuer and the Transfer Agent and
Registrar, and to return the Global Certificate, duly endorsed for transfer as
directed by the Issuer or the Transfer Agent and Registrar, together with any
other documents of transfer reasonably requested by the Issuer or the Transfer
Agent and Registrar.
12. In the event that the Issuer determines that beneficial owners of
Preferred Securities shall be able to obtain definitive Preferred Securities,
the Issuer or the Transfer Agent and Registrar shall notify DTC of the
availability of certificates. In such event, the Issuer or the Transfer Agent
and Registrar shall issue, transfer and exchange certificates in appropriate
amounts, as required by DTC and others, and DTC agrees to cooperate fully with
the Issuer and the Transfer Agent and Registrar and to return the Global
Certificate, duly endorsed for transfer as directed by the Issuer or the
Transfer Agent and Registrar, together with any other documents of transfer
reasonably requested by the Issuer or the Transfer Agent and Registrar.
13. This letter may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument. Nothing
herein shall be deemed to require the Transfer Agent and Registrar to advance
funds on behalf of Covanta Capital Trust [ ].
Very truly yours,
Covanta Capital Trust [ ] (As Issuer)
By:
--------------------------------------
Name:
Title:
B-4
[ ]
By:
---------------------------------------
Administrative Trustee
[ ]
By:
---------------------------------------
Administrative Trustee
[ ]
(As Transfer Agent and Registrar)
By:
---------------------------------------
Name:
Title:
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
- -------------------------------
By:
Authorized Officer
B-5
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS DESCRIBED
IN THE TRUST AGREEMENT (AS DEFINED BELOW)
Certificate Number Number Of Common Securities
C-1
Certificate Evidencing Common Securities
of
COVANTA CAPITAL TRUST [ ]
---% Common Securities
(Liquidation Amount $[ ] Per Common Security)
Covanta Capital Trust [ ], a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that Covanta
Energy Corporation (the "Holder") is the registered owner of (---) common
securities of the Trust representing undivided beneficial ownership interests in
the assets of the Trust and designated the ----% Common Securities (liquidation
amount $[ ] per Common Security) (the "Common Securities"). To the extent set
forth in Section 5.10 of the Trust Agreement (as defined below) the Common
Securities are not transferable and any attempted transfer hereof shall be void.
The designations, rights, privileges, restrictions, preferences and other terms
and provisions of the Common Securities are set forth in, and this certificate
and the Common Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust dated as of --------, ----, as the same may be
amended from time to time (the "Trust Agreement") including the designation of
the terms of the Common Securities as set forth therein. The Trust will furnish
a copy of the Trust Agreement to the Holder without charge upon written request
to the Trust at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
In Witness Whereof, one of the Administrative Trustees of the Trust has
executed this certificate this ---- day of --------, ----.
COVANTA CAPITAL TRUST [ ]
By:
-------------------------------
Name:
Administrative Trustee
C-1
EXHIBIT D
If the Preferred Security is to be a Global Certificate Insert--This
Preferred Security is a Global Certificate within the meaning of the Trust
Agreement hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depository") or a nominee of the Depository. This
Preferred Security is exchangeable for Preferred Securities registered in the
name of a person other than the Depository or its nominee only in the limited
circumstances described in the Trust Agreement and no transfer of this Preferred
Security (other than a transfer of this Preferred Security as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository) may be registered except in
limited circumstances.
Unless this Preferred Security is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York) to Covanta Capital
Trust [ ] or its agent for registration of transfer, exchange or payment, and
any Preferred Security issued is registered in the name of Cede & Co. or such
other name as requested by an authorized representative of The Depository Trust
Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Certificate Number Number Of Preferred Securities
P- ----- Cusip No.-----
Certificate Evidencing Preferred Securities
of
COVANTA CAPITAL TRUST [ ]
[DESIGNATION OF PREFERRED SECURITIES]
(Liquidation Amount $[ ] Per Preferred Security)
Covanta Capital Trust [ ], a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that
- ------------------- (the "Holder") is the registered owner of (---) preferred
securities of the Trust representing an undivided beneficial ownership interest
in the assets of the Trust and designated the [DESIGNATION OF PREFERRED
SECURITIES] (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer as provided in Section 5.4 of the Trust Agreement (as
defined below). The designations, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities are set forth in, and
this certificate and the Preferred Securities represented hereby are issued and
shall in all respects be subject to the terms and provisions of, the Amended and
Restated Trust Agreement of the Trust dated as of --------, ----, as the same
may be amended from time to time (the "Trust Agreement") including the
designation of the terms of Preferred Securities as set forth therein. The
Holder is entitled to the benefits of the Guarantee Agreement entered into by
D-1
Covanta Capital Trust [ ], a Delaware corporation, and [ ], as guarantee
trustee, dated as of ----------, 200--, as the same may be amended from time to
time (the "Guarantee"), to the extent provided therein. The Trust will furnish a
copy of the Trust Agreement and the Guarantee to the Holder without charge upon
written request to the Trust at its principal place of business or registered
office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
In Witness Whereof, one of the Administrative Trustees of the Trust has
executed this certificate this --- day of ----------, ----.
COVANTA CAPITAL TRUST [ ]
By:
-----------------------------------
Name:
Administrative Trustee
D-2
ASSIGNMENT
For Value Received, the undersigned assigns and transfers this Preferred
Security to:
- --------------------------------------------------
- --------------------------------------------------
- --------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------
- --------------------------------------------------
- --------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- --------------------------------------------------
- --------------------------------------------------
- --------------------------------------------------
agent to transfer this Preferred Security 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 Preferred
Security Certificate)
- --------------------------------------------------
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
D-3