Exhibit 4.3
__________________________________________
AMENDED AND RESTATED DECLARATION
OF TRUST
of
Sempra Energy Capital Trust I
Dated as of February __, 2000
__________________________________________
SEMPRA ENERGY CAPITAL TRUST I
Certain Sections of this Declaration relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture
Act Section Declaration Section
- ---------------- ----------------------------------
(.)310 (a)(1).................................................................. 9.4
(a)(2).................................................................. 9.4
(a)(3).................................................................. 9.6
(a)(4).................................................................. 3.6
(b)..................................................................... 9.5
(.)311 (a)..................................................................... 9.10
(b)..................................................................... 9.10
(.)312 (a)..................................................................... 2.2
(b)..................................................................... 2.2
(c)..................................................................... 2.2
(.)313 (a)..................................................................... 2.3(a)
(a)(4).................................................................. 2.3(b)
(b)..................................................................... 2.3(b)
(c)..................................................................... 11.8
(d)..................................................................... 2.3(c)
(.)314 (a)..................................................................... 2.4
(b)..................................................................... Not Applicable
(c)(1).................................................................. 2.5
(c)(2).................................................................. 2.5
(c)(3).................................................................. Not Applicable
(d)..................................................................... Not Applicable
(e)..................................................................... 2.5
(.)315 (a)..................................................................... 3.6
(b)..................................................................... 2.7, 11.8
(c)..................................................................... 3.6
(d)..................................................................... 3.6
(e)..................................................................... Not Applicable
(.)316 (a)..................................................................... Not Applicable
(a)(1)(A)............................................................... Not Applicable
(a)(1)(B)............................................................... Not Applicable
(a)(2).................................................................. Not Applicable
(b)..................................................................... 2.6
(c)..................................................................... 7.7
(.)317 (a)(1).................................................................. Not Applicable
(a)(2).................................................................. Not Applicable
(b)..................................................................... 6.8
(.)318 (a)..................................................................... 2.1
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed
to be a part of this Declaration.
AMENDED AND RESTATED DECLARATION
OF TRUST
OF
SEMPRA ENERGY CAPITAL TRUST I
Dated as of February 23, 2000
THIS AMENDED AND RESTATED DECLARATION OF TRUST, dated and effective as of
February 23, 2000 (this "Declaration"), by and among the undersigned trustees
(together with all other Persons from time to time duly appointed and serving as
trustees in accordance with the provisions of this Declaration, the "Trustees"),
Sempra Energy, a California corporation, as trust sponsor (the "Sponsor"), and
by the holders, from time to time, of the securities representing undivided
beneficial interests in the assets of the Sempra Energy Capital Trust I (the
"Trust") to be issued pursuant to this Declaration;
WHEREAS, certain of the Trustees and the Sponsor established the Trust
under the Business Trust Act (as defined herein) pursuant to a Declaration of
Trust, dated as of April 22, 1999 (the "Original Declaration") and a Certificate
of Trust filed with the Secretary of State of Delaware on April 22, 1999, for
the sole purpose of issuing and selling certain securities representing
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in certain Subordinated Debt Securities (as defined herein) of
the Subordinated Debt Securities Issuer (as defined herein);
WHEREAS, the Sponsor and the Trustees desire to amend and restate the
Original Declaration 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 (as defined herein), and (iii) the acquisition by the
Trust from the Sponsor of all of the right, title and interest in the
Subordinated Debt Securities (as defined herein); provided, however, that none
of the amendments hereto are intended to amend any of the provisions included in
the Declaration that are required be included in an indenture pursuant to the
Trust Indenture Act.
NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a business trust under the Business Trust Act and that this
Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I.
INTERPRETATION AND DEFINITIONS
Section 1.1 Definitions
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to this
Amended and Restated Declaration of Trust, as modified, supplemented or amended
from time to time, including (i) all exhibits hereto and (ii) for all purposes
of this Declaration 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 Declaration and any such modification, amendment or supplement,
respectively;
(d) all references in this Declaration to "Articles" and "Sections" and
"Exhibits" are to Articles and Sections of and Exhibits to this Declaration
unless otherwise specified;
(e) the words "herein," "hereof," and "hereunder" and other words of
similar import refer to this Declaration as a whole and not to any particular
Article, Section or subdivision;
(f) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration; and
(g) a reference to the singular includes the plural and vice versa.
In addition, the following terms shall have the meanings set forth below.
"Act" has the meaning specified in Section 7.8.
"Additional Amount" means, with respect to Securities of a given
Liquidation Amount and/or a given period, the amount of Additional Interest (as
defined in the Officers' Certificate establishing the terms of the Subordinated
Debt Securities pursuant to Section 303 of the Indenture) paid by the Sponsor on
a Like Amount of Subordinated Debt Securities for such period.
"Additional Sums" has the meaning specified in Section ___ of the Officers'
Certificate establishing the terms of the Subordinated Debt Securities pursuant
to Section 303 of the Indenture.
"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
S-2
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" means The Bank of New York, a New York banking corporation, other
than in its capacity as Property Trustee or a Subordinated Debt Securities
Trustee.
"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 11.9.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Sponsor to have been duly adopted by the
Sponsor's Board of Directors, or such committee of the Board of Directors or
officers of the Sponsor to which authority to act on behalf of the Board of
Directors has been delegated, and to be in full force and effect on the date of
such certification, and delivered to the Trustees.
"Book-Entry Preferred Securities Certificates" means a beneficial interest
in the Preferred Securities Certificates, ownership and transfers of which shall
be evidenced through book entries by a Clearing Agency as described in Section
6.10.
"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 or executive order to remain closed, or (c) a day on which the Property
Trustee's Corporate Trust Office or the Corporate Trust Office of the
Subordinated Debt Securities Trustee is closed for business.
S-3
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. C. Sections 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Certificate" means a Common Security Certificate or a Preferred Security
Certificate.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depositary for the
Preferred Securities and in whose name or in the name of a nominee of that
organization, the Preferred Securities shall be registered in global form and
which shall undertake to effect book entry transfers and pledges of the
Preferred Securities. The Depository Trust Company 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 the Clearing Agency
effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means February 23, 2000.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor legislation.
"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 Securities Guarantee" means the guarantee agreement dated as of
February 23, 2000 of the Sponsor in respect of the Common Securities.
"Common Security" means an undivided beneficial interest in the assets of
the Trust, having a Liquidation Amount of $25 and having the rights provided
therefor in this Declaration, including the right to receive Distributions and a
Liquidation Distribution as provided herein.
"Common Securityholder" means the Holder from time to time of the Common
Securities.
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Annex II to Exhibit A.
"Corporate Trust Office" means (i) when used with respect to the Property
Trustee, the principal office of the Property Trustee located at 101 Barclay
Street, Floor 21 West, New York, New York 10286, and (ii) when used with
respect to the Subordinated Debt Securities Trustee, the principal office of the
Subordinated Debt Securities Trustee located at 101 Barclay Street, Floor 21
West, New York, New York 10286.
S-4
"Definitive Preferred Securities Certificates" means either or both (as the
context requires) of (a) Preferred Securities Certificates issued as Book-Entry
Preferred Securities Certificates as provided in Section 6.10(a) and (b)
Preferred Securities Certificates issued in certificated, fully registered form
as provided in Section 6.12.
"Delaware Trustee" means The Bank of New York (Delaware), a Delaware
banking corporation, solely in its capacity as Delaware Trustee of the Trust and
not in its individual capacity, or its successor in interest in such capacity,
or any successor trustee appointed as herein provided.
"Sponsor" has the meaning specified in the preamble to this Declaration.
"Direct Action" has the meaning set forth in Section 3.6(c).
"Distribution" means a distribution payable to Securityholders in
accordance with Section 5.1.
"Distribution Date" has the meaning specified in Section 5.1(a).
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the occurrence of an Indenture Event of Default; or
(b) default by the Trust in the payment of any Distribution when it becomes
due and payable, and continuation of such default for a period of 30 days,
provided that no Deferral Period (as defined in the Officers' Certificate
establishing the Subordinated Debt Securities pursuant to Section 303 of the
Indenture) is continuing; or
(c) default by the Trust in the payment of any Redemption Price of any
Security when it becomes due and payable; or
(d) default in the performance, or breach, in any material respect, of any
provision of this Declaration (other than a covenant or warranty a default in
the performance or breach of which is dealt with in clause (b) or (c) above) and
continuation of such default or breach for a period of 90 days after there has
been given, by registered or certified mail, to the defaulting Trustee or
Trustees by the Holders of at least 25% in aggregate Liquidation Amount of the
Outstanding Preferred Securities a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or
(e) the occurrence of a Bankruptcy Event with respect to the Property
Trustee and the failure by the Sponsor to appoint a Successor Property Trustee
within 60 days thereof.
S-5
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"Guarantee" means the Guarantee Agreement executed and delivered by the
Guarantor and The Bank of New York, a New York banking corporation, as trustee,
contemporaneously with the execution and delivery of this Declaration, for the
benefit of the holders of the Preferred Securities, as amended from time to
time.
"Guarantor" means Sempra Energy, a California corporation, and its
successors and assigns.
"Indemnified Person" has the meaning specified in Section 9.3(c).
"Indenture" means the Indenture dated as of February 23, 2000 among the
Subordinated Debt Securities Issuer and The Bank of New York, as trustee, as
supplemented by an Officers' Certificate (as defined in the Indenture) dated as
of February 23, 2000 pursuant to Section 301 of the Indenture.
"Indenture Event of Default" means an "Event of Default," as defined in the
Indenture, with respect to the Subordinated Debt Securities.
"Indenture Redemption Date" means, with respect to any Subordinated Debt
Securities to be redeemed under the Indenture, the date fixed for redemption
under the Indenture.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Legal Action" means any action to bring or defend, pay, collect,
compromise, arbitrate, resort to legal action, or otherwise adjust claims or
demands of or against the Trust.
"Like Amount" means (a) with respect to a redemption of Securities,
Securities having an aggregate Liquidation Amount equal to the aggregate
principal amount of Subordinated Debt Securities to be contemporaneously
redeemed or repaid in accordance with the Indenture the proceeds of which will
be used to pay the Redemption Price of such Securities, and (b) with respect to
a distribution of Subordinated Debt Securities to Securityholders in connection
with a dissolution or liquidation of the Trust, Subordinated Debt Securities
having an aggregate principal amount equal to the aggregate Liquidation Amount
of the Securities of the Holder to whom such Subordinated Debt Securities are
distributed.
"Liquidation Amount" means the stated amount of $25 per Security.
S-6
"Liquidation Date" means the date on which Subordinated Debt Securities are
to be distributed to Securityholders in connection with a dissolution and
liquidation of the Trust pursuant to Section 10.4(a).
"Liquidation Distribution" has the meaning specified in Section 10.4(d).
"Majority in Liquidation Amount of the Securities" means, except as
provided in the terms of the Preferred Securities and by the Trust Indenture
Act, Holder(s) of Preferred Securities or Common Securities voting together as a
single class or, as the context may require, Holder(s) of Preferred Securities
or Common Securities voting separately as a class, who vote Securities of a
relevant class and the aggregate liquidation amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus accrued and
unpaid Distributions to the date upon which the voting percentages are
determined) of the Securities voted by such Securityholders represents more than
50% of the above stated aggregate liquidation amount of all Securities of such
class.
"Officer's Certificate" means a certificate signed by any one of the
Chairman of the Board, Chief Executive Officer, President, a Vice President, the
Treasurer, an Associate Treasurer, an Assistant Treasurer, the Controller, the
Secretary or an Assistant Secretary, of the Sponsor, and delivered to the
appropriate Trustee. The officer signing an Officer's Certificate given pursuant
to Section 2.14 shall be the principal executive, financial or accounting
officer of the Sponsor. Any Officer's Certificate delivered with respect to
compliance with a condition or covenant provided for in this Declaration shall
include:
(a) a statement that the officer signing the Officer's 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 such officer in rendering the Officer's Certificate;
(c) a statement that 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 such officer, such
condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Trust, the Property Trustee or the Sponsor, and who shall be reasonably
acceptable to the Property Trustee.
"Original Declaration" has the meaning specified in the recitals to this
Declaration.
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore executed and delivered under this
Declaration, except:
S-7
(a) Securities theretofore canceled by the Property Trustee or delivered to
the Property Trustee for cancellation;
(b) 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 Securities; provided that, if such Securities are
to be redeemed, notice of such redemption has been duly given pursuant to this
Declaration; and
(c) 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
6.4, 6.5, 6.10 and 6.12; 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 (i) 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 (ii) the foregoing
proviso 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 Regular 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 6.8 and shall initially be the Bank.
"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 Subordinated Debt Securities will be held and from which the Property
Trustee, through the Paying Agent, shall make payments to the Securityholders in
accordance with Sections 5.1 and 5.2.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Security" means an undivided beneficial interest in the assets
of the Trust, having a Liquidation Amount of $25 and having the rights provided
therefor in this Declaration, including the right to receive Distributions and a
Liquidation Distribution as provided herein.
S-8
"Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Annex I to Exhibit A.
"Property Trustee" means The Bank of New York, a New York banking
corporation, solely in its capacity as Property Trustee of the Trust 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 Declaration; provided
that each Indenture Redemption Date and the Stated Maturity (as defined in the
Indenture) of the Subordinated Debt Securities shall be a Redemption Date for a
Like Amount of Securities.
"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, allocated on a pro rata basis (based on
Liquidation Amounts) among the Securities.
"Regular Trustees" means each of ___________, ___________ and ___________,
solely in such Person's capacity as Regular Trustee of the Trust formed and
continued hereunder and not in such Person's individual capacity, or such
Regular Trustee's successor in interest in such capacity, or any successor
trustee appointed as herein provided.
"Relevant Trustee" shall have the meaning specified in Section 8.10.
"Responsible Officer" means, with respect to the Property Trustee, any
Vice-President, any Assistant Vice-President, any Assistant Secretary, any
Assistant Treasurer, any Trust Officer or Assistant Trust Officer or any other
officer of the Property Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor legislation.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 6.4.
"Securityholder" or "Holder" means a Person in whose name a Security or
Securities is registered in the Securities Register, any such Person being a
beneficial owner within the meaning of the Business Trust Act; provided,
however, that in determining whether the Holders of the requisite amount of
Preferred Securities have voted on any matter provided for in this Declaration,
then for the purpose of any such determination, so long as Definitive Preferred
Securities Certificates have not been issued, the term Securityholders or
Holders as used herein shall refer to the Owners.
S-9
"Sponsor" means Sempra Energy, a California corporation, or any permitted
successor thereof under the Indenture, in its capacity as sponsor of the Trust.
"Subordinated Debt Securities" means the 8.90% Subordinated Deferrable
Interest Notes, Series A, due February 23, 2030 to be issued by the Subordinated
Debt Securities Issuer under the Indenture and to be held by the Property
Trustee pursuant to Section 3.14. A specimen certificate for such series of
Subordinated Debt Securities is attached hereto as Exhibit B.
"Subordinated Debt Securities Issuer" means Sempra Energy, a California
corporation.
"Subordinated Debt Securities Trustee" means The Bank of New York, as
trustee under the Indenture until a successor is appointed thereunder and
thereafter means such successor trustee.
"Successor Property Trustee" means a successor Trustee possessing the
qualifications to act as Property Trustee under Section 9.4.
"Tax Event" means the receipt by the Trust of an Opinion of Counsel from
counsel experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of issuance of
the Preferred Securities under this Declaration, there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days after the
date of such Opinion of Counsel, subject to United States federal income tax
with respect to income received or accrued on the Subordinated Debt Securities,
(ii) interest payable by the Sponsor on the Subordinated Debt Securities is not,
or within 90 days after the date of such Opinion of Counsel, will not be,
deductible by the Sponsor, in whole or in part, for United States federal income
tax purposes or (iii) the Trust is, or will be within 90 days after the date of
such Opinion of Counsel, subject to more than a de minimis amount of other
taxes, duties, assessments or other governmental charges.
"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 Subordinated 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 trusts of this
Declaration.
"Trustee" or "Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person shall continue in office in accordance with
the terms hereof, and all other Persons who may from time to time be duly
appointed, qualified and serving as Trustees in
S-10
accordance with the provisions ereof, and references herein to a Trustee or the
Trustees shall refer to such Person or Persons solely in their capacity as
trustees hereunder.
"Underwriting Agreement" means the Pricing Agreement (including the
Underwriting Agreement incorporated by reference therein), dated February 17,
2000, among the Trust, the Sponsor and the underwriters named therein.
"25% in aggregate Liquidation Amount of the Securities" means, except as
provided in the terms of the Preferred Securities and by the Trust Indenture
Act, Holder(s) of Securities voting together as a single class or, as the
context may require, Holder(s) of Preferred Securities or Common Securities,
voting separately as a class, who vote Securities of a relevant class and the
Liquidation Amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of the Securities
voted by such Holders represents 25% of the above stated aggregate Liquidation
Amount of all Securities of such class.
ARTICLE II.
TRUST INDENTURE ACT
Section 2.1 TRUST INDENTURE ACT; APPLICATION
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to the extent
applicable, be governed by such provisions;
(b) the Property Trustee shall be the only Trustee which is a trustee for
the purposes of the Trust Indenture Act;
(c) if and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control; and
(d) the application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
Section 2.2 LISTS OF SECURITYHOLDERS
(a) Each of the Sponsor and the Regular Trustees, on behalf of the Trust,
shall provide the Property Trustee (i) not later than 15 days after each of
________, ________, _______ and ________ (each such date a "Regular Record
Date") of each year a list, in such form as the Property Trustee may reasonably
require, containing all the information in the possession or control of the
Sponsor, or any of its Paying Agents other than the Property Trustee, as to the
names and addresses of the Securityholders ("List of Holders") as of the
preceding respective Regular Record Date, and (ii) at such other times as the
Property Trustee may request
S-11
in writing, within 30 days after the receipt by the rust of any such request, a
list of similar form and content as of a date not more than 15 days prior to the
time such list is furnished. The Property Trustee shall preserve, in as current
a form as is reasonably practicable, all information contained in Lists of
Holders given to it or which it receives in its capacity as Paying Agent (if
acting in such capacity), provided that the Property Trustee may destroy any
List of Holders previously given to it on receipt of a new List of Holders; an d
(b) the Property Trustee shall comply with its obligations under Sections
311(a), 311(b) and 312(b) of the Trust Indenture Act.
Section 2.3 REPORTS BY THE PROPERTY TRUSTEE
(a) Within 60 days after February 15 of each year, commencing February 15,
2001, the Property Trustee shall provide to the Securityholders such reports as
are required by Section 313 of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The Property
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
(b) In addition, the Property Trustee shall transmit to all Securityholders
in accordance with Section 11.8, and to the Sponsor, a brief report dated as of
such May 15 with respect to:
(i) its eligibility under Section 9.4 or, in lieu thereof, if to the
best of its knowledge it has continued to be eligible under said Section, a
written statement to such effect; and
(ii) any change in the property and funds in its possession as
Property Trustee since the date of its last report and any action taken by
the Property Trustee in the performance of its duties hereunder which it
has not previously reported and which in its opinion materially affects the
Securities.
(c) 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 Securities are listed or traded
(information regarding each such listing to be provided to the Property Trustee
by the Sponsor), with the Commission and with the Sponsor.
Section 2.4 PERIODIC REPORTS TO THE PROPERTY TRUSTEE
Each of the Sponsor and the Regular Trustees, on behalf of the Trust, shall
provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
S-12
Section 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT
Each of the Sponsor and the Regular Trustees, on behalf of the Trust, shall
provide to the Property Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Declaration which relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section 314(c)(1) of
the Trust Indenture Act may be given in the form of an Officers' Certificate.
Section 2.6 RIGHTS OF SECURITYHOLDERS; EVENTS OF DEFAULT; WAIVER
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 3.14, and
the Securityholders shall not have any right or title therein other than the
undivided beneficial interest in the assets of the Trust conferred by their
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
Securities shall be personal property giving only the rights specifically set
forth therein and in this Declaration. The 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 Securityholders, 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
Indenture Event of Default, the Subordinated Debt Securities Trustee fails or
the holders of not less than 25% in principal amount of the outstanding
Subordinated Debt Securities fail to declare the principal of all of the
Subordinated 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
Subordinated Debt Securities Trustee; and upon any such declaration such
principal amount of and the accrued interest on all of the Subordinated Debt
Securities shall become immediately due and payable, provided that the payment
of principal and interest on such Subordinated 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
Subordinated Debt Securities has been made and before a judgment or decree for
payment of the money due has been obtained by the Subordinated Debt Securities
Trustee as in the Indenture provided, the Holders of a majority in aggregate
Liquidation Amount of the Outstanding Preferred Securities, by written notice to
the Property Trustee, the Sponsor and the Subordinated Debt Securities Trustee,
may rescind and annul such declaration and its consequences if:
(i) the Sponsor has paid or deposited with the Subordinated Debt
Securities Trustee a sum sufficient to pay
(A) all overdue interest on all of the Subordinated Debt
Securities which has become due otherwise than by such declaration of
acceleration;
S-13
(B) the principal of (and premium, if any, on) any Subordinated
Debt Securities which have become due otherwise than by such
declaration of acceleration and any interest thereon at the rate or
rates prescribed therefor in the Subordinated Debt Securities or, if
no such rate or rates are so provided, at the rate of interest borne
by the Subordinated Debt Securities;
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest which has become due otherwise than by
such declaration of acceleration at the rate or rates prescribed
therefor in the Subordinated Debt Securities or, if no such rate or
rates are so provided, at the rate of interest borne by the
Subordinated Debt Securities; and
(D) all sums paid or advanced by the Subordinated Debt Securities
Trustee under the Indenture and the reasonable compensation, expenses,
disbursements and advances of the Subordinated Debt Securities Trustee
and the Property Trustee, their agents and counsel and any amounts due
to the Subordinated Debt Securities Trustee under Section 607 of the
Indenture; and
(ii) all Events of Default with respect to the Subordinated Debt
Securities, other than the non-payment of the principal of the Subordinated
Debt Securities which has become due solely by such acceleration, have been
cured or waived as provided in Section 513 of the Indenture.
The Holders of a majority in aggregate Liquidation Amount of the
Outstanding Preferred Securities may, on behalf of the Holders of all the
Outstanding Preferred Securities, waive any past default under the Indenture,
except a default in the payment of principal or interest on the Subordinated
Debt Securities (unless such default has been cured and a sum sufficient to pay
all matured installments of interest and principal and accrued and unpaid
interest, if any, due otherwise than by acceleration has been deposited with the
Subordinated Debt Securities Trustee) or 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 Subordinated Debt Security. No such
rescission shall affect any subsequent default or impair any right consequent
thereon.
Upon receipt by the Property Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, by Holders of the Preferred
Securities all or part of which is represented by Book-Entry Preferred
Securities Certificates, a record date shall be established for determining
Holders of Outstanding Preferred Securities entitled to join in such notice,
which record date shall be at the close of business on the day the Property
Trustee receives such notice. The Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to join in such
notice, whether or not such Holders remain Holders after such record date;
provided, that, unless such declaration of acceleration, or rescission and
annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having joined in such notice prior to the day which is 90
days after such record date, such notice of declaration of acceleration, or
rescission and annulment, as the case may be, shall automatically and without
further action by any Holder be canceled and of no further effect. Nothing in
this paragraph shall
S-14
prevent a Holder, or a proxy of a Holder, from giving, after expiration of such
90-day period, a new written notice of declaration of acceleration, or
rescission and annulment thereof, as the case may be, that is identical to a
written notice which has been canceled pursuant to the proviso to the preceding
sentence, in which event a new record date shall be established pursuant to the
provisions of this Section 2.6(b).
(c) A waiver of any Event of Default under the Indenture by the Property
Trustee at the direction of the Holders of the Preferred Securities constitutes
a waiver of the corresponding Event of Default with respect to the Preferred
Securities under this Declaration. Any waiver of an Event of Default under the
Indenture by the Property Trustee at the direction of the Holders of the
Preferred Securities shall also be deemed to constitute a waiver by the Holders
of the Common Securities of the corresponding Event of Default under this
Declaration with respect to the Common Securities for all purposes of this
Declaration without further act, vote or consent of the Holders of the Common
Securities.
(d) The foregoing provisions of Sections 2.6(b) and (c) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.
Section 2.7 EVENT OF DEFAULT; NOTICE
The Property Trustee shall, within 90 days after the occurrence of an Event
of Default with respect to the Securities known to the Property Trustee,
transmit by mail, first class postage prepaid, to the Securityholders, the
Regular Trustees and the Sponsor, notices of all such defaults unless such
defaults have been cured or waived before the giving of such notice (the term
"defaults" for the purposes of this Section 2.7 being hereby defined to be an
Event of Default as, not including any periods of grace provided for herein or
in the Indenture and irrespective of the giving of any notice provided herein or
in the Indenture); provided, that, except for a default in the payment of
principal of (or premium, if any) or interest on any of the Subordinated Debt
Securities or Preferred Securities, 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 and/or Responsible Officers, of the
Property Trustee in good faith determine that the withholding of such notice is
in the interests of the Securityholders.
ARTICLE III.
ESTABLISHMENT OF THE TRUST
Section 3.1 NAME
The Trust is named "Sempra Energy Capital Trust I," as such name may be
modified from time to time by the Regular Trustees following written notice to
the Securityholders. The Trust's activities may be conducted under the name of
the Trust or any other name deemed advisable by the Regular Trustees.
S-15
Section 3.2 OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF BUSINESS
The address of the Delaware Trustee in the State of Delaware is White Clay
Center, Route 273, Newark, Delaware 19711, or such other address in the State
of Delaware as the Delaware Trustee may designate by written notice to the
Sponsor. The address of the principal office of the Trust is c/o Sempra Energy,
101 Ash Street, San Diego, California, 92101. On ten (10) Business Days written
notice to the Property Trustee and Securityholders, the Regular Trustees may
designate another principal office.
Section 3.3 DECLARATION OF TRUST; PURPOSE
The exclusive purposes and functions of the Trust are (i) to issue and sell
Securities and use the proceeds from such sale to acquire the Subordinated Debt
Securities, (ii) to distribute the cash payments it receives on the Subordinated
Debt Securities it owns to the Securityholders, and (iii) to engage in only
those activities necessary, appropriate, 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 Regular
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
Trustees set forth herein. 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 3.4 AUTHORITY OF TRUSTEES
The Trustees shall conduct the affairs of the Trust in accordance with the
terms of this Declaration. Subject to the limitations set forth in Section 3.8,
and in accordance with the following Sections 3.5 and 3.6, the Trustees shall
have the authority to enter into all transactions and agreements determined by
the Trustees to be appropriate in exercising the authority, express or implied,
otherwise granted to the Trustees under this Declaration, and to perform all
acts in furtherance thereof.
Section 3.5 POWER AND AUTHORITY OF REGULAR TRUSTEES
(a) Without limiting Section 3.4, each Regular Trustee, acting singly or
collectively, shall have the power and authority to act on behalf of the Trust,
including, without limitation, with respect to the following matters:
(i) the issuance and sale of the Securities;
(ii) to cause the Trust to enter into, and to execute, deliver
and perform on behalf of the Trust and such other agreements as may be
necessary or desirable in connection with the purposes and function of
the Trust;
S-16
(iii) 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 Declaration
as a trust indenture under the Trust Indenture Act;
(iv) 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;
(v) assisting in the sending of notices (other than notices of
default) and other information regarding the Securities and the
Subordinated Debt Securities to the Securityholders in accordance with
this Declaration;
(vi) consenting to the appointment of a Paying Agent in
accordance with this Declaration;
(vii) execution of the Securities on behalf of the Trust in
accordance with this Declaration;
(viii) execution and delivery of closing certificates pursuant
to the Underwriting Agreement and application for a taxpayer
identification number for the Trust;
(ix) unless otherwise determined by the Sponsor, the Property
Trustee or the Holders of Preferred Securities representing more than
50% of the aggregate Liquidation Amount of the Outstanding Preferred
Securities, or as otherwise required by the Delaware Business Trust
Act or the Trust Indenture Act, to execute on behalf of the Trust
(either acting alone or together with any or all of the Regular
Trustees) any documents that the Regular Trustees have the power to
execute pursuant to this Declaration; and
(x) 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 Declaration for the benefit of the
Securityholders (without consideration of the effect of any such
action on any particular Securityholder).
(b) Notwithstanding anything herein to the contrary, the Trustees are
authorized, and the Regular Trustees are directed, to conduct the affairs of the
Trust and to operate the Trust so that (i) the Trust will not be deemed to be an
"investment company" required to be registered under the 1940 Act, (ii) the
Trust will be classified as a grantor trust for United States Federal income tax
purposes and (iii) so that the Subordinated Debt Securities will be treated as
indebtedness of the Sponsor for United States Federal income tax purposes and
shall not take any action which is inconsistent with or contrary to the these
purposes. In this connection, the Sponsor and the Trustees are authorized to
take any action, not inconsistent with applicable law,
S-17
the Certificate of Trust or this Declaration, that each of the Sponsor and the
Trustees determines in its 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.
Subject to this Section 3.5, the Regular Trustees shall have none of the
powers or the authority of the Property Trustee set forth in Section 3.6.
The Trust initially appoints the Property Trustee as transfer agent and
registrar for the Preferred Securities.
Section 3.6 POWERS AND DUTIES OF THE PROPERTY TRUSTEE
(a) The Property Trustee shall have the power, duty and authority to act on
behalf of the Trust with respect to the following matters:
(i) the establishment of the Payment Account;
(ii) the receipt of the Subordinated Debt Securities;
(iii) the collection of interest, principal and any other payments
made in respect of the Subordinated Debt Securities in the Payment Account;
(iv) the distribution through the Paying Agent of amounts owed to the
Securityholders in respect of the Securities;
(v) the exercise of all of the rights, powers and privileges of a
holder of the Subordinated Debt Securities;
(vi) the sending of notices of default and other information regarding
the Securities and the Subordinated Debt Securities to the Securityholders
in accordance with this Declaration;
(vii) the distribution of the Trust Property in accordance with the
terms of this Declaration;
(viii) to the extent provided in this Declaration, assisting in 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;
(ix) after an Event of Default (other than under paragraph (b), (c),
(d) or (e) of the definition of such term if such Event of Default is by or
with respect to the Property Trustee) 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 Declaration 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);
S-18
(x) any Legal Action which arises out of or in connection with an
Event of Default or the Property Trustee's duties and obligations under
this Declaration, the Business Trust Act or the Trust Indenture Act. and
(xi) any of the duties, liabilities, powers or the authority of the
Regular Trustees set forth in Section 3.5(a)(v), (vi) and (x);
and in the event of a conflict between the actions of the Regular Trustees
and those of the Property Trustee, the actions of the Property Trustee shall
prevail.
(b) The Property Trustee shall take all actions and perform such duties as
may be specifically required of the Property Trustee pursuant to the terms of
the Securities and this Declaration.
(c) If the Property Trustee fails to enforce its rights under the
Subordinated Debt Securities after a Holder of Preferred Securities has made a
written request, such Holder may, to the fullest extent permitted by law,
institute a legal proceeding against the Subordinated Debt Securities Issuer, to
enforce the Property Trustee's rights under the Subordinated Debt Securities,
without first instituting any legal proceeding against the Property Trustee or
any other Person. Notwithstanding the foregoing, if an Event of Default has
occurred and is continuing and such event is attributable to the failure of the
Subordinated Debt Securities Issuer to pay interest, premium, if any, or
principal on the Subordinated Debt Securities on the date such interest,
premium, if any, or principal is otherwise payable (or in the case of
redemption, on the redemption date), then Holders of at least 25% in aggregate
Liquidation Amount of the Preferred Securities may directly institute a
proceeding for enforcement of payment to such Holder of the principal of,
premium, if any, or interest on, the Subordinated Debt Securities having a
principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such Holder (a "Direct Action"). Notwithstanding any payments
made to any Holders of Preferred Securities by the Subordinated Debt Securities
Issuer in connection with a Direct Action, the Subordinated Debt Securities
Issuer shall remain obligated to pay the principal of, premium, if any, or
interest on the Subordinated Debt Securities held by the Trust or the Property
Trustee of the Trust, and the Subordinated Debt Securities Issuer shall be
subrogated to the rights of the Holders of such Preferred Securities with
respect to payments on the Preferred Securities. Except as provided in the
preceding sentences and in the Preferred Securities Guarantee, the Holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Subordinated Debt Securities.
(d) No resignation of the Property Trustee shall be effective unless
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Securityholders pursuant to the terms of the
Securities; or
(ii) a Successor Property Trustee has been appointed and accepted that
appointment in accordance with Section 9.8.
S-19
(e) The Property Trustee shall have the legal power to exercise all of the
rights, powers and privileges of a holder of Subordinated Debt Securities under
the Indenture and, if an Event of Default occurs and is continuing, the Property
Trustee shall, for the benefit of Securityholders, enforce its rights as holder
of the Subordinated Debt Securities subject to the rights of the Holders
pursuant to the terms of such Securities and this Declaration.
(f) The Property Trustee may authorize one or more Paying Agents to pay
Distributions, redemption payments or liquidation payments on behalf of the
Trust with respect to the Preferred Securities and any such Paying Agent shall
comply with Section 317(b) of the Trust Indenture Act. Any Paying Agent may be
removed by the Property Trustee at any time and a successor Paying Agent or
additional Paying Agents may be appointed at any time by the Property Trustee.
(g) Subject to this Section 3.6, the Property Trustee shall have none of
the powers or the authority of the Regular Trustees set forth in Section 3.5 of
this Declaration.
(h) The Property Trustee must exercise the powers set forth in this Section
3.6 in a manner which is consistent with the purposes, functions and
characterization for United States federal income tax purposes of the Trust set
forth in Section 3.5(b) and the Property Trustee shall not take any action which
is inconsistent with or contrary to the purposes, functions and characterization
for United States federal income tax purposes of the Trust set out in Section
3.5(b) of this Declaration.
(i) The Property Trustee, before the occurrence of any Event of Default and
after the curing or waiver of all Events of Default that may have occurred:
(i) shall undertake to perform only such duties as are specifically
set forth in this Declaration and in the terms of the Securities, and no
implied covenants, duties or obligations shall be read into this
Declaration against the Property Trustee; and
(ii) in the absence of bad faith on the part of the Property Trustee,
the Property Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Property Trustee and conforming
to the requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are specifically
required to be furnished to the Property Trustee, the Property Trustee
shall be under a duty to examine the same to determine whether or not they
conform to the requirements of this Declaration.
In case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6), the Property Trustee shall exercise such of the rights
and powers vested in it by this Declaration, and use the same degree of care and
skill in their exercise or use, as a prudent person would exercise or use under
the circumstances in the conduct of his or her own affairs;
S-20
(j) no provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(i) this Subsection shall not be construed to limit Subsection (i) of
this Section;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was negligent
in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in liquidation
amount of the Securities at the time outstanding relating to the time,
method and place of conducting any proceeding for any remedy available to
the Property Trustee, or exercising any trust or power conferred upon the
Property Trustee under this Declaration including, without limitation, with
respect to the Securities;
(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
Property Trustee pursuant to Section 3.1 and except to the extent otherwise
required by law;
(v) the Property Trustee shall not be responsible for monitoring the
compliance by the Regular Trustees or the Sponsor with their respective
duties under this Declaration, nor shall the Property Trustee be liable for
the default or misconduct of the Regular Trustees or the Sponsor; and
(vi) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if it shall have reasonable ground
for believing that the repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
(k) Whether or not therein expressly so provided, every provision of this
Declaration relating to the conduct or affecting the liability of or affording
protection to the Property Trustee shall be subject to the provisions of this
Section.
Section 3.7 CERTAIN RIGHTS OF THE PROPERTY TRUSTEE
Subject to the provisions of Section 3.6:
(a) if (i) in performing its duties under this Declaration the Property
Trustee is required to decide between alternative courses of action or (ii) in
construing any of the provisions
S-21
of this Declaration 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 Declaration, then,
except as to any matter as to which the Preferred Securityholders are entitled
to vote under the terms of this Declaration, the Property Trustee shall take
such action, or refrain from taking such action, not inconsistent with this
Declaration 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;
(b) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by an Officer's
Certificate;
(c) whenever in the administration of this Declaration, 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 Officer's Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(d) 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;
(e) the Property Trustee may consult with counsel of its selection (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 or any Opinion of Counsel
shall be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance thereon
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 Declaration from any court of competent jurisdiction at
the expense of the Sponsor;
(f) the Property Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Declaration at the request or
direction of any of the Securityholders pursuant to this Declaration, unless
such Securityholders shall have offered to the Property Trustee security or
indemnity satisfactory to it against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction;
(g) 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,
debenture, note or other evidence of indebtedness or other paper or document,
but the Property Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and if the Property
Trustee shall determine to make such further inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Trust, personally
or by agent or attorney at the expense of the Sponsor and shall incur no
liability or additional liability of any kind by reason of such inquiry or
investigation;
S-22
(h) 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;
(i) whenever in the administration of this Declaration 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 written instructions from the Securityholders which
written instructions may only be given by the Holders of the same
proportion in aggregate Liquidation Amount of the Securities as would be
entitled to direct the Property Trustee under the terms of the Securities
in respect of such remedy, right or action;
(ii) may refrain from enforcing such remedy or right or taking such
other action until such written instructions are received; and
(iii) shall be protected in acting in accordance with such written
instructions; and
(j) except as otherwise expressly provided by this Declaration, the
Property Trustee shall not be under any obligation to take any action that is
discretionary under the provisions of this Declaration.
No provision of this Declaration shall be deemed to impose any duty or
obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall be
construed to be a duty.
Section 3.8 PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES
So long as this Declaration 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 (acting on behalf of he Trust) shall not:
(i) acquire any investments other than the Subordinated Debt
Securities,
(ii) engage in any activities not authorized by this Declaration,
(iii) 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,
(iv) 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,
S-23
(v) incur any indebtedness for borrowed money or issue any other debt
or
(vi) take or consent to any action that would result in the placement
of a Lien on any of the Trust Property.
The Property Trustee 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;
provided, however, that (x) all expenses relating to such defense shall be borne
by the Sponsor and (y) the Property Trustee shall be fully indemnified by the
Sponsor for all costs incurred in connection with such defense.
Section 3.9 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES
The recitals contained herein and in the 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 Subordinated Debt Securities.
Section 3.10 ORGANIZATIONAL EXPENSES
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 3.11 RIGHTS AND RESPONSIBILITIES OF SPONSOR
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
Declaration are hereby ratified and confirmed in all respects):
(i) the preparation and filing by the Trust with the Commission of
prospectus supplements and the execution on behalf of the Trust of post-
effective amendments to the registration statement relating to the
Preferred Securities on the appropriate form in relation to the Preferred
Securities;
(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;
S-24
(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 Securities Exchange Act of 1934, as amended,
including any amendments thereto, if required;
(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 necessary or desirable to carry
out any of the foregoing activities.
Section 3.12 ISSUANCE OF PREFERRED SECURITIES
The Sponsor and the Trust have executed and delivered the Underwriting
Agreement. On the Closing Date, a Regular Trustee, on behalf of the Trust,
shall execute in accordance with Section 6.2, and upon written direction the
Property Trustee shall make available to the Underwriters named in the
Underwriting Agreement, Preferred Securities Certificates, registered in the
name of the nominee of the initial Clearing Agency, evidencing an aggregate of
8,000,000 Preferred Securities having an aggregate Liquidation Amount of
$200,000,000, against receipt by the Property Trustee of the aggregate purchase
price of such Preferred Securities of $200,000,000, less applicable discounts
and commissions.
Section 3.13 ISSUANCE OF COMMON SECURITIES
On the Closing Date, a Regular Trustee, on behalf of the Trust, shall
execute in accordance with Section 6.2, and the Property Trustee shall deliver
to the Sponsor, Common Securities Certificates, registered in the name of the
Sponsor, evidencing an aggregate of __________ Common Securities having an
aggregate Liquidation Amount of $________ against receipt by the Property
Trustee from the Sponsor of such amount. Contemporaneously therewith, a Regular
Trustee, on behalf of the Trust, shall subscribe to and purchase from the
Sponsor the Subordinated Debt Securities, registered in the name of the Property
Trustee (in its capacity as such) and having an aggregate principal amount equal
to $___________, and, in satisfaction of the purchase price for such
Subordinated Debt Securities, the Property Trustee, on behalf of the Trust,
shall deliver to the Sponsor the sum of $___________ (being the sum of the
amounts delivered to the Property Trustee pursuant to (i) the second sentence of
Section 3.12 and (ii) the first sentence of this Section 3.13).
Section 3.14 TITLE TO PROPERTY OF THE TRUST
Except as provided in Section 3.6 with respect to the Subordinated Debt
Securities and the Payment Account or as otherwise provided in this Declaration,
legal title to all Trust Property
S-25
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 Declaration.
ARTICLE IV.
PAYMENT ACCOUNT
Section 4.1 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 Declaration. 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 Subordinated Debt Securities. Amounts
held in the Payment Account shall not be invested by the Property Trustee
pending distribution thereof.
ARTICLE V.
DISTRIBUTIONS; REDEMPTION
Section 5.1 DISTRIBUTIONS
(a) The Securities represent undivided beneficial interests in the Trust
Property, and Distributions (including of Additional Amounts) will be made on
the Securities at the rate and on the dates that payments of interest (including
of Additional Interest, as defined in the Officers' Certificate establishing the
terms of the Subordinated Debt Securities pursuant to Section 303 of the
Indenture) are made on the Subordinated Debt Securities. Accordingly:
(i) Distributions on the 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 _________, 2000,
and, except in the event (and to the extent) that the Sponsor exercises its
right to defer the payment of interest on the Subordinated Debt Securities
pursuant to the Indenture, shall be payable quarterly in arrears on
_________, _________, _________ and _________ of each year, commencing on
_________, 2000. If any date on which a Distribution is otherwise payable
on the 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 Business Day is in the next succeeding
S-26
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 5.1(a), a "Distribution Date").
(ii) Assuming payments of interest on the Subordinated Debt Securities
are made when due (and before giving effect to Additional Amounts, if
applicable), Distributions on the Securities shall be payable at a rate
______% per annum of the Liquidation Amount of the Securities. 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 for
any partial period shall be computed on the basis of the number of days
elapsed in a 360-day year of twelve 30-day months. The amount of
Distributions payable for any period shall include the Additional Amounts,
if any.
(iii) Distributions on the 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.
(b) Distributions on the Securities with respect to a Distribution Date
shall be payable to the Holders thereof as they appear on the Securities
Register for the 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.
Section 5.2 REDEMPTION
(a) On each Indenture Redemption Date and on the stated maturity of the
Subordinated Debt Securities, the Trust will be required to redeem a Like Amount
of Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee at the
expense of the Sponsor by first-class mail, postage prepaid, mailed not less
than 30 nor more than 60 days prior to the Redemption Date (or, in the event
that the redemption results from acceleration after the occurrence of an
Indenture Event of an Indenture Event of Default and the Property Trustee is
unable to give such notice within such period, as soon as practicable) to each
Securityholder 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 less than all the Outstanding Securities are to be redeemed,
the
S-27
identification and the total Liquidation Amount of the particular
Securities to be redeemed; and
(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, except
as provided in Section 5.2(d).
(c) The Securities redeemed on each Redemption Date shall be redeemed at
the Redemption Price with the proceeds from the contemporaneous redemption of
Subordinated Debt Securities. Redemptions of the 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
Preferred Securities, then, by 2:00 p.m., New York City time, on the Redemption
Date, subject to Section 5.2(c), the Property Trustee will, so long as the
Preferred Securities are in book-entry-only form, irrevocably deposit with the
Clearing Agency for the Preferred Securities funds sufficient to pay the
applicable Redemption Price and will give such Clearing Agency instructions with
respect to payment of the Redemption Price to the holders of the Preferred
Securities in accordance with the procedures set forth in the applicable
agreement between the Property Trustee and such Clearing Agency. If the
Preferred Securities are no longer in book-entry-only form, the Property
Trustee, subject to Section 5.2(c), will irrevocably deposit with the Paying
Agent funds sufficient to pay the applicable Redemption Price and will give the
Paying Agent instructions and authority to pay the Redemption Price to the
Holders thereof upon surrender of their Preferred Securities Certificates in
accordance with the notice of redemption. Notwithstanding the foregoing,
Distributions payable on or prior to the Redemption Date for any Securities
called for redemption shall be payable to the Holders of such Securities as they
appear on the Register for the Securities on the relevant record dates for the
related Distribution Dates. If notice of redemption shall have been given and
funds deposited as required, then upon the date of such deposit, all rights of
Securityholders holding Securities so called for redemption will cease, except
the right of such Securityholders to receive the Redemption Price and any
Distribution payable on or prior to the Redemption Date, but 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 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 Securities called for
redemption is improperly withheld or refused and not paid either by the Trust or
by the Guarantor pursuant to the Guarantee, Distributions on such Securities
will continue to accrue, at the then applicable rate, from the Redemption Date
originally established by the Trust for such Securities to the date such
Redemption Price is actually paid, in which case the actual payment date will be
the date fixed for redemption for purposes of calculating the Redemption Price.
(e) Payment of the Redemption Price on the Securities shall be made to the
S-28
recordholders thereof as they appear on the Securities Register for the
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 5.3(a), if less than all the Outstanding Securities
are to be redeemed on a Redemption Date, then the aggregate Liquidation Amount
of 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 and Common Securities to be redeemed shall
be selected on a pro rata basis (based upon Liquidation Amounts) not more than
60 days prior to the Redemption Date by the Property Trustee from the
Outstanding Preferred Securities and Common Securities, respectively, not
previously called for redemption, by such method (including, without limitation,
by lot) as the Property Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions (equal to $25 or an
integral multiple of $25 in excess thereof) of the Liquidation Amount of
Preferred Securities and Common Securities, respectively, of a denomination
larger than $25. The Property Trustee shall promptly notify the Security
Registrar in writing of the Preferred Securities and Common Securities selected
for redemption and, in the case of any Preferred Securities or Common Securities
selected for partial redemption, the Liquidation Amount thereof to be redeemed.
For all purposes of this Declaration, unless the context otherwise requires, all
provisions relating to the redemption of Preferred Securities or Preferred
Securities shall relate, in the case of any Preferred Securities or Common
Securities, as applicable, redeemed or to be redeemed only in part, to the
portion of the Liquidation Amount of Preferred Securities or Common Securities,
as applicable, that has been or is to be redeemed.
Section 5.3 SUBORDINATION OF COMMON SECURITIES
(a) Payment of Distributions (including Additional Amounts, if applicable)
on, and the Redemption Price of, the Securities, as applicable, shall be made,
subject to Section 5.2(f), pro rata among the Common Securities and the
Preferred Securities based on the Liquidation Amount of the Securities;
provided, however, that if on any Distribution Date or Redemption Date any Event
of Default resulting from an Indenture Event of Default shall have occurred and
be continuing, no payment of any Distribution (including Additional Amounts, if
applicable) 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 (including Additional Amounts, if applicable) 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 (including Additional Amounts, if applicable) 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 Indenture Event of Default, the Holder of Common Securities will be deemed
to have waived any right to
S-29
act with respect to any such Event of Default under this Declaration 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 Declaration 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 5.4 PAYMENT PROCEDURES
Payments of Distributions (including Additional Amounts, if applicable) 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. Any Distributions in respect of
Preferred Securities that remain unclaimed for a period of two years following
the applicable Distribution Date shall be paid to the Holder of the Common
Securities. [Escheat]
Section 5.5 TAX RETURNS AND REPORTS
The Regular 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, payee statements and reports required to be filed by or in
respect of the Trust. In this regard, the Regular 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. The Regular 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 and the Paying Agent 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
Securities.
Section 5.6 PAYMENT OF TAXES, DUTIES, ETC. OF THE TRUST
Upon receipt under the Subordinated Debt Securities of Additional Sums, the
Property Trustee, pursuant to written instructions from the Sponsor detailing
the payments to be made, shall promptly pay at the expense of the Sponsor any
taxes, duties or governmental charges of whatsoever nature (other than
withholding taxes) imposed on the Trust by the United States or any other taxing
authority.
Section 5.7 PAYMENTS UNDER INDENTURE OR PURSUANT TO DIRECT ACTIONS
Any amount payable hereunder to any Holder of Preferred Securities shall be
reduced by
S-30
the amount of any corresponding payment such Holder has directly received
pursuant to [Section 2.19] of the Officers' Certificate establishing the
Subordinated Debt Securities pursuant to Section 303 of the Indenture or Section
3.6(c) of this Declaration.
ARTICLE VI.
TRUST SECURITIES CERTIFICATES
Section 6.1 INITIAL OWNERSHIP
Upon the formation of the Trust and until the issuance of the Securities,
and at any time during which no Securities are outstanding, the Sponsor shall be
the sole beneficial owner of the Trust.
Section 6.2 CERTIFICATES
The Preferred Securities Certificates shall be issued in minimum
denominations of $25 Liquidation Amount and integral multiples of $25 in excess
thereof, and the Common Securities Certificates shall be issued in minimum
denominations of $25 Liquidation Amount and integral multiples thereof. The
Certificates shall be executed on behalf of the Trust by manual signature of at
least one Regular Trustee. 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 Declaration, notwithstanding that such individuals or
any of them shall have ceased to be so authorized prior to the delivery of such
Certificates or did not hold such offices at the date of delivery of such
Certificates. A transferee of a 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 Certificate in such
transferee's name pursuant to Sections 6.4, 6.10 and 6.12.
Section 6.3 EXECUTION AND DELIVERY OF CERTIFICATES
At the Closing Date the Regular Trustees shall cause Certificates to be
executed on behalf of the Trust and delivered by the Property Trustee as
provided in Sections 3.12 and 3.13.
Section 6.4 REGISTRATION AND 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 6.7, a register or registers for the purpose of
registering Certificates and transfers and exchanges of Preferred Securities
Certificates (the "Securities Register") in which the 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 6.9 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
S-31
office or agency maintained pursuant to Section 6.7, the Regular Trustees or any
one of them shall execute and deliver to the Property Trustee, and the Property
Trustee shall 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 Regular
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 6.7.
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 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 canceled and subsequently disposed of by the Property Trustee
in accordance with such Person's 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 6.5 MUTILATED, DESTROYED, LOST OR STOLEN TRUST CERTIFICATES
If (a) any mutilated 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 Certificate and (b) there
shall be delivered to the Securities Registrar and the Regular 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 Certificate shall have been acquired by
a bona fide purchaser, the Regular 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 Certificate, a new
Certificate of like class, tenor and denomination. In connection with the
issuance of any new Certificate under this Section, the Regular 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 Certificate issued pursuant to this Section shall constitute
conclusive evidence of an undivided beneficial interest in the assets of the
Trust, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 6.6 PERSONS DEEMED SECURITYHOLDERS
The Trustees or the Securities Registrar shall treat the Person in whose
name any Certificate shall be registered in the Securities Register as the owner
of such Certificate for the purpose of receiving Distributions and for all other
purposes whatsoever, and neither the Trustees
S-32
nor the Securities Registrar shall be bound by any notice to the contrary.
Section 6.7 MAINTENANCE OF OFFICE OR AGENCY
The Property Trustee shall designate, with the consent of the Regular
Trustees (which consent shall not be unreasonably withheld), 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 Certificates may be served.
The Property Trustee initially designates its Corporate Trust Office as its
office and agency for such purposes. The Property Trustee 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 6.8 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 Regular 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 Property Trustee may revoke such
power and remove the Paying Agent in its sole discretion. The Paying Agent shall
initially be the Bank, and any co-paying agent chosen by the Bank, and
reasonably acceptable to the Regular Trustees. Any Person acting as Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' written notice to the
Regular Trustees and the Property Trustee. 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 Property Trustee shall appoint a successor that
is acceptable to the Regular Trustees to act as Paying Agent (which shall be a
bank or trust company). The Property Trustee shall cause such successor Paying
Agent or any additional Paying Agent appointed by the Property Trustee 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 3.6, 3.7 and 9.3 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 6.9 OWNERSHIP OF COMMON SECURITIES BY SPONSOR
On the Closing Date the Sponsor shall acquire and retain beneficial and
record ownership of the Common Securities. To the fullest extent permitted by
law, other than a transfer in connection with a consolidation or merger of the
Sponsor into another corporation, or any conveyance, transfer or lease by the
Sponsor of its properties and assets substantially as an
S-33
entirety to any Person, pursuant to Section 801 of the Indenture, any attempted
transfer of the Common Securities shall be void. The Regular Trustees shall
cause each Common Securities Certificate issued to the Sponsor to contain a
legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT IN CERTAIN LIMITED
CIRCUMSTANCES SET FORTH IN THE DECLARATION (AS DEFINED BELOW)."
Section 6.10 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 Owner will receive a
Definitive Preferred Securities Certificate representing such Owner's interest
in such Preferred Securities, except as provided in Section 6.12. Unless and
until Definitive Preferred Securities Certificates have been issued to Owners
pursuant to Section 6.12:
(i) the provisions of this Section 6.10(a) shall be in full force and
effect;
(ii) the Securities Registrar, the Sponsor and the Trustees shall be
entitled to deal with the Clearing Agency for all purposes of this
Declaration relating to the Book-Entry Preferred Securities Certificates
(including the payment of the Liquidation Amount of and Distributions or
Redemption Price on the Preferred Securities evidenced by Book-Entry
Preferred Securities Certificates and the giving of instructions or
directions to Owners of Preferred Securities evidenced by Book-Entry
Preferred Securities Certificates) as the sole Holder of Preferred
Securities evidenced by Book-Entry Preferred Securities Certificates and
shall have no obligations to the Owners thereof;
(iii) to the extent that the provisions of this Section 6.10 conflict
with any other provisions of this Declaration, the provisions of this
Section 6.10 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 Trust's agreement with the DTC, unless and until Definitive
Preferred Securities Certificates are issued pursuant to Section 6.12, 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.
S-34
Section 6.11 NOTICES TO CLEARING AGENCY
To the extent that a notice or other communication to the Owners is
required under this Declaration, unless and until Definitive Preferred
Securities Certificates shall have been issued to Owners pursuant to Section
6.12, 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 6.12 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 Indenture Event of Default,
Owners of Preferred Securities Certificates representing beneficial interests
aggregating at least a majority of the aggregate Liquidation Amount of the
Outstanding Preferred Securities advise the Regular Trustees 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
Regular Trustees 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 Regular Trustees or the
Securities Registrar of the typewritten Preferred Securities Certificate or
Certificates representing the Book Entry Preferred Securities Certificates by
the Clearing Agency, accompanied by registration instructions, the Regular
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 Regular Trustees, as evidenced by the execution thereof by the Regular
Trustees or any one of them
ARTICLE VII.
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
Section 7.1 LIMITATION ON VOTING RIGHTS
(a) Except as provided in this Section, in Sections 3.6, 9.7 and 11.2 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
S-35
contained in the terms of the 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 Subordinated 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 Subordinated Debt
Securities Trustee, or executing any trust or power conferred on the Property
Trustee with respect to such Subordinated Debt Securities, (ii) waive any past
default which is waivable under Section 513 of the Indenture, (iii) exercise any
right to rescind or annul a declaration that the principal of all the
Subordinated Debt Securities shall be due and payable or (iv) consent to any
amendment, modification or termination of the Indenture or the Subordinated Debt
Securities, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a majority in aggregate
Liquidation Amount of all Outstanding Preferred Securities, provided, however,
that where a consent under the Indenture would require the consent of each
Holder of Subordinated 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 Subordinated Debt Securities Trustee with
respect to the Subordinated 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 such
action shall not cause the Trust to fail to be classified as a grantor trust for
United States Federal income tax purposes.
(c) If any proposed amendment to this Declaration 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 this Declaration or
otherwise, or (ii) the dissolution, winding-up or termination of the Trust,
other than pursuant to the terms of this Declaration, 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 aggregate
Liquidation Amount of the Outstanding Preferred Securities. Notwithstanding any
other provision of this Declaration, no amendment to this Declaration may be
made if, as a result of such amendment, it would cause the Trust to fail to be
classified as a grantor trust for United States Federal income tax purposes.
Section 7.2 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 11.8 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.
S-36
Section 7.3 MEETINGS OF PREFERRED SECURITYHOLDERS
No annual meeting of Securityholders is required to be held. The Property
Trustee, however, shall call a meeting of Preferred Securityholders to vote on
any matter upon the written request of the Preferred Securityholders of record
of 25% or more of the Preferred Securities (based upon their aggregate
Liquidation Amount) and the Regular 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 aggregate 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 aggregate 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 Preferred Securityholders,
unless this Declaration requires a greater number of affirmative votes.
Section 7.4 VOTING RIGHTS
Securityholders shall be entitled to one vote for each $25 of Liquidation
Amount represented by their Securities in respect of any matter as to which such
Securityholders are entitled to vote.
Section 7.5 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 Property Trustee, or with such
other officer or agent of the Trust as the Property Trustee 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 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 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 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 7.6 SECURITYHOLDER ACTION BY WRITTEN CONSENT
Any action which may be taken by Securityholders at a meeting may be taken
without a meeting and without prior notice if Securityholders holding a majority
of all Outstanding
S-37
Securities (based upon their Liquidation Amount) entitled to vote in respect of
such action (or such larger proportion thereof as shall be required by any
express provision of this Declaration) shall consent to the action in writing.
Section 7.7 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 to act by written consent, or to
participate in any distribution on the Securities in respect of which a record
date is not otherwise provided for in this Declaration, or for the purpose of
any other action, the Regular Trustees or the Property Trustee 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 7.8 ACTS OF SECURITYHOLDERS
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Declaration to be given, made or
taken by Securityholders or Owners may be embodied in and evidenced by one or
more written instruments of substantially similar tenor signed by such
Securityholders or Owners in person or by an agent duly appointed in writing;
and, except as otherwise expressly provided herein, such action shall become
effective when such written instrument or instruments are delivered to the
Property Trustee. Such written instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Securityholders or Owners signing such written instrument or
instruments. Proof of execution of any such written instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this
Declaration 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.
S-38
Without limiting the foregoing, a Securityholder entitled hereunder to take
any action hereunder with regard to any particular Trust Security may do so with
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 arises between the Securityholders and the Property Trustee
or among such Securityholders or the 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 VII, then the determination of such matter by the Property Trustee shall
be conclusive and binding with respect to such matter.
Section 7.9 INSPECTION OF RECORDS
Upon reasonable notice to the Regular 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 VIII.
REPRESENTATIONS AND WARRANTIES
Section 8.1 REPRESENTATIONS AND WARRANTIES OF THE PROPERTY 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 Property Trustee is a New York banking corporation validly existing
and in good standing under the laws of the State of New York;
(b) the Property Trustee has the requisite power and authority to execute,
deliver and perform its obligations under this Declaration and has taken all
necessary action to authorize the execution, delivery and performance by it of
this Declaration;
(c) the Delaware Trustee is a Delaware banking corporation duly organized,
validly existing and in good standing in the State of Delaware;
(d) the Delaware Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Declaration and
has taken all necessary action to authorize the execution, delivery and
performance by it of this Declaration;
(e) this Declaration has been duly authorized, executed and delivered by
the Property Trustee and the Delaware Trustee and constitutes the valid and
legally binding agreement of each of the Property Trustee and the Delaware
Trustee enforceable against each of them 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
S-39
equity principles; and
(f) the execution, delivery and performance of this Declaration has been
duly authorized by all necessary corporate or other action on the part of the
Property Trustee and the Delaware Trustee and does not require any approval of
stockholders of the Property Trustee or the Delaware Trustee.
Section 8.2 REPRESENTATIONS AND WARRANTIES OF SPONSOR
The Sponsor hereby represents and warrants that:
(a) this Declaration has been duly authorized, executed and delivered by
the Sponsor and constitutes the valid and legally binding agreement of the
Sponsor 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;
(b) the Certificates issued on the Closing Date on behalf of the Trust have
been duly authorized and will have been duly and validly executed, issued and
delivered by the Trustees pursuant to the terms and provisions of, and in
accordance with the requirements of, this Declaration and the Securityholders
will be, as of each such date, entitled to the benefits of this Declaration; and
(c) 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 Declaration.
ARTICLE IX.
OTHER PROVISIONS WITH RESPECT TO THE TRUSTEES
Section 9.1 CERTAIN NOTICES
Within ten Business Days after the receipt of notice of the Sponsor's
exercise of its right to defer the payment of interest on the Subordinated Debt
Securities pursuant to the Indenture, the Property Trustee shall transmit, in
the manner and to the extent provided in Section 11.8, notice of such exercise
to the Securityholders and the Regular Trustees, unless such exercise shall have
been revoked.
Section 9.2 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 Securities
and, subject to Sections 9.5 and 9.10 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
S-40
Section 9.3 COMPENSATION; INDEMNITY; FEES
The Sponsor agrees:
(a) to pay to the Trustees from time to time such compensation as shall be
agreed to in writing between the Sponsor and each Trustee 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
Declaration (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 willful misconduct; and
(c) to the fullest extent permitted by applicable law, to indemnify and
hold harmless (i) each Trustee, (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, (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 Declaration, except that no Indemnified Person shall
be entitled to be indemnified in respect of any loss, damage or claim incurred
by such Indemnified Person by reason of negligence or willful misconduct with
respect to such acts or omissions.
The provisions of this Section 9.3 shall survive the termination of this
Declaration or 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 9.3.
The Sponsor and any Trustee (subject to Section 9.5) 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 Securityholders shall have no rights by virtue of
this Declaration in and to such independent ventures or the income or profits
derived therefrom, and the pursuit of any such venture, even if competitive with
the business of the Trust, shall not be deemed wrongful or improper. 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
S-41
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.
Section 9.4 CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF TRUSTEES
(a) There shall at all times be a Property Trustee hereunder. 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 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 Regular Trustees hereunder.
Each Regular Trustee shall be a natural person at least 21 years of age who is
an officer of the Sponsor.
(c) There shall at all times be a Delaware Trustee. 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 9.5 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 Indenture and the Guarantee are hereby excluded for
purposes of Section 310(b)(1) of the Trust Indenture Act.
Section 9.6 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 Regular Trustees, by agreed action
of the majority of such Trustees, shall have power to appoint, and upon the
written request of the Regular Trustees, the Sponsor shall for such purpose join
with the Regular 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
S-42
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 Indenture Event of Default 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 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
of or remove any co-trustee or separate trustee appointed under this Section,
and, in case an Indenture Event of Default 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.
S-43
(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 9.7 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 9.8.
Subject to the immediately preceding paragraph, the Relevant Trustee may
resign at any time by giving written notice thereof to the Securityholders and
the other Trustees. If the instrument of acceptance by the successor Trustee
required by Section 9.8 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, at the expense of the Sponsor, any court of competent
jurisdiction for the appointment of a successor Relevant Trustee.
Unless an Indenture Event of Default 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 aggregate Liquidation Amount of
the Outstanding Preferred Securities, delivered to the Relevant Trustee (in its
individual capacity and on behalf of the Trust). A Regular 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 Indenture Event of Default 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, which successor Trustee shall be domiciled outside of the State of
California, and the retiring Trustee shall comply with the applicable
requirements of Section 9.8. 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
Indenture Event of Default shall have occurred and be continuing, the Preferred
Securityholders, by Act of the Securityholders of a majority in aggregate
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 9.8. If a Regular Trustee shall resign, be removed or
become incapable of acting as Regular Trustee, at a time when an Indenture Event
of Default shall have occurred and be continuing, the Common Securityholder by
Act of the Common Securityholder delivered to the Regular Trustee shall promptly
appoint a successor Regular Trustee and such successor Regular Trustee shall
comply with the applicable requirements of Section 9.8. 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 9.8, any Securityholder who has been a Securityholder of Securities
S-44
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, at the expense of the Sponsor, 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 11.8
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 Declaration,
in the event any Regular 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 the remaining Regular 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 Regular Trustee or
Delaware Trustee, as the case may be, set forth in Section 9.4).
Section 9.8 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 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
Securities and the Trust and (b) shall add to or change any of the provisions of
this Declaration 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,
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 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.
S-45
Section 9.9 MERGER, CONVERSION CONSOLIDATION OR SUCCESSION TO BUSINESS
Any corporation into which the Property Trustee or the Delaware Trustee may
be merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such Trustee
shall be a party, or any corporation succeeding to all or substantially all the
corporate trust business of such Trustee, shall be the successor of such Trustee
hereunder, provided such corporation shall be otherwise qualified and eligible
under this Article, without the execution or filing of any paper or any further
act on the part of any of the parties hereto.
Section 9.10 PREFERENTIAL COLLECTION OF CLAIMS AGAINST SPONSOR OR TRUST
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Trust or any other obligor upon the
Securities or the property of the Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions on
the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any Distributions
owing and unpaid in respect of the Securities and to file such other papers or
documents as may be necessary or advisable in order to have the claims of the
Property Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Property Trustee, its agents and counsel) and
of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Property Trustee and, in the event the Property Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Property Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Property Trustee, its agents and counsel, and
any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement adjustment or compensation affecting the
Securities or the rights of any Holder thereof or to authorize the Property
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 9.11 NUMBER OF TRUSTEES
(a) The number of Trustees shall initially be five, provided that the
Holder of all of
S-46
the Common Securities by written instrument may increase or decrease the number
of Regular Trustees. The Property Trustee and the Delaware Trustee may be the
same Person.
(b) If a Trustee ceases to hold office for any reason and, if such Trustee
is a Regular Trustee, the number of Regular Trustees is not reduced pursuant to
Section 9.11(a), or if the number of Trustees is increased pursuant to Section
9.11(a), a vacancy shall occur. The vacancy shall be filled with a Trustee
appointed in accordance with Section 9.7.
(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 Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee or Regular Trustees in accordance with Section 9.7, the Regular
Trustees in office, regardless of their number (and notwithstanding any other
provision of this Agreement), shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
Section 9.12 DELEGATION OF POWER
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.5; and
(b) The Regular 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 Regular Trustees or otherwise as the Regular Trustees may deem expedient, to
the extent such delegation is not prohibited by applicable law or contrary to
the provisions of this Declaration, as set forth herein.
Section 9.13 DELAWARE TRUSTEE
It is expressly understood and agreed by the parties hereto that, in
fulfilling its obligations as Delaware Trustee hereunder on behalf of the Trust,
(i) any agreements or instruments executed and delivered by The Bank of New York
(Delaware) are executed and delivered not in its individual capacity but solely
as Delaware Trustee under this Declaration in exercise of the powers and
authority conferred and vested in it, (ii) each of the representations,
undertakings and agreements herein made by The Bank of New York (Delaware) on
the part of the Trust is made and intended not as representations, warranties,
covenants, undertakings and agreements by The Bank of New York (Delaware) in its
individual capacity but is made and intended for the purpose of binding only the
Trust, and (iii) under no circumstances shall The Bank of New York (Delaware) in
its individual capacity be personally liable for the payment of any indebtedness
or expenses of the Trust or be liable for the breach or failure of any
obligation, representation, warranty or covenant made or undertaken by the Trust
under this Declaration, except if such breach or failure is due to any
negligence or willful misconduct of the Delaware Trustee.
S-47
ARTICLE X.
TERMINATION, LIQUIDATION AND MERGER
Section 10.1 TERMINATION UPON EXPIRATION DATE
Unless earlier dissolved, the Trust shall automatically dissolve on
__________ (the "Expiration Date"), and the Trust Property shall be distributed
in accordance with Section 10.4.
Section 10.2 EARLY TERMINATION
The first to occur of any of the following events is an "Early Termination
Event," upon the occurrence of which the Trust shall be dissolved:
(a) a Bankruptcy Event in respect of, or the dissolution or liquidation of,
the Sponsor;
(b) the filing of a certificate of dissolution or its equivalent with
respect to the Sponsor;
(c) the date that is 90 days after the revocation of the articles of
incorporation of the Sponsor (but only if the articles of incorporation are not
reinstated during such 90-day period);
(d) the written direction to the Property Trustee from the Sponsor at any
time to dissolve the Trust and distribute Subordinated Debt Securities to
Securityholders in exchange for the Preferred Securities (which direction is
optional and wholly within the discretion of the Sponsor);
(e) the redemption of all of the Preferred Securities in connection with
the redemption of all the Subordinated Debt Securities; and
(f) the entry of an order for dissolution of the Trust by a court of
competent jurisdiction.
Section 10.3 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 10.4, or upon the
redemption of all of the Securities pursuant to Section 5.2, of all amounts
required to be distributed hereunder upon the final payment of the Securities;
(b) the payment of any expenses owed by the Trust; and (c) the discharge of all
administrative duties of the Regular Trustees, including the performance of any
tax reporting obligations with respect to the Trust or the Securityholders.
Section 10.4 LIQUIDATION
(a) If an Early Termination Event specified in clause (a), (b) or (d) of
Section 10.2
S-48
occurs or upon the Expiration Date, the Trust shall be liquidated by 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 Subordinated
Debt Securities, subject to Section 10.4(d). Notice of liquidation shall be
given by the Property Trustee at the expense of the Sponsor by first-class mail,
postage prepaid mailed not later than 30 nor more than 60 days prior to the
Liquidation Date to each Securityholder at such Holder's address appearing in
the Securities Register. All notices of liquidation shall :
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Securities
will no longer be deemed to be Outstanding and any Certificates not
surrendered for exchange will be deemed to represent a Like Amount of
Subordinated Debt Securities; and
(iii) provide such information with respect to the mechanics by which
Holders may exchange Certificates for Subordinated Debt Securities, or if
Section 10.4(d) applies, receive a Liquidation Distribution.
(b) Except where Section 10.2(c) or 10.4(d) applies, in order to effect the
liquidation of the Trust and distribution of the Subordinated Debt Securities to
Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be (i) one Business Day prior to the Liquidation Date
or (ii) in the event that the Preferred Securities are not in book-entry form,
the date 15 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 Subordinated Debt Securities in exchange for the Outstanding
Certificates.
(c) Except where Section 10.2(c) or 10.4(d) applies, after the Liquidation
Date, (i) the Securities will no longer be deemed to be Outstanding, (ii)
certificates representing a Like Amount of Subordinated Debt Securities will be
issued to holders of Certificates, upon surrender of such certificates to the
Property Trustee or its agent for exchange, (iii) the Sponsor shall use its best
efforts to have the Subordinated Debt Securities listed on the New York Stock
Exchange or on such other exchange, interdealer quotation system or self-
regulatory organization as the Preferred Securities are then listed, (iv) any
Certificates not so surrendered for exchange will be deemed to represent a Like
Amount of Subordinated Debt Securities, accruing interest at the rate provided
for in the Subordinated Debt Securities from the last Distribution Date on which
a Distribution was made on such 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 Certificates with respect to
such Subordinated Debt Securities) and (v) all rights of Securityholders holding
Securities will cease, except the right of such Securityholders to receive
Subordinated Debt Securities upon surrender of Certificates.
(d) In the event that, notwithstanding the other provisions of this Section
10.4, whether because of an order for dissolution entered by a court of
competent jurisdiction or otherwise, distribution of the Subordinated Debt
Securities in the manner provided herein is
S-49
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 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 Indenture
Event of Default has occurred and is continuing, the Preferred Securities shall
have a priority over the Common Securities.
Section 10.5 MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF TRUST
The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, except pursuant to this Section 10.5
or Section 10.4. At the request of the Sponsor, with the consent of the Holders
of at least a majority in aggregate Liquidation Amount of the Outstanding
Preferred Securities, the Trust may merge with or into, consolidate, 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 (x) expressly assumes all of the
obligations of the Trust with respect to the Preferred Securities or (y)
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 Subordinated Debt Securities;
(iii) the Preferred 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, 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, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights, preferences and
privileges of the
S-50
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, amalgamation, replacement,
conveyance, transfer or lease, the Sponsor has received an Opinion of
Counsel to the effect that (x) such merger, consolidation, 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,
and (y) following such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, neither the Trust nor such successor entity
will be required to register as an investment company under the 1940 Act;
and
(viii) the Sponsor owns all of the common securities of such
successor entity and the Guarantor 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, or be replaced by or convey,
transfer or lease its properties and assets substantially as an entirety to any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Trust or the successor entity to
be classified as other than a grantor trust for United States Federal income tax
purposes.
ARTICLE XI.
MISCELLANEOUS PROVISIONS
Section 11.1 LIMITATION OF RIGHTS OF SECURITYHOLDERS
Except as otherwise provided in Section 10.2, the death, dissolution,
termination, bankruptcy or incapacity of any Person having an interest,
beneficial or otherwise, in Securities shall not operate to terminate this
Declaration, nor dissolve, terminate or annul the Trust, nor entitle the legal
successors, 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 11.2 AMENDMENT
(a) This Declaration may be amended from time to time by the Property
Trustee, the Regular 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
S-51
provision herein, or to make any other provisions with respect to matters or
questions arising under this Declaration, which shall not be inconsistent with
the other provisions of this Declaration, or (ii) to modify, eliminate or add to
any provisions of this Declaration 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 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 Declaration shall become
effective when notice thereof is given to the Securityholders.
(b) Except as provided in Section 11.2(c) hereof, any provision of this
Declaration may be amended by the Trustees and the Sponsor with (i) the consent
of Securityholders representing a majority (based upon aggregate Liquidation
Amount) of the Securities then Outstanding and (ii) 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
Declaration, without the consent of each affected Securityholder, this
Declaration may not be amended to (i) change the amount or timing of any
Distribution on the Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the 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 11.2 may not be amended.
(d) Notwithstanding any other provisions of this Declaration, no Trustee
shall enter into or consent to any amendment to this Declaration 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 Declaration to the contrary, this
Declaration may not be amended in a manner which imposes any additional
obligation on the Sponsor, the Property Trustee or the Delaware Trustee without
the consent of the Sponsor, the Property Trustee or the Delaware Trustee, as the
case may be.
(f) In the event that any amendment to this Declaration is made, the
Regular 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 Declaration which affects its own rights,
duties or immunities under this Declaration. The Property Trustee shall be
entitled to receive an Opinion of Counsel and an Officer's Certificate stating
that any amendment to this Declaration is in compliance with this Declaration
and that all conditions precedent, if any, to such amendment have been complied
S-52
with.
Section 11.3 SEPARABILITY
In case any provision in this Declaration or in the 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 11.4 GOVERNING LAW
THIS DECLARATION AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS DECLARATION AND
THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES
THEREOF.
Section 11.5 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 5.1(a) and 5.2(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 11.6 SUCCESSORS
This Declaration 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 a consolidation,
merger, sale or other transaction involving the Sponsor that is permitted under
Article Eight 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 11.7 HEADINGS
The Article and Section headings are for convenience only and shall not
affect the construction of this Declaration.
Section 11.8 REPORTS, NOTICES AND DEMANDS
Any report, notice, demand or other communication which by any provision of
this Declaration 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, in each case, addressed, (a) in the case of a
Preferred Securityholder, to such Preferred Securityholder as such
Securityholder's
S-53
name and address may appear on the Securities Register; and (b) in the case of
the Common Securityholder or the Sponsor, to Sempra Energy, 101 Ash Street, San
Diego, California 92101, Attention __________, facsimile number (619)
_____________. Any notice to Preferred Securityholders shall also be given to
such owners as have, within two years preceding the giving of such notice, filed
their names and addresses with the Property Trustee for that purpose. 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
Declaration is required or permitted to be given or served to or upon the Trust,
the Property Trustee, the Delaware Trustee or the Regular 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 The Bank of New York, at
its Corporate Trust Office, Attention: Corporate Trust Administration; (b) with
respect to the Delaware Trustee, to The Bank of New York (Delaware), White Clay
Center, Route 273, Newark, Delaware 19711, Attention: Corporate Trust
Administration; (c) with respect to the Regular Trustees, to them c/o Sempra
Energy, 101 Ash Street, San Diego, California 92101, marked "Attention Regular
Trustees of Sempra Energy Capital Trust I"; and (d) with respect to the Trust,
to its principal office specified in Section 3.2, with a copy to the Property
Trustee. 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.
Section 11.9 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 X, 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 11.9, 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 11.9 shall survive the
termination of this Declaration.
Section 11.10 ACCEPTANCE OF TERMS OF DECLARATION; 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 INTEREST IN
SUCH
S-54
TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS DECLARATION AND
AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND
THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH
SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS DECLARATION
SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND SUCH
SECURITYHOLDER AND SUCH OTHERS. THE DEPOSITOR, THE TRUST AND EACH HOLDER AND
BENEFICIAL OWNER OF A PREFERRED SECURITY (BY ITS ACCEPTANCE OF AN INTEREST
THEREIN) SHALL BE DEEMED TO HAVE AGREED TO TREAT THE NOTES AS INDEBTEDNESS FOR
ALL U.S. TAX PURPOSES AND THE PREFERRED SECURITY AS EVIDENCE OF AN INDIRECT
BENEFICIAL OWNERSHIP INTEREST IN THE NOTES.
(Signature Pages Follow)
S-55
IN WITNESS WHEREOF, the parties hereto have caused this Declaration to be
duly executed, as of the day and year first written above.
SEMPRA ENERGY
By:
__________________________________________
Name: Charles A. McMonagle
Title: Vice President and Treasurer
THE BANK OF NEW YORK, as Property Trustee
By:
__________________________________________
Name
Title:
THE BANK OF NEW YORK (DELAWARE), as Delaware
Trustee
By:
__________________________________________
Name
Title:
Declaration
REGULAR TRUSTEES
----------------
By:
___________________________________________
Name: Neal E. Schmale
Title: Executive Vice President and Chief
Financial Officer
By:
___________________________________________
Name: Frank H. Ault
Title: Executive Vice President, Controller
and Chief Accounting Officer
By:__________________________________________
Name: Charles A. McMonagle
Title: Vice President and Treasurer
2