EXHIBIT 4.3
DECLARATION OF TRUST
CT CONVERTIBLE TRUST I
DATED AS OF July 28, 1998
727341.10
TABLE OF CONTENTS
Page
ARTICLE I INTERPRETATION AND DEFINITIONS......................................................... 1
SECTION 1.1. Definitions.......................................................... 1
ARTICLE II TRUST INDENTURE ACT.................................................................... 7
SECTION 2.1. Trust Indenture Act: Application..................................... 7
SECTION 2.2. Lists of Holders of Securities....................................... 7
SECTION 2.3. Reports by the Institutional Trustee................................. 7
SECTION 2.4. Periodic Reports to Institutional Trustee............................ 8
SECTION 2.5. Evidence of Compliance with Conditions Precedent..................... 8
SECTION 2.6. Events of Default; Waiver............................................ 8
SECTION 2.7. Event of Default; Notice............................................. 9
ARTICLE III ORGANIZATION.......................................................................... 10
SECTION 3.1. Name................................................................ 10
SECTION 3.2. Office.............................................................. 10
SECTION 3.3. Purpose............................................................. 10
SECTION 3.4. Authority........................................................... 10
SECTION 3.5. Title to Property of the Trust...................................... 11
SECTION 3.6. Powers and Duties of the Regular Trustees........................... 11
SECTION 3.7. Prohibition of Actions by the Trust and the Trustees................ 13
SECTION 3.8. Powers and Duties of the Institutional Trustee...................... 14
SECTION 3.9. Certain Duties and Responsibilities of the Institutional Trustee.... 15
SECTION 3.10. Certain Rights of Institutional Trustee............................. 17
SECTION 3.11. Delaware Trustee.................................................... 19
SECTION 3.12. Execution of Documents.............................................. 19
SECTION 3.13. Not Responsible for Recitals or Issuance of Securities.............. 19
SECTION 3.14. Duration of Trust................................................... 19
SECTION 3.15. Mergers............................................................. 19
ARTICLE IV SPONSOR............................................................................... 20
SECTION 4.1. Sponsor's Purchase of Common Securities............................. 20
SECTION 4.2. Responsibilities of the Sponsor..................................... 21
ARTICLE V TRUSTEES.............................................................................. 21
SECTION 5.1. Number of Trustees.................................................. 21
SECTION 5.2. Delaware Trustee.................................................... 21
SECTION 5.3. Institutional Trustee; Eligibility.................................. 22
SECTION 5.4. Certain Qualifications of Regular Trustees and Delaware Trustee
Generally........................................................... 22
SECTION 5.5. Regular Trustees.................................................... 22
SECTION 5.6. Appointment, Removal and Resignation of Trustees.................... 23
SECTION 5.7. Vacancies Among Trustees............................................ 24
SECTION 5.8. Effect of Vacancies................................................ 24
SECTION 5.9. Meetings............................................................ 24
SECTION 5.10. Delegation of Power................................................. 24
SECTION 5.11. Merger, Conversion, Consolidation or Succession to Business......... 25
ARTICLE VI DISTRIBUTIONS......................................................................... 25
SECTION 6.1. Distributions....................................................... 25
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Page
ARTICLE VII ISSUANCE OF SECURITIES................................................................ 25
SECTION 7.1. General Provisions Regarding Securities............................. 25
SECTION 7.2. Execution and Authentication........................................ 26
SECTION 7.3. Form and Dating..................................................... 26
SECTION 7.4. Paying Agent........................................................ 27
ARTICLE VIII TERMINATION OF TRUST.................................................................. 27
SECTION 8.1. Termination of Trust................................................ 27
ARTICLE IX TRANSFER OF INTERESTS................................................................. 28
SECTION 9.1. Transfer of Securities.............................................. 28
SECTION 9.2. Transfer of Certificates............................................ 31
SECTION 9.3. Deemed Security Holders............................................. 31
SECTION 9.4. Mutilated, Destroyed, Lost or Stolen Certificates.................. 31
ARTICLE X LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS.................................................................... 32
SECTION 10.1. Liability........................................................... 32
SECTION 10.2. Exculpation......................................................... 32
SECTION 10.3. Fiduciary Duty...................................................... 32
SECTION 10.4. Indemnification..................................................... 33
SECTION 10.5. Outside Business.................................................... 35
ARTICLE XI ACCOUNTING............................................................................ 36
SECTION 11.1. Fiscal Year......................................................... 36
SECTION 11.2. Certain Accounting Matters.......................................... 36
SECTION 11.3. Banking............................................................. 37
SECTION 11.4. Withholding......................................................... 37
ARTICLE XII AMENDMENTS AND MEETINGS............................................................... 37
SECTION 12.1. Amendments.......................................................... 37
SECTION 12.2. Meetings of the Holders of Securities; Action by Written Consent.... 39
ARTICLE XIII REPRESENTATIONS OF SPONSOR, INSTITUTIONAL TRUSTEE AND
DELAWARE TRUSTEE...................................................................... 40
SECTION 13.1. Representations and Warranties of Institutional Trustee............. 40
SECTION 13.2. Representations and Warranties of Delaware Trustee.................. 41
ARTICLE XIV MISCELLANEOUS......................................................................... 42
SECTION 14.1. Notices............................................................ 42
SECTION 14.2. Governing Law....................................................... 43
SECTION 14.3. Intention of the Parties............................................ 43
SECTION 14.4. Headings............................................................ 43
SECTION 14.5. Successors and Assign............................................... 43
SECTION 14.6. Partial Enforceability.............................................. 43
SECTION 14.7. Counterparts........................................................ 44
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CROSS-REFERENCE TABLE*
Section of Trust Indenture Act Section of
of 1939, as amended Declaration
310(a)................................................ 5.3(a)
310(c)................................................ Inapplicable
311(c)................................................ Inapplicable
312(a)................................................ 2.2(a)
312(b)................................................ 2.2(b)
313................................................... 2.3
314(a)................................................ 2.4
314(b)................................................ Inapplicable
314(c)................................................ 2.5
314(d)................................................ Inapplicable
314(f)................................................ Inapplicable
315(a)................................................ 3.9(b)
315(c)................................................ 3.9(a)
315(d)................................................ 3.9(b)
316(a)................................................ Annex I
316(c)................................................ 3.6(e)
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* This Cross-Reference table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
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DECLARATION OF TRUST
OF
CT CONVERTIBLE TRUST I
July 28, 1998
DECLARATION OF TRUST ("Declaration") dated and effective as of July 28,
1998, by the Trustees (as defined herein), the Sponsor (as defined herein) and
by the holders, from time to time, of undivided beneficial interests in the
Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established CT
Convertible Trust I (the "Trust"), a trust under the Business Trust Act (as
defined herein), pursuant to a Certificate of Trust filed with the Secretary of
State of the State of Delaware on July 28, 1998, for the sole purpose of issuing
and selling certain securities representing undivided beneficial interests in
the assets of the Trust and investing the proceeds thereof in certain Debentures
(as defined herein) of the Debenture Issuer (as defined herein);
WHEREAS, as of the date hereof, no interests in the Trust have been
issued; and
WHEREAS, all of the Trustees and the Sponsor desire to adopt this
Declaration;
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 constitutes 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 Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and Exhibits of
or to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or unless
the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
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"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent or Conversion Agent.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person.
"Business Day" means any day other than a Saturday, Sunday or any other
day on which banking institutions in New York, New York or Wilmington, Delaware
are permitted or required by any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code ss. 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, units representing interests, participations, rights in or other
equivalents (however designated) of such Person's capital stock, including, with
respect to partnerships and business trusts, partnership interests (whether
general or limited), beneficial interests and any other interest or
participation that confers upon a Person the right to receive a share of the
profits and losses of, or distributions of assets of, such partnership or
business trust, and any rights (other than debt securities convertible into
capital stock), warrants or options exchangeable for or convertible into such
capital stock.
"Certificate" means a Common Security Certificate or a Convertible
Preferred Security Certificate.
"Closing Date" means July 28, 1998.
"Closing Price" has the meaning specified in Annex I.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Securities Guarantee" means the guarantee agreement to be dated
as of July 28, 1998 of the Sponsor in respect of the Common Securities.
"Common Security" has the meaning specified in Section 7.1.
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"Common Shares" means the class A common shares of beneficial interest,
$1.00 par value, in Capital Trust, a California business trust, and any other
shares of beneficial interest as may constitute "Common Shares" under the
Indenture.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Conversion Agent" has the meaning specified in Section 7.4.
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"Convertible Preferred Securities Guarantee" means the guarantee
agreement to be dated as of July 28, 1998, of the Sponsor in respect of the
Convertible Preferred Securities.
"Convertible Preferred Security" has the meaning specified in Section
7.1.
"Convertible Preferred Security Certificate" means a certificate
representing a Preferred Security substantially in the form of Exhibit A-1.
"Corporate Trust Office" means the office of the Institutional Trustee
at which the corporate trust business of the Institutional Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at 1100 North Market Street, 9th Floor,
Wilmington, Delaware 19890-0001, Attention Corporate Trust Administration.
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Capital Trust, a California business trust, in
its capacity as issuer of the Debentures under the Indenture.
"Debenture Trustee" means Wilmington Trust Company, as trustee under
the Indenture until a successor is appointed thereunder, and thereafter means
such successor trustee.
"Debentures" means the series of Debentures in the aggregate principal
amount of $154,650,000 to be issued by the Debenture Issuer under the Indenture
to be held by the Institutional Trustee, a specimen certificate for such series
of Debentures being Exhibit B.
"Delaware Trustee" has the meaning set forth in Section 5.1.
"Direct Action" has the meaning set forth in Section 3.8.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.1.
"EOPLP" means EOP Operating Limited Partnership, a Delaware limited
partnership.
"Event of Default" in respect of the Securities means an Event of
Default (as defined in the Indenture) has occurred and is continuing in respect
of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Fiscal Year" has the meaning set forth in Section 11.1.
"GM Trusts" means Mellon Bank N.A., as trustee for General Motors
Corporation Hourly-Rate Employes Pension Trust, a New York trust, and Mellon
Bank N.A., as trustee for General Motors Salaried Employes Pension Trust, a New
York trust.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
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"Indemnified Person" means each Company Indemnified Person and each
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of July 28, 1998 between the
Debenture Issuer and the Debenture Trustee.
"Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in Section
3.8(c).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Annex I hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Liquidated Distribution" has the meaning specified in the terms of the
Securities as set forth in Annex I.
"List of Holders" has the meaning set forth in Section 2.2.
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Convertible Preferred Securities or by the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a single
class or, as the context may require, Holders of outstanding Convertible
Preferred Securities or Holders of outstanding Common Securities voting
separately as a class, who are the record owners of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of the
Securities as set forth in Annex I.
"Non-U.S. Person" means a Person other than a U.S. person (as such term
is defined in Regulation S).
"Offeror" has the meaning set forth in Section 9.1(e).
"Offered Securities" means the Convertible Preferred Securities, the
Convertible Preferred Securities Guarantee, the Debentures and the Common Shares
issuable upon conversion of the Debentures.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Certificate has read the
covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
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(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(h).
"Payment Amount" has the meaning set forth in Section 6.1.
"Person" means 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.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Quorum" means a majority of the Regular Trustees or, if there are only
two Regular Trustees, both of them.
"Paying Agent" has the meaning set forth in Section 3.8(h).
"Payment Amount" has the meaning set forth in Section 6.1.
"Regular Trustee" has the meaning set forth in Section 5.1.
"Regulation S" means Regulation S under the Securities Act or any
successor provision.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly-owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Institutional Trustee,
any officer within the Corporate Trust Office of the Institutional Trustee,
including any vice president, any assistant vice president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Institutional Trustee customarily performing
functions similar to those performed by any of the above-designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Restricted Security" has the meaning specified in Section 9.1(d).
"Rule 144A" means Rule 144A as promulgated under the Securities Act, or
any successor rule.
"Rule 144(k)" means Rule 144(k) as promulgated under the Securities
Act, or any successor rule.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act or any
successor rule.
"Sales Notice" has the meaning set forth in Section 9.1(e).
"Securities" means the Common Securities and the Convertible Preferred
Securities.
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"Securities Act" means the Securities Act of 1933, as amended from time
to time, or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee and the
Convertible Preferred Securities Guarantee.
"Securities Purchase Agreement" means the securities purchase
agreement, dated as of July __, 1997, by and between the Sponsor, the Trust and
the certain investors signatory thereto.
"Special Event" has the meaning set forth in Annex I hereto.
"Sponsor" or "Capital Trust" means Capital Trust, a California business
trust, or any successor entity in a merger, consolidation or amalgamation, in
its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section
5.6(b).
"Successor Entity" has the meaning set forth in Section 3.15(b)(i).
"Successor Securities" has the meaning set forth in Section 3.15(b).
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I hereto.
"Transfer Restriction Termination Date" means the earlier of the first
date on which (i) the Securities and any Common Shares issued or issuable upon
the conversion or exchange thereof (other than (A) Securities acquired by the
Trust or any Affiliate thereof and (B) Common Shares issued upon the conversion
or exchange of any Security described in clause (A) above) may be sold pursuant
to Rule 144(k) and (ii) all the Securities have been sold pursuant to an
effective registration statement.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Trust Property" means (i) the Debentures, (ii) any cash on deposit in,
or owing to, the Institutional Trustee Account and (iii) all proceeds and rights
in respect of the foregoing to be held by the Institutional Trustee pursuant to
the terms of this Declaration for the benefit of the Securityholders.
"25% in liquidation amount of the Securities" means, except as provided
in the terms of the Convertible Preferred Securities or by the Trust Indenture
Act, Holder(s) of outstanding Securities voting together as a single class or,
as the context may require, Holders of outstanding Convertible Preferred
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of 25% or more of the aggregate liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or
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otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all outstanding Securities of the relevant
class.
"VRLP" means Vornado Realty L.P., a Delaware limited partnership.
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. The Trust Indenture Act shall
be applicable to this Declaration except as otherwise set forth herein, as if
the Securities had been sold pursuant to an effective registration statement.
(b) The Institutional Trustee shall be the only Trustee which is a
Trustee for the purposes of the Trust Indenture Act.
(c) If, and to the extent that, any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by ss.ss. 310 to 317,
inclusive, of the Trust Indenture Act, such duties imposed under the Trust
Indenture Act shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2. Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Institutional Trustee (i) within 14 days after each record
date for payment of Distributions, a list in such form as the Institutional
Trustee may reasonably require of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, provided that, neither
the Sponsor nor the Regular Trustees on behalf of the Trust shall be obligated
to provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Institutional Trustee by the
Sponsor and the Regular Trustees on behalf of the Trust, and (ii) at any other
time, within 30 days of receipt by the Trust of a written request for a List of
Holders as of a date no more than 14 days before such List of Holders is given
to the Institutional Trustee. The Institutional Trustee shall preserve, in as
current a form as is reasonably practicable, all information contained in the
Lists of Holders given to it or which it receives in the capacity as Paying
Agent (if acting in such capacity), provided that, the Institutional Trustee may
destroy any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Institutional Trustee shall comply with its obligations under
ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Institutional Trustee.
Within 60 days after December 31 of each year, the Institutional
Trustee shall provide to the Holders of the Convertible Preferred Securities
such reports as are required by ss. 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by ss. 313 of the Trust Indenture Act. The
Institutional Trustee shall also comply with the requirements of ss. 313(d) of
the Trust Indenture Act.
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SECTION 2.4. Periodic Reports to Institutional Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such documents, reports and
information as required by ss. 314 (if any) and the compliance certificate
required by ss. 314 of the Trust Indenture Act in the form, in the manner and at
the times required by ss. 314 of the Trust Indenture Act.
Delivery of such reports, information and documents to the
Institutional Trustee is for informational purposes only and the Institutional
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Sponsor's compliance with any of its covenants hereunder
(as to which the Institutional Trustee is entitled to rely exclusively on
Officers' Certificates).
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in ss. 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to ss.
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6. Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of the Convertible
Preferred Securities may by vote on behalf of the Holders of all of the
Convertible Preferred Securities, waive any past Event of Default in respect of
the Convertible Preferred Securities and its consequences, provided that, if the
underlying Event of Default under the Indenture:
(i) is not waivable under the Indenture, the Event of
Default under this Declaration shall also not be
waivable; or
(ii) requires the consent or vote of greater than a
majority in principal amount of the holders of the
Debentures (a "Super Majority") to be waived under
the Indenture, the Event of Default under this
Declaration may only be waived by the vote of the
Holders of at least the proportion in liquidation
amount of the Convertible Preferred Securities that
the relevant Super Majority represents of the
aggregate principal amount of the Debentures
outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Convertible Preferred Securities arising therefrom shall be deemed to have been
cured, for every purpose of this Declaration, but no such waiver shall extend to
any subsequent or other default or an Event of Default with respect to the
Convertible Preferred Securities or impair any right consequent thereon. Any
waiver by the Holders of the Convertible Preferred Securities of an Event of
Default with respect to the Convertible Preferred Securities shall also be
deemed to constitute a waiver by the Holders of the Common Securities of any
such Event of Default with respect to the Common Securities for all purposes of
this Declaration without any further act, vote, or consent of the Holders of the
Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
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(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have
waived such Event of Default under this Declaration
as provided below in this Section 2.6(b), the Event
of Default under this Declaration shall also not be
waivable; or
(ii) requires the consent or vote of a Super Majority to
be waived, except where the Holders of the Common
Securities are deemed to have waived such Event of
Default under this Declaration as provided below in
this Section 2.6(b), the Event of Default under this
Declaration may only be waived by the vote of the
Holders of at least the proportion in liquidation
amount of the Common Securities that the relevant
Super Majority represents of the aggregate principal
amount of the Debentures outstanding;
provided further, that each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Securities and its consequences until all Events of Default with respect
to the Convertible Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Institutional Trustee shall act solely on behalf of
the Holders of the Convertible Preferred Securities and only the Holders of the
Convertible Preferred Securities will have the right to direct the Institutional
Trustee to act in accordance with the terms of the Securities. The foregoing
provisions of this Section 2.6(b) shall be in lieu of ss.ss. 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act and such ss.ss. 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act are hereby expressly excluded from this
Declaration and the Securities, as permitted by the Trust Indenture Act. Subject
to the foregoing provisions of this Section 2.6(b), upon such waiver, any such
default shall cease to exist and any Event of Default with respect to the Common
Securities arising therefrom shall be deemed to have been cured for every
purpose of this Declaration, but no such waiver shall extend to any subsequent
or other default or Event of Default with respect to the Common Securities or
impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee at the direction of the Holders of the Convertible
Preferred Securities, constitutes a waiver of the corresponding Event of Default
under this Declaration. The foregoing provisions of this Section 2.6(c) shall be
in lieu of ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B)
of the Trust Indenture Act is hereby expressly excluded from this Declaration
and the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7. Event of Default; Notice.
(a) The Institutional Trustee shall, within 90 days after the
occurrence of an Event of Default actually known to a Responsible Officer of the
Institutional Trustee, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all such defaults with respect to the
Securities unless such defaults have been cured before the giving of such notice
(the term "defaults" for the purposes of this Section 2.7(a) being hereby
defined to be an Event of Default as defined in the Indenture, not including any
periods of grace provided for therein and irrespective of the giving of any
notice provided therein); provided that, except for a default in the payment of
principal of (or premium, if any) or interest on any of the Debentures or in the
payment of any sinking fund installment established for the Debentures, the
Institutional Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Institutional Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities. Any such notice given pursuant to this Section 2.7(a)
shall state that an Event of Default under the Indenture also constitutes an
Event of Default under this Declaration.
(b) The Institutional Trustee shall not be deemed to have knowledge of
any default except:
(i) a default under Sections 5.1(a) and 5.1(b) of the
Indenture; or
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(ii) any default as to which the Institutional Trustee
shall have received written notice or of which a
Responsible Officer of the Institutional Trustee
charged with the administration of the Declaration
shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1. Name.
The Trust is named "CT Convertible Trust I" as such name may be
modified from time to time by the Regular Trustees following written notice to
the Holders of Securities. The Trust's activities may be conducted under the
name of the Trust or any other name deemed advisable by the Regular Trustees.
SECTION 3.2. Office.
The address of the principal office of the Trust is c/o Capital Trust,
605 Third Avenue, 26th Floor, New York, NY 10016. On at least ten Business Days
written notice to the Holders of Securities, the Regular Trustees may designate
another principal office.
SECTION 3.3. Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and
sell the Securities and use the proceeds from such sale to acquire the
Debentures, and (b) except as otherwise limited herein, to engage in only those
other activities necessary, or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, pledge any of
its assets, or otherwise undertake (or permit to be undertaken) any activity
that would cause the Trust not to be classified for United States federal income
tax purposes as a grantor trust.
SECTION 3.4. Authority.
(a) Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
(b) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.
(c) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6; and
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(d) A Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purposes of executing any documents which the Regular Trustees
have power and authority to cause the Trust to execute pursuant to Section 3.6.
SECTION 3.5. Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and
the Institutional Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The Holders
of Securities shall not have legal title to any part of the assets of the Trust,
but shall have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6. Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and authority
to cause the Trust to engage in the following activities:
(a) to issue and sell the Securities in accordance with this
Declaration; provided, however, that the Trust may issue no more than one series
of Convertible Preferred Securities and no more than one series of Common
Securities, and provided further, that there shall be no interests in the Trust
other than the Securities, and the issuance of Securities shall be limited to a
simultaneous issuance of both Convertible Preferred Securities and Common
Securities on the Closing Date;
(b) in connection with the issue and sale of the Securities, at the
direction of the Sponsor, to:
(i) execute and enter into the Securities Purchase
Agreement, and other related agreements providing for
the sale of the Securities; and
(ii) take all actions and perform such duties as may be
required of the Regular Trustees to open checking,
deposit or similar banking accounts as may be
necessary in connection with the issuance and sale of
the Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Convertible Preferred Securities and the Common Securities; provided, however,
that the Regular Trustees shall cause legal title to the Debentures to be held
of record in the name of the Institutional Trustee for the benefit of the
Holders of the Convertible Preferred Securities and the Holders of Common
Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written
notice of the occurrence of a Special Event; provided that the Regular Trustees
shall consult with the Sponsor and the Institutional Trustee before taking or
refraining from taking any Ministerial Action in relation to a Special Event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of ss. 316 (c) of the Trust Indenture Act, Distributions,
voting rights, redemptions and exchanges, and to issue relevant notices to the
Holders of Convertible Preferred Securities and Holders of Common Securities as
to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Institutional Trustee
has the exclusive power to bring such Legal Action;
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(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants, and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations, if any,
under the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be executed by
any Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry out any
of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar, transfer
agent, Paying Agent and Conversion Agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities of
any notice received from the Debenture Issuer of its election to defer payments
of interest on the Debentures by extending the interest payment period under the
Indenture;
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Convertible
Preferred Securities or to enable the Trust to effect the purposes for which the
Trust was created;
(p) to take any action, not inconsistent with this Declaration or with
applicable law, that the Regular Trustees determine in their discretion to be
necessary or desirable in carrying out the activities of the Trust as set out in
this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an
Investment Company required to be registered under
the Investment Company Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that
the Debentures will be treated as indebtedness of the
Debenture Issuer for United States federal income tax
purposes;
provided that such action does not adversely affect the interests of Holders or
vary the terms of the Convertible Preferred Securities;
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Regular Trustees, on behalf of the
Trust;
(r) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to Section 11.2 herein; and
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(s) to the extent provided in this Declaration, 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.
The Regular Trustees must exercise the powers set forth in this Section
3.6 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Regular Trustees shall not take any action that
is inconsistent with the purposes and functions of the Trust set forth in
Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Institutional Trustee set forth in Section
3.8.
Any expenses incurred by the Regular Trustees pursuant to this Section
3.6 shall be reimbursed by the Sponsor.
The Trust initially appoints the Institutional Trustee as transfer
agent and registrar for the Convertible Preferred Securities.
SECTION 3.7. Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the Institutional
Trustee) shall cause the Trust not to, engage in any activity other than as
required or authorized by this Declaration. In particular the Trust shall not
and the Trustees (including the Institutional Trustee) shall cause the Trust not
to:
(i) invest any proceeds received by the Trust from
holding the Debentures, but shall distribute all such
proceeds to Holders of Securities pursuant to the
terms of this Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than
loans represented by the Debentures;
(v) possess any power or otherwise act in such a way as
to vary the Trust assets or the terms of the
Securities in any way whatsoever except as permitted
by the terms of this Declaration;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust
other than the Securities; or
(vii) other than as provided in this Declaration or Annex I
hereto, (A) direct the time, method and place of
exercising any trust or power conferred upon the
Debenture Trustee with respect to the Debentures, (B)
waive any past default that is not waivable under the
Indenture, (C) exercise any right to rescind or annul
any declaration that the principal of all the
Debentures shall be due and payable, or (D) consent
to any amendment, modification or termination of the
Indenture or the Debentures where such consent shall
be required unless the Trust shall have received an
opinion of counsel to the effect that such
modification will not cause more than an
insubstantial risk that (x) the Trust will be deemed
an Investment Company required to be registered under
the Investment Company Act or (y) the Trust will not
be classified as a grantor trust for United States
federal income tax purposes.
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SECTION 3.8. Powers and Duties of the Institutional Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Institutional Trustee in trust for the benefit of the
Trust and the Holders of the Securities. The right, title and interest of the
Institutional Trustee to the Debentures shall vest automatically in each Person
who may hereafter be appointed as Institutional Trustee in accordance with
Section 5.6. Such vesting and cessation of title shall be effective whether or
not conveyancing documents with regard to the Debentures have been executed and
delivered.
(b) The Institutional Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest
bearing trust account (the "Institutional Trustee
Account") in the name of and under the exclusive
control of the Institutional Trustee on behalf of the
Holders of the Securities and, upon the receipt of
payments of funds made in respect of the Debentures
held by the Institutional Trustee, deposit such funds
into the Institutional Trustee Account and make
payments to the Holders of the Convertible Preferred
Securities and Holders of the Common Securities from
the Institutional Trustee Account in accordance with
Section 6.1. Funds in the Institutional Trustee
Account shall be held uninvested until disbursed in
accordance with this Declaration. The Institutional
Trustee Account shall be an account that is
maintained with a banking institution the rating on
whose long-term unsecured indebtedness is rated
investment grade by a "nationally recognized
statistical rating organization," as that term is
defined for purposes of Rule 436(g)(2) under the
Securities Act;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of
the Convertible Preferred Securities and the Common
Securities to the extent the Debentures are redeemed
or mature;
(iii) engage in such ministerial activities as shall be
necessary or appropriate to effect the distribution
of the Trust Property in accordance with the terms of
this Declaration; and
(iv) to the extent provided for in this Declaration, take
such ministerial actions necessary in connection with
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.
(d) The Institutional Trustee shall take all actions and perform such
duties as may be specifically required of the Institutional Trustee pursuant to
the terms of the Securities.
(e) The Institutional Trustee shall take any Legal Action which arises
out of, or in connection with, an Event of Default of which a Responsible
Officer of the Institutional Trustee has actual knowledge, or the Institutional
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act; provided however, that if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay interest or principal on the Debentures on the date such interest or
principal is otherwise payable (or in the case of redemption, on the redemption
date), then a Holder of Convertible Preferred Securities may directly institute
a proceeding for enforcement of payment to such Holder of the principal of or
interest on the Debentures having a principal amount equal to the aggregate
liquidation amount of the Convertible
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Preferred Securities of such Holder (a "Direct Action") on or after the
respective due date specified in the Debentures and provided, further, that if
the Institutional Trustee fails to enforce its rights under the Debentures, any
Holder of Convertible Preferred Securities may institute a legal proceeding
against any person to enforce the Institutional Trustee's rights under the
Debentures. In connection with such Direct Action, the rights of the Holders of
the Common Securities will be subrogated to the rights of such Holder of
Convertible Preferred Securities to the extent of any payment made by the
Debenture Issuer to such Holder of Convertible Preferred Securities in such
Direct Action. Except as provided in the preceding sentences, the Holders of
Convertible Preferred Securities will not be able to exercise directly any other
remedy available to the holders of the Debentures.
(f) The Institutional Trustee shall continue to serve as a Trustee
until either:
(i) the Trust has been completely liquidated and the
proceeds of the liquidation distributed to the
Holders of Securities pursuant to the terms of the
Securities; or
(ii) a Successor Institutional Trustee has been appointed
and has accepted that appointment in accordance with
Section 5.6.
(g) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer of
the Institutional Trustee occurs and is continuing, the Institutional Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debentures subject to the rights of the Holders pursuant to the
terms of such Securities.
(h) The Institutional Trustee may authorize one or more Persons (each,
a "Paying Agent") to pay Distributions, redemption payments or Liquidation
Distributions on behalf of the Trust with respect to all Securities and any such
Paying Agent shall comply with ss. 317(b) of the Trust Indenture Act. Any Paying
Agent may be removed by the Institutional Trustee at any time and a successor
Paying Agent or additional Paying Agents may be appointed at any time by the
Institutional Trustee.
(i) Subject to this Section 3.8, the Institutional Trustee shall have
none of the duties, liabilities, powers or the authority of the Regular Trustees
set forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9. Certain Duties and Responsibilities of the Institutional
Trustee.
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Institutional Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
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(i) prior to the occurrence of an Event of Default and
after the curing or waiving of all such Events of
Default that may have occurred:
(A) the duties and obligations of the Institutional
Trustee shall be determined solely by the express provisions
of this Declaration and the Institutional Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this Declaration,
and no implied covenants or obligations shall be read into
this Declaration against the Institutional Trustee; and
(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Institutional
Trustee and conforming to the requirements of this
Declaration; but in the case of any such certificates or
opinions that by any provision hereof are specifically
required to be furnished to the Institutional Trustee, the
Institutional Trustee shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Declaration;
(ii) the Institutional Trustee shall not be liable for any
error of judgment made in good faith by a Responsible
Officer of the Institutional Trustee, unless it shall
be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with
respect to any action taken or omitted to be taken by
it in good faith in accordance with the direction of
the Holders of not less than a Majority in
liquidation amount of the Securities relating to the
time, method and place of conducting any proceeding
for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred
upon the Institutional Trustee under this
Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds
or otherwise incur personal financial liability in
the performance of any of its duties or in the
exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that the
repayment of such funds or liability is not
reasonably assured to it under the terms of this
Declaration or indemnity reasonably satisfactory to
the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to
the custody, safe keeping and physical preservation
of the Debentures and the Institutional Trustee
Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals
with similar property for its own account, subject to
the protections and limitations on liability afforded
to the Institutional Trustee under this Declaration
and the Trust Indenture Act;
(vi) the Institutional Trustee shall have no duty or
liability for or with respect to the value,
genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments
levied thereon or in connection therewith;
(vii) the Institutional Trustee shall not be liable for any
interest on any money received by it except as it may
otherwise agree in writing with the Sponsor. Money
held by the Institutional Trustee need not be
segregated from other funds held by it except in
relation to the Institutional Trustee Account
maintained by the Institutional Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise
required by law; and
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(viii) the Institutional Trustee shall not be responsible
for monitoring the compliance by the Regular Trustees
or the Sponsor with their respective duties under
this Declaration, nor shall the Institutional Trustee
be liable for any default or misconduct of the
Regular Trustees or the Sponsor.
SECTION 3.10. Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and
shall be fully protected in acting or refraining from
acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or
document believed by it to be genuine and to have
been signed, sent or presented by the proper party or
parties;
(ii) any direction or act of the Sponsor or the Regular
Trustees contemplated by this Declaration shall be
sufficiently evidenced by an Officers' Certificate;
(iii) whenever in the administration of this Declaration,
the Institutional Trustee shall deem it desirable
that a matter be proved or established before taking,
suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is
herein specifically prescribed) may, in the absence
of bad faith on its part, request and conclusively
rely upon an Officers' Certificate which, upon
receipt of such request, shall be promptly delivered
by the Sponsor or the Regular Trustees;
(iv) the Institutional Trustee shall have no duty to see
to any recording, filing or registration of any
instrument (including any financing or continuation
statement or any filing under tax or securities laws)
or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel of
its selection or other experts and the advice or
opinion of such counsel and experts with respect to
legal matters or advice within the scope of such
experts' area of expertise shall be full and complete
authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion.
Such counsel may be counsel to the Sponsor or any of
its Affiliates, and may include any of its employees.
The Institutional Trustee shall have the right at any
time to seek instructions concerning the
administration of this Declaration from any court of
competent jurisdiction;
(vi) the Institutional Trustee shall be under no
obligation to exercise any of the rights or powers
vested in it by this Declaration at the request or
direction of any Holder, unless such Holder shall
have provided to the Institutional Trustee security
and indemnity, reasonably satisfactory to the
Institutional Trustee, against the costs, expenses
(including attorneys' fees and expenses and the
expenses of the Institutional Trustee's agents,
nominees or custodians) and liabilities that might be
incurred by it in complying with such request or
direction, including such reasonable advances as may
be requested by the Institutional Trustee provided,
that, nothing contained in this Section 3.10(a)(vi)
shall be taken to (a) require the Holders of
Convertible Preferred Securities to offer such
indemnity in the event such Holders direct the
Institutional Trustee to take any action it is
empowered to take under this Declaration following an
Event of Default or (b) relieve the Institutional
Trustee, upon the occurrence of an
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Event of Default, of its obligation to exercise the
rights and powers vested in it by this Declaration;
(vii) the Institutional Trustee shall not be bound to make
any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the
Institutional Trustee, in its discretion, may make
such further inquiry or investigation into such facts
or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the
trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents,
custodians, nominees or attorneys and the
Institutional Trustee shall not be responsible for
any misconduct or negligence on the part of any agent
or attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its
agents hereunder shall bind the Trust and the Holders
of the Securities, and the signature of the
Institutional Trustee or its agents alone shall be
sufficient and effective to perform any such action
and no third party shall be required to inquire as to
the authority of the Institutional Trustee to so act
or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall
be conclusively evidenced by the Institutional
Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration
the Institutional Trustee shall deem it desirable to
receive written instructions with respect to
enforcing any remedy or right or taking any other
action hereunder, the Institutional Trustee (i) may
request written instructions from the Holders of the
Securities which instructions may only be given by
the Holders of the same proportion in liquidation
amount of the Securities as would be entitled to
direct the Institutional Trustee under the terms of
the Securities in respect of such remedy, right or
action, (ii) may refrain from enforcing such remedy
or right or taking such other action until such
instructions are received, and (iii) shall be
protected in conclusively relying on or acting in
accordance with such instructions;
(xi) except as otherwise expressly provided by this
Declaration, the Institutional Trustee shall not be
under any obligation to take any action that is
discretionary under the provisions of this
Declaration; and
(xii) the Institutional Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it
in good faith and reasonably believed by it to be
authorized or within the discretion or rights or
powers conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose any duty
or obligation on the Institutional Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
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SECTION 3.11. Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees, the Institutional Trustee or the Trustees generally
(except as may be required under the Business Trust Act) described in this
Declaration. Except as set forth in Section 5.2, the Delaware Trustee shall be a
Trustee for the sole and limited purpose of fulfilling the requirements of ss.
3807 of the Business Trust Act.
SECTION 3.12. Execution of Documents.
Except as otherwise required by the Business Trust Act, any Regular
Trustee is authorized to execute on behalf of the Trust any documents that the
Regular Trustees have the power and authority to execute pursuant to Section
3.6.
SECTION 3.13. Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14. Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article VIII
hereof, shall have existence for twenty-five (25) years from July 28, 1998.
SECTION 3.15. Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any corporation or other body,
except as described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the
Institutional Trustee, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any State; provided that
(i) such successor entity (the "Successor Entity")
either:
(A) expressly assumes all of the obligations of the
Trust under the Securities; or
(B) substitutes for the Convertible Preferred
Securities other securities having substantially the same
terms as the Convertible Preferred Securities (the "Successor
Securities") so long as the Successor Securities rank the same
as the Convertible Preferred Securities rank with respect to
Distributions and payments upon liquidation, redemption and
otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee
of the Successor Entity that possesses the same
powers and duties as the Institutional Trustee as the
Holder of the Debentures;
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(iii) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights,
preferences and privileges of the Holders of the
Securities (including any Successor Securities) in
any material respect (other than with respect to any
dilution of the Holders' interest in the Successor
Entity);
(iv) such Successor Entity has a purpose identical to that
of the Trust;
(v) such Successor Entity has assets identical to that of
the Trust;
(vi) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of
nationally recognized independent counsel to the
Trust experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences
and privileges of the Holders of the Securities (including any
Successor Securities) in any material respect (other than with
respect to any dilution of the Holders' interest in the
Successor Entity);
(B) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor the
Successor Entity will be required to register as an Investment
Company; and
(C) following such merger, consolidation,
amalgamation or replacement, the Trust (or such Successor
Entity) will continue to be classified as a grantor trust for
United States federal income tax purposes; and
(vii) the Sponsor guarantees the obligations of the
Successor Entity under the Successor Securities at
least to the extent provided by the Securities
Guarantees.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it, if such consolidation, amalgamation, merger or replacement would
cause the Trust or the Successor Entity to be classified as other than a grantor
trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1. Sponsor's Purchase of Common Securities.
On the Closing Date the Sponsor will purchase all of the Common
Securities issued by the Trust, in an amount at least equal to 3% of the capital
of the Trust, at the same time as the Convertible Preferred Securities are sold.
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SECTION 4.2. Responsibilities of the Sponsor.
In connection with the issue and sale of the Convertible Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Convertible Preferred Securities
and to do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for execution
and filing any documents to be executed and filed by the Trust, as the Sponsor
deems necessary or advisable in order to comply with the applicable laws of any
such States; and
(b) to negotiate the terms of the Securities Purchase Agreement
providing for the purchase of the Convertible Preferred Securities.
ARTICLE V
TRUSTEES
SECTION 5.1. Number of Trustees.
The number of Trustees initially shall be four (4), and:
(a) at any time before the issuance of any Securities, the Sponsor may,
by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the Holders of a Majority in liquidation
amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities; provided, however, that the number of Trustees shall in
no event be less than two (2); provided further, that (i) one Trustee, in the
case of a natural person, shall be a person who is a resident of the State of
Delaware or that, if not a natural person, is an entity which has its principal
place of business in the State of Delaware (the "Delaware Trustee"); (ii) there
shall be at least one Trustee who is an employee or officer of, or is affiliated
with the Sponsor (a "Regular Trustee"); and (iii) one Trustee shall be the
Institutional Trustee, and such Trustee may also serve as Delaware Trustee if it
meets the applicable requirements.
SECTION 5.2. Delaware Trustee.
If required by the Business Trust Act, one Trustee shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place of
business in the State of Delaware, and otherwise meets the requirements of
applicable law;
provided that, if the Institutional Trustee has its principal place of business
in the State of Delaware and otherwise meets the requirements of applicable law,
then the Institutional Trustee shall also be the Delaware Trustee and Section
3.11 shall have no application.
The Initial Delaware Trustee shall be: Wilmington Trust Company.
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SECTION 5.3. Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under
the laws of the United States of America or any State
or Territory thereof or of the District of Columbia,
or a corporation or Person permitted by the
Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws
to exercise corporate trust powers, having a combined
capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or
examination by federal, state, territorial or
District of Columbia authority. If such corporation
publishes reports of condition at least annually,
pursuant to law or to the requirements of the
supervising or examining authority referred to above,
then for the purposes of this Section 5.3(a)(ii), the
combined capital and surplus of such corporation
shall be deemed to be its combined capital and
surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Institutional Trustee shall cease to be eligible
to so act under Section 5.3(a), the Institutional Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.6(c).
(c) If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of ss. 310(b) of the Trust Indenture Act, the
Institutional Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in ss. 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of ss. 310(b) of the Trust Indenture Act.
(d) The Convertible Preferred Securities Guarantee shall be deemed to
be specifically described in this Declaration for purposes of clause (i) of the
first provision contained in ss. 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be: Wilmington Trust
Company.
SECTION 5.4. Certain Qualifications of Regular Trustees and Delaware
Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the Institutional
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
SECTION 5.5. Regular Trustees.
The initial Regular Trustees shall be:
John R. Klopp
Sheli Z. Rosenberg
(a) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.
(i) Unless otherwise determined by the Regular Trustees,
and except as otherwise required by the Business
Trust Act or applicable law, any Regular Trustee is
authorized to execute on behalf of the Trust any
documents which the Regular Trustees have the power
and authority to cause the Trust to execute pursuant
to Section 3.6.
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SECTION 5.6. Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the
Holders of a Majority in liquidation amount of the
Common Securities voting as a class at a meeting of
the Holders of the Common Securities.
(b) (i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.6(a) until a Successor Institutional
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Institutional Trustee and delivered to the
Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not
be removed in accordance with Section 5.6(a) until a
successor Trustee possessing the qualifications to
act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and
has accepted such appointment by written instrument
executed by such Successor Delaware Trustee and
delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, removal or resignation. Any
Trustee may resign from office (without need for prior or subsequent accounting)
by an instrument in writing signed by the Trustee and delivered to the Sponsor
and the Trust, which resignation shall take effect upon such delivery or upon
such later date as is specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been
appointed and has accepted such appointment by instrument
executed by such Successor Institutional Trustee and delivered
to the Trust, the Sponsor and the resigning Institutional
Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed to
the holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor
Delaware Trustee has been appointed and has accepted
such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the
Trust, the Sponsor and the resigning Delaware
Trustee.
(d) the Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Delaware Trustee or Successor Institutional
Trustee as the case may be if the Institutional Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 5.6.
(e) If no Successor Institutional Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.6 within 60 days after delivery of an instrument of resignation or removal,
the Institutional Trustee or Delaware Trustee resigning or being removed, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Institutional Trustee or
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Successor Delaware Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper and prescribe, appoint a Successor
Institutional Trustee or Successor Delaware Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable for
the acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.7. Vacancies Among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.6.
SECTION 5.8. Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee in accordance with Section 5.6, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
SECTION 5.9. Meetings.
If there is more than one Regular trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand-delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustee or any committee thereof shall be hand-delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Regular Trustees. In the event there is only one Regular
Trustee, any and all action of such Regular Trustee shall be evidenced by a
written consent of such Regular Trustee.
SECTION 5.10. Delegation of Power.
A Regular Trustee may, by power of attorney consistent with applicable
law, delegate to any other natural person over the age of 21 his or her power
for the purposes of executing any documents contemplated in Section 3.6.
The Regular Trustees shall have power to delegate from time to time to
such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Regular Trustees or otherwise as the Regular Trustees may deem expedient,
to the
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extent such delegation is not prohibited by applicable law or contrary to the
provisions of the Trust, as set forth herein.
SECTION 5.11. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1. Distributions.
Holders of Securities shall receive Distributions (as defined herein)
in accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Convertible Preferred Securities and the
Common Securities in accordance with the preferences set forth in their
respective terms. If and to the extent that the Debenture Issuer makes a payment
of interest (including Compound Interest (as defined in the Indenture) and
Additional Sums (as defined in the Indenture)), premium and/or principal on the
Debentures held by the Institutional Trustee (the amount of any such payment
being a "Payment Amount"), the Institutional Trustee shall and is directed, to
the extent funds are available for that purpose, to make a distribution (a
"Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1. General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue one class
of convertible preferred securities representing undivided beneficial interests
in the assets of the Trust having such terms as are set forth in Annex I (the
"Convertible Preferred Securities") and one class of convertible common
securities representing undivided beneficial interests in the assets of the
Trust having such terms as are set forth in Annex I (the "Common Securities").
The Trust shall issue no securities or other interests in the assets of the
Trust other than the Convertible Preferred Securities and the Common Securities.
(b) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
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(d) Every Person, by virtue of having become a Holder in accordance
with the terms of this Declaration, shall be deemed to have expressly assented
and agreed to the terms of and shall be bound by this Declaration.
SECTION 7.2. Execution and Authentication.
(a) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. In case any Regular Trustee of the Trust who shall have signed
any of the Securities shall cease to be such Regular Trustee before the
Certificates so signed shall be delivered by the Trust, such Certificates
nevertheless may be delivered as though the person who signed such Certificates
had not ceased to be such Regular Trustee; and any Certificate may be signed on
behalf of the Trust by such persons who, at the actual date of execution of such
Security, shall be the Regular Trustees of the Trust, although at the date of
the execution and delivery of the Declaration any such person was not such a
Regular Trustee.
(b) One Regular Trustee shall sign the Convertible Preferred Securities
for the Trust by manual or facsimile signature. Unless otherwise determined by
the Trust, such signature shall, in the case of Common Securities, be a manual
signature.
A Convertible Preferred Security shall not be valid until authenticated
by the manual signature of an authorized signatory of the Institutional Trustee.
The signature shall be conclusive evidence that the Convertible Preferred
Security has been authenticated under this Declaration.
Upon a written order of the Trust signed by one Regular Trustee, the
Institutional Trustee shall authenticate the Convertible Preferred Securities
for original issue.
The Institutional Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Convertible Preferred Securities. An
authenticating agent may authenticate Convertible Preferred Securities whenever
the Institutional Trustee may do so. Each reference in this Declaration to
authentication by the Institutional Trustee includes authentication by such
agent. An authenticating agent has the same rights as the Institutional Trustee
to deal with the Company or an Affiliate.
SECTION 7.3. Form and Dating.
The Convertible Preferred Securities and the Institutional Trustee's
certificate of authentication shall be substantially in the form of Exhibit A-1
and the Common Securities shall be substantially in the form of Exhibit A-2,
each of which is hereby incorporated in and expressly made a part of this
Declaration. Certificates may be printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the Regular
Trustees, as evidenced by their execution thereof. The Securities may have
letters, numbers, notations, other marks of identification or designation or
other changes or additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice and such legends or endorsements required by
law, stock exchange rule and agreements to which the Trust is subject, if any
(provided that any such notation, legend or endorsement is in a form acceptable
to the Trust). The Trust at the direction of the Sponsor shall furnish any such
legend not contained in Exhibit A-1 to the Institutional Trustee in writing.
Each Convertible Preferred Security Certificate shall be dated the date of its
authentication. The terms and provisions of the Securities set forth in Annex I
and the forms of Securities set forth in Exhibits A-1 and A-2 are part of the
terms of this Declaration and, to the extent applicable, the Institutional
Trustee and the Sponsor, by their execution and delivery of this Declaration,
expressly agree to such terms and provisions and to be bound thereby.
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SECTION 7.4. Paying Agent.
The Trust shall maintain in the Borough of Manhattan, City of New York,
State of New York, an office or agency where Convertible Preferred Securities
may be presented for payment ("Paying Agent"). The Trust shall maintain an
office or agency where Securities may be presented for conversion ("Conversion
Agent"). The Trust may appoint the Paying Agent and the Conversion Agent and may
appoint one or more additional paying agents and one or more additional
conversion agents in such other locations as it shall determine. The term
"Paying Agent" includes any additional paying agent and the term "Conversion
Agent" includes any additional conversion agent. The Trust may change any Paying
Agent or Conversion Agent without prior notice to any Holder. The Trust shall
notify the Institutional Trustee in writing of the name and address of any Agent
not a party to this Declaration. If the Trust fails to appoint or maintain
another entity as Paying Agent or Conversion Agent, the Institutional Trustee
shall act as such. The Trust or any of its Affiliates may act as Paying Agent or
Conversion Agent. The Trust shall act as Paying Agent and Conversion Agent for
the Common Securities.
The Trust initially appoints Wilmington Trust Company, c/o Corporate
Trust Administration, 1100 North Market Street, Wilmington, Delaware 19810-0001,
as Paying Agent and Conversion Agent for the Convertible Preferred Securities.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1. Termination of Trust.
(a) The Trust shall terminate:
(i) upon the bankruptcy of the Sponsor or the Holder of
the Common Securities;
(ii) upon the filing of a certificate of dissolution or
its equivalent with respect to the Sponsor or the
Holder of the Common Securities; the filing of a
certificate of cancellation with respect to the Trust
after having obtained the consent of at least a
Majority in liquidation amount of the Securities
voting together as a single class to file such
certificate of cancellation; or the revocation of the
Sponsor's charter or the charter of the Holder of the
Common Securities and the expiration of 90 days after
the date of revocation without a reinstatement
thereof;
(iii) upon the entry of a decree of judicial dissolution of
the Sponsor, the Trust or the Holder of the Common
Securities;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption
thereof shall have been paid to the Holders in
accordance with the terms of the Securities;
(v) upon the occurrence and continuation of a Special
Event pursuant to which the Trust shall have been
dissolved in accordance with the terms of the
Securities and all of the Debentures held by the
Institutional Trustee shall have been distributed to
the Holders of Securities in exchange for all of the
Securities;
(vi) upon the written direction to the Institutional
Trustee from the Sponsor at any time to terminate the
Trust and, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law,
the distribution of Debentures to Holders in exchange
for
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the Securities, subject to the Regular Trustees'
receipt of an opinion of nationally recognized
independent counsel experienced in such matters to
the effect that the holders of the Convertible
Preferred Securities will not recognize any income,
gain or loss for United States federal income tax
purposes as a result of the dissolution of the Trust
and such distribution to Holders;
(vii) upon the distribution of the Sponsor's Common Shares
to all Holders of Convertible Preferred Securities
upon conversion of all outstanding Convertible
Preferred Securities;
(viii) the expiration of the term of the Trust on July 28,
2023; or
(ix) before the issuance of any Securities, with the
consent of all of the Regular Trustees and the
Sponsor.
(b) As soon as is practicable after the occurrence of an event referred
to in Section 8.1(a), the Trustees shall file a certificate of cancellation with
the Secretary of State of the State of Delaware.
(c) The provisions of Sections 3.9 and 3.10 and Article X shall survive
the termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1. Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Convertible Preferred Securities shall
be transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party may
only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided, that, any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States
federal income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company required to
register under the Investment Company Act or the
transferee would become an Investment Company
required to register under the Investment Company
Act.
(d) Each Security that bears or is required to bear the legend set
forth in this Section 9.1(d) (a "Restricted Security") shall be subject to the
restrictions on transfer provided in the legend set forth in this Section
9.1(d), unless such restrictions on transfer shall be waived by the written
consent of the Regular Trustees, and the Holder of each Restricted Security, by
such securityholder's acceptance thereof, agrees to be bound by such
restrictions on transfer. As used in this Section 9.1(d) and in Section 9.1(e),
the term "transfer" encompasses any sale, pledge, transfer or other disposition
of any Restricted Security.
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Prior to the Transfer Restriction Termination Date, any certificate
evidencing a Security shall bear a legend in substantially the following form,
unless otherwise agreed by the Regular Trustees (with written notice thereof to
the Institutional Trustee):
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR
(C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION) RESELL OR OTHERWISE
TRANSFER THE SECURITY EVIDENCED HEREBY OR THE COMMON SHARES, ISSUABLE UPON
CONVERSION OR EXCHANGE OF THIS SECURITY EXCEPT (A) TO CAPITAL TRUST (THE
"COMPANY") OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (C) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE FOR
THE CONVERTIBLE PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE
MAY BE (OR, IF THIS CERTIFICATE EVIDENCES COMMON SHARES, THE TRANSFER AGENT FOR
THE COMMON SHARES), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED
HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR TRANSFER
AGENT), (E) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT OR (F) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THE SECURITY EVIDENCED HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE FOR THE CONVERTIBLE
PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE MAY BE (OR, IF
THIS CERTIFICATE EVIDENCES COMMON SHARES, SUCH HOLDER MUST FURNISH TO THE
TRANSFER AGENT SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE
COMPANY OR CT CONVERTIBLE TRUST I ("THE TRUST") MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT). IF THIS CERTIFICATE DOES NOT EVIDENCE COMMON SHARES AND IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A
U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE FOR
THE CONVERTIBLE PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE
MAY BE, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY
OR THE TRUST MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED
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AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY
EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Following the Transfer Restriction Termination Date, any Security or
security issued in exchange or substitution therefor (other than (i) Securities
acquired by Capital Trust or any Affiliate and (ii) Common Shares issued upon
the conversion or exchange of any Security described in clause (i) above) may
upon surrender of such Security for exchange to any Regular Trustee on behalf of
the Trust in accordance with the provisions of Section 9.2, be exchanged for a
new Security or Securities, of like tenor and aggregate liquidation amount,
which shall not bear the restrictive legend required by this Section 9.1(d).
Any Convertible Preferred Security or Common Shares issued upon the
conversion or exchange of a Convertible Preferred Security that, prior to the
Transfer Restriction Termination Date, is purchased or owned by the Company or
any Affiliate thereof may not be resold by the Company or such Affiliate unless
registered under the Securities Act or resold pursuant to an exemption from the
registration requirements of the Securities Act in a transaction which results
in such Convertible Preferred Securities or Common Shares, as the case may be,
no longer being "restricted securities" (as defined under Rule 144).
(e) Each Convertible Preferred Security shall be subject to the
restrictions on transfer provided in this Section 9.1(e).
(i) If a holder of Convertible Preferred Securities (the
"Offeror") desires to sell, assign, transfer, encumber, or otherwise
dispose of any of his Convertible Preferred Securities, he shall give
written notice to Capital Trust of his desire to do so and of the price
per security and other terms under which he proposes to dispose of his
Convertible Preferred Securities (the "Sales Notice"), which Sales
Notice shall constitute an offer on the part of the Offeror to sell to
Capital Trust any such Convertible Preferred Securities upon the terms
and conditions set forth in such notice.
(ii) Unless, within ten (10) days after the giving of the
Sales Notice by the Offeror pursuant to subparagraph (i) of this
Section 9.1(e), Capital Trust shall give written notice to the Offeror
that Capital Trust irrevocably commits to purchase the Convertible
Preferred Securities subject of the Sale Notice at the price and under
the terms specified in the Sales Notice given by the Offeror, Capital
Trust shall be deemed to have rejected the offer of the Offeror to sell
the Convertible Preferred Securities subject of the Sale Notice and the
Offeror shall be free without restriction under this Section 9.1(e) to
sell the Convertible Preferred Securities subject of the Sales Notice
to any other Person, provided however, if the price per security is
less than 90% of the price and the other terms are more favorable than
those contained in the Sales Notice, the Offeror shall again offer to
sell the Convertible Preferred Securities in accordance with the
provisions of subparagraph (i) of this Section 9.1(e) before it may
complete any such sale and provided further, that the Convertible
Preferred Securities subject of the Sales Notice shall again be subject
to the provisions of subparagraph (i) of this Section 9.1(e) if within
ninety (90) days after the giving of the Sales Notice, the Offeror
shall not have completed the disposition of such Convertible
Debentures.
(iii) If Capital Trust irrevocably commits to purchase the
Convertible Preferred Securities as contemplated by subparagraph (ii)
of this Section 9.1(e), the closing of such purchase shall take place
at the principal place of business of Capital Trust at 10:00 A.M. (New
York City time) on the third (3rd) day following the expiration of the
ten (10) day period referred to subparagraph (ii) of this Section
9.1(e), or if such day is not a Business Day, then the next day that is
a Business Day.
The provisions of this Section 9.1(e) shall not apply to one or more
transfers of Convertible Preferred Securities (i) by the GM Trusts to one or
more trusts for the benefit of the employees of General Motors
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Corporation and its Affiliates, (ii) by VRLP to Vornado Operating Inc. or any
Affiliate or subsidiary thereof or to any entity in which VRLP holds, directly
or indirectly, an economic interest of greater than 50% or (iii) by EOPLP to any
EOP sponsored "Paper Clip" enterprise or any Affiliate or subsidiary thereof or
to any entity in which EOPLP holds, directly or indirectly, an economic interest
of greater than 50%.
SECTION 9.2. Transfer of Certificates.
The Regular Trustees shall provide for the registration of Certificates
and of transfers of Certificates, which will be effected without charge, but
only upon payment in respect of any tax or other government charges that may be
imposed in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.3. Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall
be registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 9.4. Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Institutional Trustee or the
Regular Trustees such security or indemnity as may be required by them to keep
each of them harmless;
then:
in the absence of notice that such Certificate shall have been acquired
by a bona fide purchaser, the Institutional Trustee or any Regular Trustee on
behalf of the Trust shall execute and deliver, in exchange for, or in lieu of,
any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like denomination. In connection with the issuance of any new Certificate under
this Section 9.4, the Institutional Trustee or the Regular Trustees may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection therewith. Any duplicate Certificate issued
pursuant to this Section shall constitute conclusive evidence of an ownership
interest in the relevant Securities, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
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ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS
SECTION 10.1. Liability.
(a) Except as expressly set forth in this Declaration, the Securities
Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of
the capital contributions (or any return thereon) of
the Holders of the Securities which shall be made
solely from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust
or otherwise.
(b) The Holder of the Common Securities shall be liable for all of the
debts and obligations of the Trust (other than amounts due on the Securities
subject to the Preferred Guarantee) to the extent not satisfied out of the
Trust's assets.
(c) Pursuant to ss. 3803(a) of the Business Trust Act, the Holders of
the Convertible Preferred Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
SECTION 10.2. Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 10.3. Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
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(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between any Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an
Indemnified Person shall act in a manner that is, or
provides terms that are, fair and reasonable to the
Trust or any Holder of Securities, the Indemnified
Person shall resolve such conflict of interest, take
such action or provide such terms, considering in
each case the relative interest of each party
(including its own interest) to such conflict,
agreement, transaction or situation and the benefits
and burdens relating to such interests, any customary
or accepted industry practices, and any applicable
generally accepted accounting practices or
principles. In the absence of bad faith by the
Indemnified Person, the resolution, action or term so
made, taken or provided by the Indemnified Person
shall not constitute a breach of this Declaration or
any other agreement contemplated herein or of any
duty or obligation of the Indemnified Person at law
or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled
to consider such interests and factors as it desires,
including its own interests, and shall have no duty
or obligation to give any consideration to any
interest of or factors affecting the Trust or any
other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such
express standard and shall not be subject to any
other or different standard imposed by this
Declaration or by applicable law.
SECTION 10.4. Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the full
extent permitted by law, any Company Indemnified
Person who was or is a party or is threatened to be
made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action
by or in the right of the Trust) by reason of the
fact that he is or was a Company Indemnified Person
against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in
good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a
presumption that the Company Indemnified Person did
not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the
best interests of the Trust, and, with respect to any
criminal action or proceeding, had no reasonable
cause to believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full
extent permitted by law, any Company Indemnified
Person who was or is a party or is threatened to be
made a party to any threatened, pending or completed
action or suit by or in the right of the
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Trust to procure a judgment in its favor by reason of
the fact that he is or was a Company Indemnified
Person against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection
with the defense or settlement of such action or suit
if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the
best interests of the Trust and except that no such
indemnification shall be made in respect of any
claim, issue or matter as to which such Company
Indemnified Person shall have been adjudged to be
liable to the Trust unless and only to the extent
that the Court of Chancery of Delaware or the court
in which such action or suit was brought shall
determine upon application that, despite the
adjudication of liability but in view of all the
circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses
which such Court of Chancery or such other court
shall deem proper.
(iii) To the extent that a Company Indemnified Person shall
be successful on the merits or otherwise (including
dismissal of an action without prejudice or the
settlement of an action without admission of
liability) in defense of any action, suit or
proceeding referred to in paragraphs (i) and (ii) of
this Section 10.4(a), or in defense of any claim,
issue or matter therein, he shall be indemnified, to
the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of
this Section 10.4(a) (unless ordered by a court)
shall be made by the Debenture Issuer only as
authorized in the specific case upon a determination
that indemnification of the Company Indemnified
Person is proper in the circumstances because he has
met the applicable standard of conduct set forth in
paragraphs (i) or (ii). Such determination shall be
made (1) by the Regular Trustees by a majority vote
of a quorum consisting of such Regular Trustees who
were not parties to such action, suit or proceeding,
(2) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Regular
Trustees so directs, by independent legal counsel in
a written opinion, or (3) by the Common Security
Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a
Company Indemnified Person in defending a civil,
criminal, administrative or investigative action,
suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall be paid by the
Debenture Issuer in advance of the final disposition
of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Company
Indemnified Person to repay such amount if it shall
ultimately be determined that he is not entitled to
be indemnified by the Debenture Issuer as authorized
in this Section 10.4(a). Notwithstanding the
foregoing, no advance shall be made by the Debenture
Issuer if a determination is reasonably and promptly
made (i) by the Regular Trustees by a majority vote
of a quorum of disinterested Regular Trustees, (ii)
if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Regular
Trustees so directs, by independent legal counsel in
a written opinion or (iii) by the Common Security
Holder of the Trust, that, based upon the facts known
to the Regular Trustees, counsel or the Common
Security Holder at the time such determination is
made, such Company Indemnified Person acted in bad
faith or in a manner that such person did not believe
to be in or not opposed to the best interests of the
Trust, or, with respect to any criminal proceeding,
that such Company Indemnified Person believed or had
reasonable cause to believe his conduct was unlawful.
In no event shall any advance be made in instances
where the Regular Trustees, independent legal counsel
or Common Security Holder reasonably determine that
such person
727341.10
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deliberately breached his duty to the Trust or its
Common or Convertible Preferred Security Holders.
(vi) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other
paragraphs of this Section 10.4(a) shall not be
deemed exclusive of any other rights to which those
seeking indemnification and advancement of expenses
may be entitled under any agreement, vote of
stockholders or disinterested directors of the
Debenture Issuer or Convertible Preferred Security
Holders of the Trust or otherwise, both as to action
in his official capacity and as to action in another
capacity while holding such office. All rights to
indemnification under this Section 10.4(a) shall be
deemed to be provided by a contract between the
Debenture Issuer and each Company Indemnified Person
who serves in such capacity at any time while this
Section 10.4(a) is in effect. Any repeal or
modification of this Section 10.4(a) shall not affect
any rights or obligations then existing.
(vii) The Debenture Issuer or the Trust may purchase and
maintain insurance on behalf of any person who is or
was a Company Indemnified Person against any
liability asserted against him and incurred by him in
any such capacity, or arising out of his status as
such, whether or not the Debenture Issuer would have
the power to indemnify him against such liability
under the provisions of this Section 10.4(a)
(viii) For purposes of this Section 10.4(a), references to
"the Trust" shall include, in addition to the
resulting or surviving entity, any constituent entity
(including any constituent of a constituent) absorbed
in a consolidation or merger, so that any person who
is or was a director, trustee, officer or employee of
such constituent entity, or is or was serving at the
request of such constituent entity as a director,
trustee, officer, employee or agent of another
entity, shall stand in the same position under the
provisions of this Section 10.4(a) with respect to
the resulting or surviving entity as he would have
with respect to such constituent entity if its
separate existence had continued.
(ix) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section
10.4(a) shall, unless otherwise provided when
authorized or ratified, continue as to a person who
has ceased to be a Company Indemnified Person and
shall inure to the benefit of the heirs, executors
and administrators of such a person.
(b) The Debenture Issuer agrees to indemnify the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Institutional
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee and the Delaware Trustee (each
of the Persons in (i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person harmless against,
any loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration or
the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against or investigating
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder. The provisions of this Section 10.4(b) shall
survive the satisfaction and discharge of this Declaration or the resignation or
removal of the Institutional Trustee or the Delaware Trustee, as the case may
be.
SECTION 10.5. Outside Business.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar
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or dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Covered Person, the Delaware
Trustee and the Institutional Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the Sponsor,
or may act as depositary for, trustee or agent for, or act on any committee or
body of holders of, securities or other obligations of the Sponsor or its
Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1. Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the same as the
fiscal year of the Sponsor.
SECTION 11.2. Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books, records and supporting
documents, which shall reflect in detail each transaction of the Trust. The
books of account shall be maintained on the accrual method of accounting in
compliance with generally accepted accounting principles, consistently applied.
The Trust shall use the accrual method of accounting for United States federal
income tax purposes. The books of account and the records of the Trust shall be
audited by and reported upon as of the end of each Fiscal Year of the Trust by a
firm of independent certified public accountants selected by the Regular
Trustees.
(b) The Sponsor shall cause to be prepared and delivered to each of the
Holders of Securities, within 90 days after the end of each Fiscal Year of the
Sponsor, annual financial statements of the Sponsor, including a balance sheet
of the Sponsor as of the end of such Fiscal Year, and the related statements of
income or loss.
(c) The Regular Trustees shall cause to be duly prepared and delivered
to each of the Holders of Securities, any annual United States federal income
tax information statement required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall use reasonable best
efforts to deliver all such statements within 90 days after the end of each
Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and timely
filed with the appropriate taxing authority an annual United States federal
income tax return, on a Form 1041 or such other form required by United States
federal income tax law, and any other annual income tax returns required to be
filed by the Regular Trustees on behalf of the Trust with any state or local
taxing authority.
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SECTION 11.3. Banking.
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Institutional Trustee shall be made
directly to the Institutional Trustee Account and no other funds of the Trust
shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by the Regular Trustees; provided,
however, that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.
SECTION 11.4. Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed over-withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding. Furthermore, if withholding is imposed on
payments of interest on the Debentures, to the extent such withholding is
attributable to ownership by a specific Holder of Convertible Preferred
Securities, the amount withheld shall be deemed a distribution in the amount of
the withholding to such specific Holder.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1. Amendments.
Except as otherwise provided in this Declaration or by any applicable
terms of the Securities,
(a) this Declaration may only be amended by a written instrument
approved and executed by the Regular Trustees (or, if there are more than two
Regular Trustees, a majority of the Regular Trustees) and:
(i) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional
Trustee, also by the Institutional Trustee; and
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee,
also by the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment shall
be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Institutional Trustee shall have first received an
Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including
the terms of the Securities);
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(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or
immunities of the Institutional Trustee, the
Institutional Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust
and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the
terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Trust) that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the
terms of the Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be
classified for purposes of United States federal income
taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers
of the Institutional Trustee; or
(C) cause the Trust to be deemed to be an Investment
Company required to be registered under the Investment Company
Act;
(c) at such time and after the Trust has issued any securities that
remain outstanding, any amendment that would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only with
such additional requirements as may be set forth in the terms of such
Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended without
the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the Holders
of a Majority in liquidation amount of the Common Securities;
(f) the rights of the holders of the Common Securities under Article V
to increase or decrease the number of, and appoint and remove, Trustees shall
not be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration may be amended
from time to time by the Holders of a Majority in liquidation amount of the
Common Securities and the Institutional Trustee, without the consent of the
Holders of the Convertible Preferred Securities to:
(i) cure any ambiguity, correct or supplement any
provision in this Declaration that may be
inconsistent with any other provision, 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
Investment Company Act;
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provided, however, such action shall not adversely affect in any material
respect the interests of any Holder of Securities;
(h) this Declaration may be amended by the Holders of a Majority in
liquidation amount of the Common Securities and the Institutional Trustee if:
(i) the Holders of a Majority in liquidation amount of
the Convertible Preferred Securities consent to such
amendment and
(ii) the Regular Trustees have received an opinion of
nationally recognized independent counsel experienced
in such matters to the effect that such amendment or
the exercise of any power granted to the Regular
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 as an "investment
company" under the Investment Company Act,
provided, that without the consent of each Holder of Securities, 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;
(ii) restrict the right of a Holder of Securities to
institute suit for the enforcement of any such
payment on or after such date; or
(iii) change or add a provision that shall result in the
realization of unrelated business income for the
Holders of Securities.
(i) Any amendments of this Declaration shall become effective when
notice thereof is given to Holders of Securities.
SECTION 12.2. Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Securities may be called at
any time by the Regular Trustees (or as provided in the terms of the Securities)
to consider and act on any matter on which Holders of such class of Securities
are entitled to act under the terms of this Declaration, the terms of the
Securities or the rules of any stock exchange on which the Convertible Preferred
Securities are listed or admitted for trading. The Regular Trustees shall call a
meeting of the Holders of such class if directed to do so by the Holders of at
least 25% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing the
Security Certificates held by the Holders of Securities exercising the right to
call a meeting and only those Securities specified shall be counted for purposes
of determining whether the required percentage set forth in the second sentence
of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the
Holders of Securities having a right to vote thereat
at least 7 days and not more than 60 days before the
date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or
required under this Declaration or the rules of any
stock exchange on
727341.10
39
which the Convertible Preferred Securities are listed
or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of
Securities. Any action that may be taken at a meeting
of the Holders of Securities may be taken without a
meeting if a consent in writing setting forth the
action so taken is signed by the Holders of
Securities owning not less than the minimum amount of
Securities in liquidation amount that would be
necessary to authorize or take such action at a
meeting at which all Holders of Securities having a
right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting
shall be given to the Holders of Securities entitled
to vote who have not consented in writing. The
Regular Trustees may specify that any written ballot
submitted to the Security Holder for the purpose of
taking any action without a meeting shall be returned
to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder of a Security may authorize any Person to
act for it by proxy on all matters in which a Holder
of Securities is entitled to participate, including
waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid
after the expiration of 11 months from the date
thereof unless otherwise provided in the proxy. Every
proxy shall be revocable at the pleasure of the
Holder of Securities executing it. Except as
otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be
governed by the General Corporation Law of the State
of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a
Delaware corporation and the Holders of the
Securities were stockholders of a Delaware
corporation;
(iii) each meeting of the Holders of the Securities shall
be conducted by the Regular Trustees or by such other
Person that the Regular Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the
terms of the Securities, the Trust Indenture Act or
the listing rules of any stock exchange on which the
Convertible Preferred Securities are then listed or
trading otherwise provides, the Regular Trustees, in
their sole discretion, shall establish all other
provisions relating to meetings of Holders of
Securities, including notice of the time, place or
purpose of any meeting at which any matter is to be
voted on by any Holders of Securities, waiver of any
such notice, action by consent without a meeting, the
establishment of a record date, quorum requirements,
voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF SPONSOR, INSTITUTIONAL TRUSTEE AND
DELAWARE TRUSTEE
SECTION 13.1. Representations and Warranties of Institutional Trustee.
The Trustee that acts as initial Institutional Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Institutional Trustee represents and warrants, as applicable, to
the Trust and the Sponsor at the time of the Successor Institutional Trustee's
acceptance of its appointment as Institutional Trustee that:
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40
(a) the Institutional Trustee is a national banking association with
trust powers, duly organized, validly existing and in good standing, with trust
power and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration;
(b) the execution, delivery and performance by the Institutional
Trustee of the Declaration has been duly authorized by all necessary corporate
action on the part of the Institutional Trustee. The Declaration has been duly
executed and delivered by the Institutional Trustee, and it constitutes a legal,
valid and binding obligation of the Institutional Trustee, enforceable against
it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such remedies
is considered in a proceeding in equity or at law);
(c) the execution, delivery and performance of the Declaration by the
Institutional Trustee does not conflict with or constitute a breach of the
charter or by-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the execution,
delivery or performance by the Institutional Trustee of the Declaration.
SECTION 13.2. Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) the Delaware Trustee is a Delaware corporation, duly organized,
validly existing and in good standing, with corporate power and authority to
execute and deliver, and to carry out and perform its obligations under the
terms of, the Declaration;
(b) the Delaware Trustee has been authorized to perform its obligations
under the Certificate of Trust and the Declaration. The Declaration under
Delaware law constitutes a legal, valid and binding obligation of the Delaware
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other similar
laws affecting creditors' rights generally and to general principles of equity
and the discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law);
(c) no consent, approval or authorization of, or registration with or
notice to, any Delaware or federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee of the Declaration;
and
(d) the Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity which has its principal
place of business in the State of Delaware.
SECTION 13.3. Representations and Warranties of Sponsor.
The Sponsor represents and Warrants to the Trustee that:
(a) the Sponsor has been duly created and is validly existing as a
business trust under the laws of the State of California, with the trust power
to execute and deliver, and to carry out and perform its obligations under the
terms of, the Declaration; and
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41
(b) the execution, delivery and performance by the Sponsor of the
Declaration has been duly authorized by all necessary trust action on the part
of the Sponsor. The Declaration has been duly executed and delivered by the
Sponsor, and it constitutes a legal, valid and binding obligation of the
Sponsor, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other similar
laws affecting creditors' rights generally and to general principles of equity
and the discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law).
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1. Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Holders of the Securities):
CT Convertible Trust I
c/o Capital Trust
605 Third Avenue, 26th Floor
New York, NY 10016
Attention: Chief Financial Officer
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as Delaware Trustee may give notice of to the
Holders of the Securities):
Wilmington Trust Company
1100 North Market Street
9th Floor
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
(c) if given to the Institutional Trustee, at its Corporate Trust
Office's mailing address set forth below (or such other address as the
Institutional Trustee may give notice of to the Holders of the Securities):
Wilmington Trust Company
1100 North Market Street
9th Floor
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
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42
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice to the Trust):
Capital Trust
605 Third Avenue, 26th Floor
New York, NY 10016
Attention: Chief Financial Officer
(e) if given to any other Holder, at the address set forth on the books
and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 14.2. Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
SECTION 14.3. Intention of the Parties.
It is the intention of the parties hereto that the Trust be classified
for United States federal income tax purposes as a grantor trust. The provisions
of this Declaration shall be interpreted to further this intention of the
parties.
SECTION 14.4. Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
SECTION 14.5. Successors and Assign.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.6. Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
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43
SECTION 14.7. Counterparts.
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
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44
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
/s/ John R. Klopp
----------------------------------------------------
John R. Klopp, as Regular Trustee
Solely as trustee and not in his individual capacity
/s/ Sheli Z. Rosenberg
----------------------------------------------------
Sheli Z. Rosenberg, as Regular Trustee
Solely as trustee and not in her individual capacity
WILMINGTON TRUST COMPANY, as
Delaware Trustee
By: /s/ Emmett R. Harmon
---------------------------------
Name: Emmett R. Harmon
Title: Vice President
WILMINGTON TRUST COMPANY,
as Institutional Trustee
By: /s/ Emmett R. Harmon
---------------------------------
Name: Emmett R. Harmon
Title: Vice President
CAPITAL TRUST, as Sponsor
By: /s/ John R. Klopp
---------------------------------
Name: John R. Klopp
Title: Chief Executive Officer
727341.10
45
ANNEX I
TERMS OF
8.25% STEP UP CONVERTIBLE TRUST PREFERRED SECURITIES
8.25% STEP UP CONVERTIBLE TRUST COMMON SECURITIES
Pursuant to Section 7.1 of the Declaration of Trust, dated as of July
28, 1998 (as amended from time to time, the "Declaration"), of CT Convertible
Trust I, the designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Convertible Preferred Securities and the
Common Securities are set out below (each capitalized term used but not defined
herein has the meaning set forth in the Declaration):
1. Designation and Number.
(a) Convertible Preferred Securities. 150,000 Convertible Preferred
Securities of the Trust with an aggregate liquidation amount with respect to the
assets of the Trust of One Hundred Fifty Million Dollars ($150,000,000), and a
liquidation amount with respect to the assets of $1,000 per convertible
preferred security, are hereby designated for the purposes of identification
only as "8.25% Step Up Convertible Trust Preferred Securities" (the "Convertible
Preferred Securities"). The Convertible Preferred Security Certificates
evidencing the Convertible Preferred Securities shall be substantially in the
form of Exhibit A-1 to the Declaration, with such letters, numbers, notations,
other means of identification or designation or other changes or additions
thereto or deletions therefrom as may be required by ordinary usage, custom or
practice and such legends or endorsements required by law, state exchange rule
and agreements to which the Trust is subject, if any (provided that any such
notation, legend or endorsement is in a form acceptable to the Trust).
(b) Common Securities. 4,650 Common Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of Four
Million Six Hundred Fifty Thousand Dollars ($4,650,000), and a liquidation
amount with respect to the assets of the Trust of $1,000 per common security,
are hereby designated for the purposes of identification only as "8.25% Step Up
Convertible Trust Common Securities" (the "Common Securities"). The Common
Securities Certificates evidencing the Common Securities shall be in the form of
Exhibit A-2 to the Declaration, with such letters, numbers, notations, other
means of identification or designation or other changes or additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice and
such legends or endorsements required by law, state exchange rule and agreements
to which the Trust is subject, if any (provided that any such notation, legend
or endorsement is in a form acceptable to the Trust).
2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate per
annum of 8.25% of the stated liquidation amount of $1,000 per Security from and
including July 28, 1998 (the "Issuance Date") to and including September 30,
2004, such rate per annum automatically increasing by an additional .75% per
annum (any such increase shall be cumulative with any such prior increase(s)) on
October 1, 2004 and again on each subsequent October 1 (such rate in effect at
any time is hereinafter referred to as the "Coupon Rate"), and such rate being
the rate of interest payable on the Debentures to be held by the Institutional
Trustee. Distributions in arrears for more than one quarter will bear interest
thereon compounded quarterly at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions" as used herein includes such interest
payable unless otherwise stated. A Distribution is payable only to the extent
that payments are made in respect of the Debentures held by the Institutional
Trustee and to the extent the Institutional Trustee has funds available
therefor. The amount of Distributions payable for any period will be computed
for any full quarterly Distribution period on the basis of a 360-day year of
twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.
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727341.10
If Capital Trust pays any Common Dividend during any quarter ending on
a Distribution Payment Date (as defined below), the Coupon Rate in effect for
such quarter shall automatically increase by the Common Rate. For purposes of
this provision, the following terms have the following meanings:
(i) "Common Dividend" means any cash dividend or distribution
payable on the Common Shares of Capital Trust.
(ii) "Common Rate" means, for any quarter, the fraction,
expressed as a percentage rate per annum, the numerator of which is the
aggregate dollar amount of Common Dividend paid on one common share
during such quarter and the denominator of which is $9.00 (subject to
adjustment in proportion to each adjustment to the Conversion Price (as
defined below) triggered by events occurring prior to such quarter).
(b) Distributions on the Securities will be cumulative, will accrue
from July 28, 1998 and will be payable quarterly in arrears, on March 31, June
30, September 30 and December 31 of each year (each a "Distribution Payment
Date"), commencing on September 30, 1998, except as otherwise described below.
So long as the Debenture Issuer shall not be in default in the payment of
interest on the Debentures, and subject to the condition that the prescribed
certification regarding liquidity is made at the commencement of the Extension
Period and at the beginning of each subsequent quarter of such Extension Period,
the Debenture Issuer has the right under the Indenture to defer payments of
interest on the Debentures by extending the interest payment period from time to
time on the Debentures for a period not exceeding 20 consecutive quarters (each
an "Extension Period"), during which Extension Period no interest shall be due
and payable on the Debentures, provided that no Extension Period shall last
beyond the date of maturity or any redemption date of the Debentures. As a
consequence of such deferral, Distributions will also be deferred. Despite such
deferral, quarterly Distributions will continue to accrue with interest thereon
(to the extent permitted by applicable law) at the Coupon Rate compounded
quarterly during any such Extension Period. Prior to the termination of any such
Extension Period, the Debenture Issuer may further extend such Extension Period;
provided that such Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarters or extend beyond the
maturity or any redemption date of the Debentures. Payments of accrued
Distributions and, to the extent permitted by applicable law, accrued interest
thereon shall be payable on the Distribution Payment Date on which the relevant
Extension Period terminates and shall be payable to Holders as they appear on
the books and records of the Trust at the close of business on the record date
next preceding such Distribution Payment Date. Upon the termination of any
Extension Period and the payment of all amounts then due, the Debenture Issuer
may commence a new Extension Period, subject to the above requirements. Each
Extension Period, if any, will end on an interest payment date for the
Debentures; such date will also be a Distribution Payment Date for the
Securities. In the event that the Debenture Issuer exercises its right to defer
payment of interest, then during such Extension Period the Debenture Issuer
shall not (a) declare or pay dividends on, make distributions with respect to,
or redeem, purchase or acquire, or make a liquidation payment with respect to,
any of its Capital Stock, or (b) make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued by
the Debenture Issuer that rank pari passu with or junior in interest to the
Debentures or make any guarantee payments with respect to any guarantee by the
Debenture Issuer of the debt securities of any subsidiary of the Debenture
Issuer if such guarantee ranks pari passu with or junior in interest to the
Debentures (other than (i) as a result of a reclassification of the Capital
Stock of the Debenture Issuer or the exchange or conversion of one class or
series of the Capital Stock of the Debenture Issuer for another class or series
of the Capital Stock of the Debenture Issuer, (ii) the purchase of fractional
interests in shares of the Capital Stock of the Debenture Issuer pursuant to the
conversion or exchange provisions of such Capital Stock or the security being
converted into or exchanged for such Capital Stock, (iii) dividends or
distributions in Common Shares of the Debenture Issuer, (iv) any declaration of
a dividend in connection with the implementation of a shareholders' rights plan,
or the issuance of Capital Stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto, (v) payments under
the Securities Guarantees, (vi) purchases of Common Shares of the Debenture
Issuer related to the issuance of Common Shares of the Debenture Issuer or
rights under any of the Debenture Issuer's benefit plans for its directors,
officers or employees and (vii) obligations under any dividend reinvestment and
stock purchase plans).
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727341.10
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates, which shall be fifteen days prior to the relevant payment dates,
which dates correspond to the record and interest payment dates on the
Debentures. The relevant record dates for the Common Securities shall be the
same record dates as for the Convertible Preferred Securities. Distributions
payable on any Securities that are not punctually paid on any Distribution
Payment Date, as a result of the Debenture Issuer having failed to make a
payment under the Debentures, will cease to be payable to the Person in whose
name such Securities are registered on the relevant record date, and such
defaulted Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other specified date
determined in accordance with the Indenture. If any date on which Distributions
are payable on the Securities is not a Business Day, then payment of the
Distributions payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date.
(d) In the event of an election by the Holder to convert its Securities
through the Conversion Agent into Common Shares pursuant to the terms of the
Securities as set forth in this Annex I to the Declaration, no payment,
allowance or adjustment shall be made with respect to accumulated and unpaid
Distributions on such Securities, or be required to be made; provided, however,
that Holders of Securities at the close of business on any record date for the
payment of Distributions will be entitled to receive the Distributions payable
on such Securities on the corresponding payment date notwithstanding the
conversion of such Securities into Common Shares following such record date;
provided, further that if the date of any redemption of related Debentures falls
between such record date and such corresponding payment date, the amount of such
Distribution shall include accumulated and unpaid Distributions accrued to but
excluding such date of redemption and such payment shall be made to the
converting holder.
(e) In the event that there is any money or other property held by or
for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
The Debenture Issuer will have the right at any time to cause the Trust
to be dissolved with the result that, after satisfaction of creditors of the
Trust, Debentures having an aggregate principal amount equal to the aggregate
stated liquidation amount of the Convertible Preferred Securities and the Common
Securities will be distributed on a pro rata basis to the Holders of the
Convertible Preferred Securities and the Common Securities in liquidation of
such Holders' interests in the Trust, within 90 days following notice given to
the Holders of the Convertible Preferred Securities, subject to the Regular
Trustees' receipt of an opinion of nationally recognized independent counsel
experienced in such matters to the effect that the Holders will not recognize
any income, gain or loss for United States federal income tax purposes as a
result of the dissolution of the Trust and such distribution to Holders of
Convertible Preferred Securities.
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Trust (each a "Liquidation"), the Holders of
the Securities on the date of the Liquidation will be entitled to receive out of
the assets of the Trust available for distribution to Holders of Securities
after satisfaction of liabilities of creditors an amount equal to the aggregate
of the stated liquidation amount of $1,000 per Security plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless, in connection with such Liquidation, Debentures in an
aggregate stated principal amount equal to the aggregate stated liquidation
amount of such Securities, with an interest rate equal to the Coupon Rate of,
and bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid Distributions on, such Securities, shall have been distributed on a Pro
Rata basis to the Holders of the Securities in exchange for such Securities.
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If, upon any such Liquidation, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) The Debentures will mature on September 30, 2018, and may be
redeemed, in whole or in part, at any time on or after September 30, 2003, or at
any time in certain circumstances upon the occurrence of a Tax Event (as defined
below). Upon the repayment of the Debentures in whole or in part, whether at
maturity, upon redemption (either at the option of the Debenture Issuer or
pursuant to a Tax Event as described below) or otherwise, the proceeds from such
repayment or payment shall be simultaneously applied to redeem Securities having
an aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so repaid or redeemed at a redemption price per Security equal to the
redemption price of the Debentures, together with accrued and unpaid
Distributions thereon to, but excluding, the date of the redemption, payable in
cash (the "Redemption Price") or the Adjusted Redemption Price specified in the
Indenture, as the case may be. Holders will be given not less than 30 nor more
than 60 days' notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so redeemed,
the Common Securities and the Convertible Preferred Securities will be redeemed
Pro Rata and the Convertible Preferred Securities to be redeemed will be as
described in Section 4(f) below.
(c) If, at any time, a Tax Event or an Investment Company Event (each,
as defined below, a "Special Event") shall occur and be continuing, the Regular
Trustees may with the consent of the Debenture Issuer, except in certain limited
circumstances in relation to a Tax Event described in this Section 4(c),
dissolve the Trust and, after satisfaction of creditors, cause Debentures held
by the Institutional Trustee, having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to the
Coupon Rate of, and accrued and unpaid interest equal to accrued and unpaid
Distributions on, and having the same record date for payment as the Securities,
to be distributed to the Holders of the Securities in liquidation of such
Holders' interests in the Trust on a Pro Rata basis, within 90 days following
the occurrence of such Special Event (the "90 Day Period"); provided, however,
that such dissolution and distribution shall be conditioned on (i) the Regular
Trustees' receipt of an opinion of nationally recognized independent tax counsel
experienced in such matters (a "No Recognition Opinion"), which opinion may rely
on published revenue rulings of the Internal Revenue Service, to the effect that
the Holders of the Securities will not recognize any gain or loss for United
States federal income tax purposes as a result of the dissolution of the Trust
and the distribution of Debentures, (ii) in the case of a Tax Event, the
Debenture Issuer or the Trust being unable to avoid, within the 90 Day Period,
the Tax Event by taking some ministerial action, such as filing a form or making
an election, or pursuing some other similar reasonable measure that has no
adverse effect on the Trust, the Debenture Issuer, the Sponsor or the Holders of
the Securities ("Ministerial Action"), and (iii) the Debenture Issuer's prior
written consent to such dissolution and distribution.
Furthermore, if (i) after receipt of a Dissolution Tax Opinion (as
defined hereinafter) by the Regular Trustees, the Debenture Issuer has received
an opinion (a "Redemption Tax Opinion") of nationally recognized independent tax
counsel experienced in such matters that, as a result of a Tax Event, there is
more than an insubstantial risk that the Debenture Issuer would be precluded
from deducting the interest on the Debentures for United States federal income
tax purposes even after the Debentures were distributed to the Holders of
Securities in liquidation of such Holders' interests in the Trust as described
in this Section 4(c), or (ii) the Regular Trustees shall have been informed by
such tax counsel that it cannot deliver a No Recognition Opinion to the Trust,
the Debenture Issuer shall have the right, upon not less than 30 nor more than
60 days' notice, to redeem the Debentures, in whole or in part, at a redemption
price equal to 100% of the principal amount thereof plus accrued and unpaid
interest thereon, for cash within 90 days following the occurrence of such Tax
Event. Following such redemption, Securities with an aggregate liquidation
amount equal to the aggregate principal amount of the Debentures so redeemed
shall be redeemed by the Trust at the Redemption Price on a Pro Rata basis;
provided, however, that, if at the time there is available to the Debenture
Issuer or the Trust the
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opportunity to eliminate, within such 90 day period, the Tax Event by taking
some Ministerial Action, the Trust or the Debenture Issuer will pursue such
Ministerial Action in lieu of redemption.
"Tax Event" means that the Regular Trustees shall have received an
opinion of nationally recognized independent tax counsel experienced in such
matters (a "Dissolution Tax Opinion") to the effect that on or after July 28,
1998, as a result of (a) any amendment to, clarification of, or change
(including any announced prospective change) in the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein affecting taxation, (b) any judicial decision,
official administrative pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action") or (c) any amendment to,
clarification of, or change in the official position or the interpretation of
such Administrative Action or judicial decision that differs from the
theretofore generally accepted position, in each case, by any legislative body,
court, governmental authority or regulatory body, irrespective of the manner in
which such amendment, clarification, change or Administrative Action is made
known, which amendment, clarification, change or Administrative Action is
effective or such pronouncement or decision is announced, in each case, on or
after, July 28, 1998, there is the creation by such amendment, clarification,
change or Administrative Action of more than an insubstantial risk that (i) the
Trust is, or will be within 90 days of the date thereof, subject to United
States federal income tax with respect to income accrued or received on the
Debentures, (ii) the Trust is, or will be within 90 days of the date thereof,
subject to more than a de minimis amount of taxes (other than withholding
taxes), duties or other governmental charges, or (iii) interest paid in cash by
the Debenture Issuer to the Trust on the Debentures is not, or within 90 days of
the date thereof will not be, deductible, in whole or in part, by the Debenture
Issuer for United States federal income tax purposes. Notwithstanding the
foregoing, a Tax Event shall not include any change in tax law that requires the
Debenture Issuer for United States federal income tax purposes to defer taking a
deduction for any original issue discount ("OID") that accrues with respect to
the Debentures until the interest payment related to such OID is paid by the
Debenture Issuer in cash; provided, that such change in tax law does not create
more than an insubstantial risk that the Debenture Issuer will be prevented from
taking a deduction for OID accruing with respect to the Debentures at a date
that is no later than the date the interest payment related to such OID is
actually paid by the Debenture Issuer in cash.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of nationally recognized independent counsel experienced in
such matters to the effect that, as a result of the occurrence of a change in
law or regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority on or after July 28, 1998 (a "Change in 1940 Act Law"), there is more
than an insubstantial risk that the Trust is or will be considered an
"investment company" that is required to be registered under the Investment
Company Act of 1940, as amended (the "1940 Act").
After the date fixed by the Regular Trustees for any distribution of
Debentures upon dissolution of the Trust: (i) the Securities will no longer be
deemed to be outstanding and (ii) certificates representing Securities held in
definitive form will be deemed to represent Debentures having an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the Coupon Rate of, and accrued and unpaid interest
(including Compound Interest (as defined in the Indenture)) equal to accrued and
unpaid Distributions on such Securities until such certificates are presented to
the Debenture Issuer or its agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding Securities
unless all accrued and unpaid Distributions have been paid on all Securities for
all quarterly Distribution periods terminating on or prior to the date of
redemption.
(e) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution Notice")
will be given by the Trust by mail to each Holder of Securities to be redeemed
or exchanged not fewer than 30 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of a redemption, will be the
date fixed for redemption of the Debentures.
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727341.10
For purposes of the calculation of the date of redemption or exchange and the
dates on which notices are given pursuant to this Section 4(e), a
Redemption/Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, or by such other
means suitable to assure delivery of such written notice, to Holders of
Securities. Each Redemption/Distribution Notice shall be addressed to the
Holders of Securities at the address of each such Holder appearing in the books
and records of the Trust. No defect in the Redemption/Distribution Notice or in
the mailing of either thereof with respect to any Holder of Securities shall
affect the validity of the redemption or exchange proceedings with respect to
any other Holder of Securities.
(f) In the event that fewer than all the outstanding Securities are to
be redeemed, the Securities to be redeemed shall be redeemed Pro Rata from each
Holder of Convertible Preferred Securities.
(g) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued for a redemption
if the Debentures are redeemed as set out in Article X of the Indenture (which
notice will be irrevocable), then, provided that the Debenture Issuer has paid
the Institutional Trustee a sufficient amount of cash in connection with the
related redemption of the Debentures, the Institutional Trustee will pay the
relevant Redemption Price to the Holders of such Securities by check mailed to
the address of the relevant Holder appearing on the books and records of the
Trust on the redemption date. If a Redemption/Distribution Notice shall have
been given in connection with a redemption and funds deposited as required, then
from and after the required date of such deposit, distributions will cease to
accrue on the Securities so called for redemption and all rights of Holders of
such Securities so called for redemption will cease, except the right of the
Holders of such Securities to receive the Redemption Price or the Adjusted
Redemption Price, as the case may be, but without interest on such Redemption
Price or the Adjusted Redemption Price, as the case may be. If any date fixed
for redemption of Securities is not a Business Day, then payment of the
Redemption Price or the Adjusted Redemption Price, as the case may be, payable
on such date will be made on the next succeeding Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date fixed for redemption. If payment of the Redemption Price
or the Adjusted Redemption Price, as the case may be, in respect of any
Securities is improperly withheld or refused and not paid either by the
Institutional Trustee or by the Sponsor as guarantor pursuant to the relevant
Securities Guarantee, Distributions on such Securities will continue to accrue
from the original redemption date to the actual date of payment, in which case
the actual payment date will be considered the date fixed for redemption for
purposes of calculating the Redemption Price or the Adjusted Redemption Price,
as the case may be.
Neither the Regular Trustees nor the Trust shall be required (i) in the
event of any redemption in part, to issue, register the transfer of or exchange
any Securities during a period beginning at the opening of business 15 days
before any selection for redemption of Securities and ending at the close of
business on the earliest date in which the relevant Redemption/Distribution
Notice is deemed to have been given to all holders of Securities to be so
redeemed or (ii) to register the transfer of or exchange any Securities selected
for redemption, in whole or in part, except for the unredeemed portion of any
Securities being redeemed in part.
(h) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (i) in respect of Convertible Preferred
Securities, to the Holders thereof, and (ii) in respect of the Common
Securities, to the Holders thereof.
(i) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Sponsor or any of its
subsidiaries may at any time and from time to time purchase outstanding
Convertible Preferred Securities by tender, in the open market or otherwise.
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5. Conversion Rights.
The Holders of Securities shall have the right at any time through the
close of business on the last Business Day prior to the Maturity Date (as
defined in the Indenture) (or, in the case of Securities called for redemption,
prior to the close of business on the Business Day prior to the redemption
date), at their option, to cause the Conversion Agent to convert Securities, on
behalf of the converting Holders, into Common Shares in the manner described
herein on and subject to the following terms and conditions:
(a) The Securities will be convertible at the office of the Conversion
Agent into fully paid and nonassessable Common Shares pursuant to the Holder's
direction to the Conversion Agent to exchange such Securities for a portion of
the Debentures theretofore held by the Trust on the basis of one Security per
$1,000 principal amount of Debentures, and immediately convert such amount of
Debentures into fully paid and nonassessable Common Shares at an initial rate of
85.47 Common Shares per $1,000 principal amount of Debentures (which is
equivalent to a conversion price of $11.70 per Common Share, subject to certain
adjustments set forth in Article XII of the Indenture (as so adjusted, the
"Conversion Price"). At least 1,000, or all of them, if less than 1,000, of the
Securities held by the converting Holder must be converted in connection with
any conversion into Common Shares pursuant to the foregoing.
(b) In order to convert Securities into Common Shares, the Holder shall
submit to the Conversion Agent at its office an irrevocable request to convert
Securities on behalf of such Holder (the "Conversion Request"), together with
such certificates. The Conversion Request shall (i) set forth the number of
Securities to be converted and the name or names, if other than the Holder, in
which the Common Shares should be issued and (ii) direct the Conversion Agent
(a) to exchange such Securities for a portion of the Debentures held by the
Trust (at the rate of exchange specified in the preceding paragraph) and (b) to
immediately convert such Debentures on behalf of such Holder, into Common Shares
(at the conversion rate specified in the preceding paragraph). The Conversion
Agent shall notify the Trust of the Holder's election to exchange Securities for
a portion of the Debentures held by the Trust and the Trust shall, upon receipt
of such notice, deliver to the Conversion Agent the appropriate principal amount
of Debentures for exchange in accordance with this Section. The Conversion Agent
shall thereupon notify Capital Trust of the Holder's election to convert such
Debentures into Common Shares. Holders of Securities at the close of business on
a Distribution record date will be entitled to receive the Distribution payable
on such securities on the corresponding Distribution payment date
notwithstanding the conversion of such Securities following such record date but
prior to such distribution payment date; provided, however, that if the date of
any redemption of the related Debentures falls between such record date and the
related Distribution payment date, the amount of such Distribution shall include
accumulated and unpaid Distributions accrued to but excluding such date of
redemption, and such payment shall be made to the converting Holder. Except as
provided above, neither the Trust nor the Sponsor will make, or be required to
make, any payment, allowance or adjustment upon any conversion on account of any
accumulated and unpaid Distributions accrued on the Securities (including any
Additional Amounts accrued thereon) surrendered for conversion, or on account of
any accumulated and unpaid dividends on the Common Shares issued upon such
conversion, except to the extent that such shares are held of record on the
record date for any such distributions. Securities shall be deemed to have been
converted immediately prior to the close of business on the day on which a
Notice of Conversion relating to such Securities is received by the Trust in
accordance with the foregoing provision (the "Conversion Date"). The Person or
Persons entitled to receive Common Shares issuable upon conversion of the
Debentures shall be treated for all purposes as the record holder or holders of
such Common Shares at such time. As promptly as practicable on or after the
Conversion Date, Capital Trust shall issue and deliver at the office of the
Conversion Agent a certificate or certificates for the number of full Common
Shares issuable upon such conversion, together with the cash payment, if any, in
lieu of any fraction of any share to the Person or Persons entitled to receive
the same, unless otherwise directed by the Holder in the notice of conversion
and the Conversion Agent shall distribute such certificate or certificates to
such Person or Persons.
(c) Each Holder of a Security by his acceptance thereof appoints
Wilmington Trust Company as "Conversion Agent" for the purpose of effecting the
conversion of Securities in accordance with this Section. In effecting the
conversion and transactions described in this Section, the Conversion Agent
shall be acting as agent
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of the Holders of Securities directing it to effect such conversion
transactions. The Conversion Agent is hereby authorized (i) to exchange
Securities from time to time for Debentures held by the Trust in connection with
the conversion of such Securities in accordance with this Section and (ii) to
convert all or a portion of the Debentures into Common Shares and thereupon to
deliver such Common Shares in accordance with the provisions of this Section and
to deliver to the Trust a new Debenture or Debentures for any resulting
unconverted principal amount.
(d) No fractional Common Shares will be issued as a result of
conversion of Securities, but in lieu thereof such fractional interest will be
paid in cash by Capital Trust, in an amount based on the Closing Price of the
Common Shares on the date such Securities are surrendered for conversion, to the
Conversion Agent, which in turn will make such payment to the Holder or Holders
of Securities so converted.
(e) Capital Trust shall at all times reserve and keep available out of
its authorized and unissued Common Shares, solely for issuance upon the
conversion of the Debentures, free from any preemptive or other similar rights,
such number of Common Shares as shall from time to time be issuable upon the
conversion of all the Debentures then outstanding. Notwithstanding the
foregoing, Capital Trust shall be entitled to deliver upon conversion of
Debentures, Common Shares reacquired and held in the treasury of Capital Trust
(in lieu of the issuance of authorized and unissued Common Shares), so long as
any such treasury shares are free and clear of all liens, charges, security
interests or encumbrances. Any Common Shares issued upon conversion of the
Debentures shall be duly authorized, validly issued and fully paid and
nonassessable. The Trust shall deliver the Common Shares received upon
conversion of the Debentures to the converting Holder free and clear of all
liens, charges, security interests and encumbrances, except for United States
withholding taxes. Each of Capital Trust and the Trust shall prepare and shall
use its best efforts to obtain and keep in force such governmental or regulatory
permits or other authorizations as may be required by law, and shall comply with
all applicable requirements as to registration or qualification of Common Shares
(and all requirements to list Common Shares issuable upon conversion of
Debentures that are at the time applicable), in order to enable Capital Trust to
lawfully issue Common Shares to the Trust upon conversion of the Debentures and
the Trust to lawfully deliver Common Shares to each Holder upon conversion of
the Securities.
(f) Capital Trust will pay any and all taxes that may be payable in
respect of the issue or delivery of Common Shares on conversion of Debentures
and the delivery of the Common Shares by the Trust upon conversion of the
Securities. Capital Trust shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issue and delivery of
Common Shares in a name other than that in which the Securities so converted
were registered, and no such issue or delivery shall be made unless and until
the person requesting such issue has paid to the Trust the amount of any such
tax, or has established to the satisfaction of the Trust that such tax has been
paid.
(g) Nothing in the preceding Paragraph (f) shall limit the requirement
of the Trust to withhold taxes pursuant to the terms of the Securities or as set
forth in this Annex I to the Declaration or to the Declaration itself or
otherwise require the Institutional Trustee or the Trust to pay any amounts on
account of such withholdings.
(h) The term "Closing Price" with respect to any security on any day
means the last reported sale price, regular way on such day, or, if no sale
takes place on such day, the average of the reported closing bid and asked
prices on such day, regular way, in either case as reported on the NYSE
Composite Tape, or, if such security is not listed or admitted to trading on the
NYSE, on the principal national securities exchange on which such security is
listed or admitted to trading, or, if such security is not listed or admitted to
trading on a national securities exchange, on the National Market System of the
National Association of Securities Dealers, Inc., or, if such security is not
quoted or admitted to trading on such quotation system, on the principal
quotation system on which such security is listed or admitted to trading or
quoted, or, if not listed or admitted to trading or quoted on any national
securities exchange or quotation system, the average of the closing bid and
asked prices of such security in the over-the-counter market on the day in
question as reported by the National Quotation Bureau Incorporated, or a similar
generally accepted reporting service, or, if not so available in such manner, as
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furnished by any NYSE member firm selected from time to time by the Board of
Trustees (or any committee duly authorized by the Board of Trustees) of the
Debenture Issuer for that purpose or, if not so available in such manner, as
otherwise determined in good faith by the Board of Trustees (or any committee
duly authorized by the Board of Trustees) of the Debenture Issuer.
6. Voting and Other Rights - Convertible Preferred Securities.
(a) Except as provided under Sections 6(b) and 8 of this Annex I to the
Declaration and as otherwise required by law and the Declaration, the Holders of
the Convertible Preferred Securities will not have voting rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a Majority in liquidation amount of the Convertible Preferred
Securities then outstanding, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or may direct the exercise of any trust or power
conferred upon the Institutional Trustee under the Declaration, including the
right to direct the Institutional Trustee, as holder of the Debentures, to (i)
exercise the remedies available under the Indenture with respect to the
Debentures, (ii) waive any past default and its consequences that is waivable
under Section 5.9 of the Indenture, or (iii) exercise any right to rescind or
annul a declaration that the principal of all the Debentures shall be due and
payable, provided, however, that if an Event of Default under the Indenture has
occurred and is continuing then the holders of 25% of the aggregate liquidation
amount of the Convertible Preferred Securities then outstanding may direct the
Institutional Trustee to declare the principal of and interest on the Debentures
immediately due and payable; and provided, further, that, where a consent under
the Indenture would require the consent or act of the Holders of greater than a
majority of the Holders in principal amount of Debentures then outstanding (a
"Super Majority") affected thereby, the Institutional Trustee may only give such
consent or take such action at the written direction of the Holders of at least
the proportion in liquidation amount of the Convertible Preferred Securities
which the relevant Super Majority represents of the aggregate principal amount
of the Debentures then outstanding. The Institutional Trustee shall not revoke
any action previously authorized or approved by a vote of the Holders of the
Convertible Preferred Securities. Other than with respect to directing the time,
method and place of conducting any remedy available to the Institutional Trustee
as set forth above, the Institutional Trustee shall not take any action in
accordance with the directions of the Holders of the Convertible Preferred
Securities under this paragraph unless the Institutional Trustee has obtained an
opinion of nationally recognized independent tax counsel experienced in such
matters to the effect that for the purposes of United States federal income tax
the Trust will not be classified as other than a grantor trust as a result of
such action. If the Institutional Trustee fails to enforce its rights under the
Debentures, any Holder of Convertible Preferred Securities may institute a legal
proceeding against any person to enforce the Institutional Trustee's rights
under the Debentures. If a Declaration Event of Default has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay interest or principal on the Debentures on the date such interest or
principal is otherwise payable (or in the case of redemption, on the redemption
date), then a Holder of Convertible Preferred Securities may directly institute
a proceeding for enforcement of payment to such Holder of the principal of or
interest on the Debentures having a principal amount equal to the aggregate
liquidation amount of the Convertible Preferred Securities of such Holder (a
"Direct Action") on or after the respective due date specified in the
Debentures. In connection with such Direct Action, the rights of the Holders of
Common Securities will be subrogated to the rights of such Holder of Convertible
Preferred Securities to the extent of any payment made by the Issuer to such
Holder of Convertible Preferred Securities in such Direct Action. Except as
provided in the preceding sentences, the Holders of Convertible Preferred
Securities will not be able to exercise directly any other remedy available to
the holders of the Debentures.
Any approval or direction of Holders of Convertible Preferred
Securities may be given at a separate meeting of Holders of Convertible
Preferred Securities convened for such purpose, at a meeting of all of the
Holders of Securities in the Trust or pursuant to written consent. The Regular
Trustees will cause a notice of any meeting at which Holders of Convertible
Preferred Securities are entitled to vote, or of any matter upon which action by
written consent of such Holders is to be taken, to be mailed to each Holder of
record of
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727341.10
Convertible Preferred Securities. Each such notice will include a statement
setting forth (i) the date of such meeting or the date by which such action is
to be taken, (ii) a description of any resolution proposed for adoption at such
meeting on which such Holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery of proxies or
consents.
No vote or consent of the Holders of the Convertible Preferred
Securities will be required for the Trust to redeem and cancel Convertible
Preferred Securities or to distribute the Debentures in accordance with the
Declaration and the terms of the Securities.
Notwithstanding that Holders of Convertible Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Convertible Preferred Securities that are owned by the Sponsor or any
Affiliate of the Sponsor shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if they were not outstanding.
7. Voting Rights - Common Securities.
(a) Except as provided under Sections 7(b), 7(c) and 8 of this Annex I
of the Declaration and as otherwise required by law and the Declaration, the
Holders of the Common Securities will not have voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after any Event
of Default with respect to the Convertible Preferred Securities has been cured,
waived, or otherwise eliminated and subject to the requirements of the second to
last sentence of this paragraph, the Holders of a Majority in liquidation amount
of the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under Section 5.9 of the Indenture, or (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Debentures shall be due and payable, provided that, where a consent or
action under the Indenture would require the consent or act of the relevant
Super Majority, the Institutional Trustee may only give such consent or take
such action at the written direction of the Holders of at least the proportion
in liquidation amount of the Common Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding. The
Institutional Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Convertible Preferred Securities. Other
than with respect to directing the time, method and place of conducting any
remedy available to the Institutional Trustee or the Debenture Trustee as set
forth above, the Institutional Trustee shall not take any action in accordance
with the directions of the Holders of the Common Securities under this paragraph
unless the Institutional Trustee has obtained an opinion of nationally
recognized independent tax counsel experienced in such matters to the effect
that for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action. If the
Institutional Trustee fails to enforce its rights under the Declaration, any
Holder of Common Securities may institute a legal proceeding directly against
any Person to enforce the Institutional Trustee's rights under the Declaration,
without first instituting a legal proceeding against the Institutional Trustee
or any other Person.
Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for such purpose,
at a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which Holders of Common Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be mailed to
each Holder of record of Common Securities. Each such notice will
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include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
8. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities
voting together as a single class, will be entitled to vote on such amendment or
proposal (but not on any other amendment or proposal) and such amendment or
proposal shall not be effective except with the approval of the Holders of at
least a Majority in liquidation amount of the Securities then outstanding
affected thereby; provided, however, if any amendment or proposal referred to in
clause (i) above would adversely affect only the Convertible Preferred
Securities or only the Common Securities, then only the affected class will be
entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of a Majority in liquidation
amount of such class of Securities then outstanding.
(b) In the event the consent of the Institutional Trustee as the holder
of the Debentures is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities then outstanding, voting
together as a single class; provided, however, that where a consent under the
Indenture would require the consent of the relevant Super Majority, the
Institutional Trustee may only give such consent at the direction of the Holders
of at least the proportion in liquidation amount of the Securities then
outstanding which the relevant Super Majority represents of the aggregate
principal amount of the Debentures then outstanding; provided, further, that the
Institutional Trustee shall not take any action in accordance with the
directions of the Holders of the Securities under this Section 8(b) unless the
Institutional Trustee has obtained an opinion of nationally recognized
independent tax counsel experienced in such matters to the effect that for the
purposes of United States federal income tax the Trust will not be classified as
other than a grantor trust as a result of such action.
9. Pro Rata.
A reference in these terms of the Securities to any distribution or
treatment as being "Pro Rata" shall mean pro rata to each Holder of Securities
according to the aggregate liquidation amount of the Securities held by the
relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first in cash to each Holder of the
Convertible Preferred Securities pro rata according to the aggregate liquidation
amount of Convertible Preferred Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Convertible Preferred Securities
outstanding, and only after satisfaction of all amounts owed to the Holders of
the Convertible Preferred Securities, to each Holder of Common Securities pro
rata according to the aggregate liquidation amount of Common Securities held by
the relevant Holder relative to the aggregate liquidation amount of all Common
Securities outstanding.
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10. Ranking.
The Convertible Preferred Securities rank pari passu and payment
thereon shall be made Pro Rata with the Common Securities except that, where a
Declaration Event of Default occurs and is continuing, the rights of Holders of
the Common Securities to payment in respect of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights to payment
of the Holders of the Convertible Preferred Securities.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Convertible Preferred Securities and Common Securities,
by the acceptance thereof, agrees to the provisions of the Convertible Preferred
Securities Guarantee and the Common Securities Guarantee, respectively,
including the subordination provisions therein and to the provisions of the
Indenture.
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration. The Sponsor will
provide a copy of the Declaration, the Convertible Preferred Securities
Guarantee or the Common Securities Guarantee (as may be appropriate), and the
Indenture to a Holder without charge on written request to the Sponsor at its
principal place of business.
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EXHIBIT A-1
[FORM OF CONVERTIBLE PREFERRED SECURITY CERTIFICATE]
CERTIFICATE NUMBER:
NUMBER OF CONVERTIBLE PREFERRED SECURITIES:
CUSIP NO.: IF RULE 144A - US1264292087; IF ACCREDITED INVESTOR - US1264293077;
IF REGULATION S -USU126651020
ISIN NO.: USU126651020 - - ONLY IF REGULATION S
A1-1
727341.10
Certificate Evidencing Convertible Preferred Securities
of
CT CONVERTIBLE TRUST I
[PRIOR TO THE TRANSFER RESTRICTION TERMINATION DATE, ANY CERTIFICATE EVIDENCING
A CONVERTIBLE PREFERRED SECURITY SHALL BEAR A LEGEND IN SUBSTANTIALLY THE
FOLLOWING FORM, UNLESS OTHERWISE AGREED BY THE REGULAR TRUSTEES (WITH WRITTEN
NOTICE TO THE INSTITUTIONAL TRUSTEE): THE SECURITY EVIDENCED HEREBY HAS NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR
TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT
(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED
IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL
ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE
SECURITY EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL
NOT PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION) RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY
OR IF THIS SECURITY IS CONVERTIBLE INTO COMMON SHARES THE COMMON SHARES ISSUABLE
UPON CONVERSION OR EXCHANGE OF THIS SECURITY EXCEPT (A) TO CAPITAL TRUST (THE
"COMPANY") OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (C) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE FOR
THE CONVERTIBLE PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE
MAY BE (OR, IF THIS CERTIFICATE EVIDENCES COMMON SHARES, THE TRANSFER AGENT FOR
THE COMMON SHARES), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED
HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR TRANSFER
AGENT), (E) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT OR (F) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THE SECURITY EVIDENCED HEREBY PRIOR TO EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE FOR THE CONVERTIBLE
PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE MAY BE (OR, IF
THIS CERTIFICATE EVIDENCES COMMON SHARES, SUCH HOLDER MUST FURNISH TO THE
TRANSFER AGENT SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE
COMPANY OR CT CONVERTIBLE TRUST I (THE "TRUST") MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT). IF THIS CERTIFICATE DOES NOT EVIDENCE COMMON SHARES AND IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A
U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE FOR
THE CONVERTIBLE PREFERRED
A1-2
727341.10
SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE MAY BE, SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY OR THE TRUST
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED AFTER THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.]
NO LATER THAN 10 DAYS AFTER THE ISSUE DATE OF THE CONVERTIBLE PREFERRED
SECURITIES, INFORMATION CONCERNING THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT, THE ISSUE DATE, AND THE YIELD TO MATURITY (AS THOSE TERMS ARE USED FOR
FEDERAL INCOME TAX PURPOSES) OF THE CONVERTIBLE PREFERRED SECURITIES MAY BE
OBTAINED FROM THE REGULAR TRUSTEES OF CT CONVERTIBLE TRUST I AT 605 THIRD
AVENUE, 26TH FLOOR, NEW YORK, NY 10016.
8.25% Step Up Convertible Trust Preferred Securities
(liquidation amount $1,000 per Convertible Trust Preferred Security)
CT Convertible Trust I, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that
__________________ (the "Holder") is the registered owner of convertible
preferred securities of the Trust, representing undivided beneficial interests
in the assets of the Trust, designated as the 8.25% Step Up Convertible Trust
Preferred Securities (liquidation amount $1,000 per Convertible Trust Preferred
Security) (the "Convertible Preferred Securities"). The Convertible Preferred
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for transfer.
The designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Convertible Preferred Securities represented
hereby are issued and shall in all respects be subject to the provisions of the
Declaration of Trust of the Trust dated as of July 28, 1998, as the same may be
amended from time to time (the "Declaration"), including the designation of the
terms of the Convertible Preferred Securities as set forth in Annex I to the
Declaration.
Capitalized terms used herein but not defined shall have the meaning
given them in the Declaration. The Holder is entitled to the benefits of the
Convertible Preferred Securities Guarantee to the extent provided therein. The
Sponsor will provide a copy of the Declaration, the Convertible Preferred
Securities Guarantee and the Indenture to the Holder without charge upon written
request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Convertible
Preferred Securities as evidence of indirect beneficial ownership in the
Debentures.
Unless the Institutional Trustee's Certificate of Authentication hereon
has been properly executed, these Convertible Preferred Securities shall not be
entitled to any benefit under the Declaration or be valid or obligatory for any
purpose.
A1-3
727341.10
IN WITNESS WHEREOF, the Trust has executed this certificate this 28 day
of July, 1998.
CT Convertible Trust I
By: ____________________________________
Name:
Title: Trustee
Solely as trustee and not in his
individual capacity
A1-4
727341.10
[FORM OF CERTIFICATE OF AUTHENTICATION]
INSTITUTIONAL TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Convertible Preferred Securities referred to in the
within-mentioned Declaration.
Dated: July 28, 1998
Wilmington Trust Company,
as Institutional Trustee or as Authentication Agent
By: _______________________________ By: _______________________________
Authorized Signatory Authorized Signatory
A1-5
727341.10
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Convertible Preferred Security will be
fixed at a rate per annum of 8.25% of the stated liquidation amount of $1,000
per Preferred Security from and including July 28, 1998 (the "Issuance Date") to
and including September 30, 2004, such rate per annum automatically increasing
by an additional .75% per annum (any such increase shall be cumulative with any
such prior increase(s)) on October 1, 2004 and again on each subsequent October
1 (such rate in effect at any time is hereinafter referred to as the "Coupon
Rate"), and such rate being the rate of interest payable on the Debentures to be
held by the Institutional Trustee. Distributions in arrears for more than one
quarter will bear interest thereon compounded quarterly at the Coupon Rate (to
the extent permitted by applicable law). The term "Distributions" as used herein
includes such cash distributions and any such interest payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Institutional Trustee and to the extent
the Institutional Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 30-day month.
If Capital Trust pays any Common Dividend during any quarter ending on
a Distribution payment date, the Coupon Rate in effect for such quarter shall
automatically increase by the Common Rate.
Except as otherwise described below, Distributions on the Convertible
Preferred Securities will be cumulative, will accrue from July 28, 1998 and will
be payable quarterly in arrears, on March 31, June 30, September 30 and December
31 of each year, commencing on September 30, 1998, which payment dates shall
correspond to the interest payment dates on the Debentures, to Holders of record
at the close of business on the regular record date for such Distribution which
shall be the close of business 15 days prior to such Distribution payment date
unless otherwise provided in the Declaration. The Debenture Issuer has the right
under the Indenture to defer payments of interest by extending the interest
payment period from time to time on the Debentures for a period not exceeding 20
consecutive quarters (each an "Extension Period"); provided that no Extension
Period shall last beyond the date of the maturity or any redemption date of the
Debentures and, as a consequence of such deferral, Distributions will also be
deferred. Despite such deferral, quarterly Distributions will continue to accrue
with interest thereon (to the extent permitted by applicable law) at the Coupon
Rate compounded quarterly during any such Extension Period. Prior to the
termination of any such Extension Period, the Debenture Issuer may further
extend such Extension Period; provided that such Extension Period together with
all such previous and further extensions thereof may not exceed 20 consecutive
quarters or extend beyond the maturity or any redemption date of the Debentures.
Upon the termination of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements.
The Convertible Preferred Securities shall be redeemable as provided in
the Declaration.
The Convertible Preferred Securities shall be convertible into Common
Shares, through (i) the exchange of Convertible Preferred Securities for a
portion of the Debentures and (ii) the immediate conversion of such Debentures
into Debenture Issuer Common Shares, in the manner and according to the terms
set forth in the Declaration.
A1-6
727341.10
CONVERSION REQUEST
To: Wilmington Trust Company,
as Institutional Trustee of CT Convertible Trust I
The undersigned owner of these Convertible Preferred Securities hereby
irrevocably exercises the option to convert these Convertible Preferred
Securities, or the portion below designated, into Common Shares of Capital Trust
(the "Common Shares") in accordance with the terms of the Declaration of Trust
(the "Declaration"), dated as of July 28, 1998, by John R. Klopp, and Sheli Z.
Rosenberg, as Regular Trustees, Wilmington Trust Company, as Delaware Trustee,
Wilmington Trust Company, as Institutional Trustee, Capital Trust, as Sponsor,
and by the Holders, from time to time, of individual beneficial interests in the
Trust to be issued pursuant to the Declaration. Pursuant to the aforementioned
exercise of the option to convert these Convertible Preferred Securities, the
undersigned hereby directs the Conversion Agent (as that term is defined in the
Declaration) to (i) exchange such Convertible Preferred Securities for a portion
of the Debentures (as that term is defined in the Declaration) held by the Trust
(at the rate of exchange specified in the terms of the Convertible Preferred
Securities set forth as Annex I to the Declaration) and (ii) immediately convert
such Debentures on behalf of the undersigned, into Common Shares (at the
conversion rate specified in the terms of the Convertible Preferred Securities
set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Date: _______________, ____
in whole _____ in part _____
Number of Convertible Preferred Securities to be
converted: ____________________
If a name or names other than the
undersigned, please indicate in the
spaces below the name or names in
which the Common Shares are to be
issued, along with the address or
addresses of such person or persons.
==================================================
==================================================
--------------------------------------------------
--------------------------------------------------
Signature (for conversion only)
A1-7
727341.10
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or Other
Identifying Number
==================================================
--------------------------------------------------
Signature Guarantee:* __________________________
- --------
* (Signature must be guaranteed by an "eligible guarantor institution," that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Conversion Agent, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Conversion Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.)
A1-8
727341.10
[FORM OF ASSIGNMENT FOR DEFINITIVE CONVERTIBLE
PREFERRED SECURITY]
For value received ---------------------- hereby sell(s), assign(s) and
transfer(s) unto --------------------------------------------------------------
- -----------------------------------------
(Please insert social security or other taxpayer identification number of
assignee.)
the within security and hereby irrevocably constitutes and appoints ____________
attorney to transfer the said security on the books of the Company, with full
power of substitution in the premises.
In connection with any transfer of the within security occurring prior to the
Transfer Restriction Termination Date, the undersigned confirms that such
security is being transferred:
/ / To Capital Trust or a subsidiary thereof; or
/ / Pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended; or
/ / To an Institutional Accredited Investor pursuant to and in
compliance with the Securities Act of 1933, as amended; or
/ / Pursuant to and in compliance with Regulation S under the
Securities Act of 1933, as amended; or
/ / Pursuant to and in compliance with Rule 144 under the
Securities Act of 1933, as amended; or
/ / Pursuant to an effective registration statement.
and unless the box below is checked, the undersigned confirms that such security
is not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
/ / The transferee is an Affiliate of the Company.
Dated: ___________________________
Signature(s)
--------------------------------------
--------------------------------------
--------------------------------------
Signature Guarantee*
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of this Security in every particular without
alteration or enlargement or any change whatever.
- --------
* (Signature must be guaranteed by an "eligible guarantor institution," that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Conversion Agent, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Conversion Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.)
A1-9
727341.10
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
CERTIFICATE NUMBER:
NUMBER OF COMMON SECURITIES:
Certificate Evidencing Common Securities
of
CT CONVERTIBLE TRUST I
8.25% Step Up Convertible Trust Common Securities
(liquidation amount $1,000 per Common Security)
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD UNLESS SUCH OFFER AND SALE ARE
REGISTERED UNDER OR ARE EXEMPT FROM REGISTRATION UNDER THE SECURITIES
ACT. THE TRANSFER OF THE SECURITY EVIDENCED HEREBY IS ALSO SUBJECT TO
THE RESTRICTIONS SET FORTH IN THE DECLARATION REFERRED TO BELOW.
NO LATER THAN 10 DAYS AFTER THE ISSUE DATE OF THE COMMON SECURITIES,
INFORMATION CONCERNING THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT, THE ISSUE DATE, AND THE YIELD TO MATURITY (AS THOSE TERMS ARE
USED FOR FEDERAL INCOME TAX PURPOSES) OF THE COMMON SECURITIES MAY BE
OBTAINED FROM THE REGULAR TRUSTEES OF CT CONVERTIBLE TRUST I AT 605
THIRD AVENUE, 26TH FLOOR, NEW YORK, NY 10016.
CT Convertible Trust I, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that
________________________________________ (the "Holder") is the registered owner
of common securities of the Trust representing undivided beneficial interests in
the assets of the Trust designated the 8.25% Step Up Common Securities
(liquidation amount $1,000 per Common Security) (the "Common Securities"). The
Common Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this certificate duly
endorsed and in proper form for transfer.
The designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Common Securities represented hereby are
issued and shall in all respects be subject to the provisions of the Declaration
of Trust of the Trust dated as of July 28, 1998, as the same may be amended from
time to time (the "Declaration"), including the designation of the terms of the
Common Securities as set forth in Annex I to the Declaration.
Capitalized terms used herein but not defined shall have the meaning
given them in the Declaration. The Holder is entitled to the benefits of the
Common Securities Guarantee to the extent provided therein. The Sponsor will
provide a copy of the Declaration, the Common Securities Guarantee and the
Indenture to a Holder without charge upon written request to the Trust at its
principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
A2-1
727341.10
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this 28th
day of July, 1998.
CT Convertible Trust I
By: ____________________________________________
Name:
Title: Trustee
Solely as trustee and not in his individual
capacity
A2-2
727341.10
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate
per annum, of 8.25% of the stated liquidation amount of $1,000 per Common
Security, from and including July 28, 1998 (the "Issuance Date") to but
excluding September 30, 2004, such rate per annum automatically increasing by an
additional .75% per annum (any such increase shall be cumulative with any such
prior increase(s)) on October 1, 2004 and again on each subsequent October 1
(such rate in effect at any time is hereinafter referred to as the "Coupon
Rate") and such rate being the rate of interest payable on the Debentures to be
held by the Institutional Trustee. Distributions in arrears for more than one
quarter will bear interest thereon compounded quarterly at the Coupon Rate (to
the extent permitted by applicable law). The term "Distributions" as used herein
includes such cash distributions and any such interest payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Institutional Trustee and to the extent
the Institutional Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 30-day month.
If Capital Trust pays any Common Dividend during any quarter ending on
a Distribution payment date, the Coupon Rate in effect for such quarter shall
automatically increase by the Common Rate.
Except as otherwise described below, Distributions on the Common
Securities will be cumulative, will accrue from July 28, 1998 and will be
payable quarterly in arrears, on March 31, June 30, September 30 and December 31
of each year, commencing on September 30, 1998, which payment dates shall
correspond to the interest payment dates on the Debentures, to Holders of record
at the close of business on the regular record date for such Distribution which
shall be the close of business 15 days prior to such Distribution payment date
unless otherwise provided in the Declaration. The Debenture Issuer has the right
under the Indenture to defer payments of interest by extending the interest
payment period from time to time on the Debentures for a period not exceeding 20
consecutive quarters (each an "Extension Period"), provided that no Extension
Period shall last beyond the date of maturity of the Debentures and, as a
consequence of such deferral, Distributions will also be deferred. Despite such
deferral, quarterly Distributions will continue to accrue with interest thereon
(to the extent permitted by applicable law) at the Coupon Rate compounded
quarterly during any such Extension Period. Prior to the termination of any such
Extension Period, the Debenture Issuer may further extend such Extension Period;
provided that such Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarters or extend beyond the
date of maturity of the Debentures. Upon the termination of any Extension Period
and the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
The Common Securities shall be redeemable as provided in the
Declaration.
The Common Securities shall be convertible into Common Shares, through
(i) the exchange of Common Securities for a portion of the Debentures and (ii)
the immediate conversion of such Debentures into Debenture Issuer Common Shares,
in the manner and according to the term set forth in the Declaration.
A2-3
727341.10
CONVERSION REQUEST
To: Wilmington Trust Company,
as Institutional Trustee of CT Convertible Trust I
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Shares of Capital Trust (the "Common Shares") in
accordance with the terms of the Declaration of Trust (the "Declaration"), dated
as of July __, 1998, by John R. Klopp and Sheli Z. Rosenberg, as Regular
Trustees, Wilmington Trust Company, as Delaware Trustee, Wilmington Trust
Company, as Institutional Trustee, Capital Trust, as Sponsor, and by the
Holders, from time to time, of individual beneficial interests in the Trust to
be issued pursuant to the Declaration. Pursuant to the aforementioned exercise
of the option to convert these Common Securities, the undersigned hereby directs
the Conversion Agent (as that term is defined in the Declaration) to (i)
exchange such Common Securities for a portion of the Debentures (as that term is
defined in the Declaration) held by the Trust (at the rate of exchange specified
in the terms of the Common Securities set forth as Annex I to the Declaration)
and (ii) immediately convert such Debentures on behalf of the undersigned, into
Common Shares (at the conversion rate specified in the terms of the Common
Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Date: _______________, ____
in whole _____ in part _____
Number of Common Securities to be
converted: ____________________
If a name or names other than the undersigned,
please indicate in the spaces below the name or
names in which the Common Shares are to be
issued, along with the address or addresses of
such person or persons.
================================================
================================================
------------------------------------------------
------------------------------------------------
Signature (for conversion only)
A2-4
727341.10
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or Other
Identifying Number.
================================================
------------------------------------------------
Signature Guarantee *__________________________
- --------
* (Signature must be guaranteed by an "eligible guarantor institution," that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Conversion Agent, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Conversion Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.)
A2-5
727341.10
[FORM OF ASSIGNMENT FOR SECURITY OR
COMMON SHARES ISSUABLE UPON CONVERSION THEREOF]
For value received ---------------------- hereby sell(s), assign(s) and
transfer(s) unto ---------------------------------------------------------------
(Please insert social security or other taxpayer identification number of
assignee.)
the within security and hereby irrevocably constitutes and appoints ____________
attorney to transfer the said security on the books of the Company, with full
power of substitution in the premises.
In connection with any transfer of the within security occurring prior to the
Transfer Restriction Termination Date, the undersigned confirms that such
security is being transferred:
/ / To Capital Trust or a subsidiary thereof; or
/ / Pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended; or
/ / To an Institutional Accredited Investor pursuant to and in
compliance with the Securities Act of 1933, as amended; or
/ / Pursuant to and in compliance with Regulation S under the
Securities Act of 1933, as amended; or
/ / Pursuant to and in compliance with Rule 144 under the
Securities Act of 1933, as amended; or
/ / Pursuant to an effective registration statement.
and unless the box below is checked, the undersigned confirms that such security
is not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
/ / The transferee is an Affiliate of the Company.
Dated: ____________________________
Signature(s)
--------------------------------------
--------------------------------------
--------------------------------------
Signature Guarantee*
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of this Security in every particular without
alteration or enlargement or any change whatever.
- --------
* (Signature must be guaranteed by an "eligible guarantor institution," that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Conversion Agent, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Conversion Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.)
A2-6
727341.10
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
727341.10