EXHIBIT 4-11
FORM OF AMENDED AND RESTATED TRUST AGREEMENT
OF ENERGY EAST CAPITAL TRUST [ ]
By and Among
ENERGY EAST CORPORATION
as Sponsor,
THE CHASE MANHATTAN BANK
as Property Trustee,
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
as Delaware Trustee,
and
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
Dated as of ________
TABLE OF CONTENTS
PAGE
ARTICLE 1
INTERPRETATION AND DEFINITIONS
Section 1.1. Interpretation and Definitions..................................1
ARTICLE 2
TRUST INDENTURE ACT
Section 2.1. Trust Indenture Act; Application...............................10
Section 2.2. Lists of Holders of Securities.................................10
Section 2.3. Reports by the Property Trustee................................10
Section 2.4. Periodic Reports to the Property Trustee.......................11
Section 2.5. Evidence of Compliance with Conditions Precedent...............11
Section 2.6. Trust Enforcement Events; Waiver...............................11
Section 2.7. Trust Enforcement Event; Notice................................13
ARTICLE 3
ORGANIZATION
Section 3.1. Name and Organization..........................................13
Section 3.2. Office.........................................................13
Section 3.3. Purpose........................................................13
Section 3.4. Authority......................................................14
Section 3.5. Title to Property of the Trust.................................14
Section 3.6. Powers and Duties of the Administrative Trustees...............15
Section 3.7. Prohibition of Actions by the Trust and the Trustees...........17
Section 3.8. Powers and Duties of the Property Trustee......................18
Section 3.9. Certain Duties and Responsibilities of the Property Trustee....20
Section 3.10. Certain Rights of Property Trustee............................22
Section 3.11. Delaware Trustee..............................................24
Section 3.12. Execution of Documents........................................24
Section 3.13. Not Responsible for Recitals or Issuance of Securities........25
Section 3.14. Duration of Trust.............................................25
Section 3.15. Mergers.......................................................25
Section 3.16. Property Trustee May File Proofs of Claim.....................26
ARTICLE 4
SPONSOR
Section 4.1. Responsibilities of the Sponsor................................27
Section 4.2. Fees and Expenses of the Trustees..............................28
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ARTICLE 5
TRUST COMMON SECURITIES HOLDER
Section 5.1. Note Issuer's Purchase of Common Securities....................28
Section 5.2. Covenants of the Common Securities Holder......................29
ARTICLE 6
TRUSTEES
Section 6.1. Number of Trustees.............................................29
Section 6.2. Delaware Trustee; Eligibility..................................29
Section 6.3. Property Trustee; Eligibility..................................30
Section 6.4. Qualifications of Administrative Trustees and Delaware
Trustee Generally..............................................30
Section 6.5. Initial Administrative Trustees................................30
Section 6.6. Appointment, Removal and Resignation of Trustees...............30
Section 6.7. Vacancies among Trustees.......................................32
Section 6.8. Effect of Vacancies............................................32
Section 6.9. Meetings.......................................................32
Section 6.10. Delegation of Power...........................................33
Section 6.11. Merger, Conversion, Consolidation or Succession to
Business... ..................................................33
ARTICLE 7
TERMS OF SECURITIES
Section 7.1. General Provisions Regarding Securities........................33
Section 7.2. Distributions..................................................36
Section 7.3. Redemption of Securities.......................................37
Section 7.4. Redemption Procedures..........................................38
Section 7.5. Voting Rights of Capital Securities............................39
Section 7.6. Voting Rights of Common Securities.............................41
Section 7.7. Paying Agent...................................................43
Section 7.8. Transfer of Securities.........................................43
Section 7.9. Mutilated, Destroyed, Lost or Stolen Certificates..............44
Section 7.10. Deemed Security Holders.......................................45
Section 7.11. Global Securities.............................................45
Section 7.12. Cancellation..................................................47
ARTICLE 8
DISSOLUTION AND TERMINATION OF TRUST
Section 8.1. Dissolution and Termination of Trust...........................47
Section 8.2. Liquidation Distribution Upon Dissolution of the Trust.........48
ARTICLE 9
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, DELAWARE
TRUSTEES OR OTHERS
Section 9.1. Liability......................................................49
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Section 9.2. Exculpation....................................................49
Section 9.3. Fiduciary Duty.................................................50
Section 9.4. Indemnification................................................50
Section 9.5. Outside Businesses.............................................53
ARTICLE 10
ACCOUNTING
Section 10.1. Fiscal Year...................................................53
Section 10.2. Certain Accounting Matters....................................53
Section 10.3. Banking.......................................................54
Section 10.4. Withholding...................................................54
ARTICLE 11
AMENDMENTS AND MEETINGS
Section 11.1. Amendments....................................................55
Section 11.2. Meetings of the Holders of Securities; Action by Written
Consent.......................................................57
ARTICLE 12
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE
Section 12.1. Representations and Warranties of the Property Trustee........58
Section 12.2. Representations and Warranties of the Delaware Trustee........59
ARTICLE 13
MISCELLANEOUS
Section 13.1. Notices.......................................................59
Section 13.2. Governing Law.................................................60
Section 13.3. Intention of the Parties......................................60
Section 13.4. Headings......................................................61
Section 13.5. Successors and Assigns........................................61
Section 13.6. Partial Enforceability........................................61
Section 13.7. Counterparts..................................................61
EXHIBITS
EXHIBIT A - FORM OF CAPITAL SECURITY CERTIFICATE
EXHIBIT B - FORM OF COMMON SECURITY CERTIFICATE
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AMENDED AND RESTATED TRUST AGREEMENT
This AMENDED AND RESTATED TRUST AGREEMENT OF ENERGY EAST CAPITAL
TRUST [ ] (the "Trust Agreement"), dated as of ________, is entered into by and
among (i) Energy East Corporation, a New York corporation, as sponsor (the
"Sponsor"), (ii) (a) The Chase Manhattan Bank, a New York banking corporation,
as initial Property Trustee, (b) Chase Manhattan Bank USA, National Association,
as initial Delaware Trustee, and (c) _______________, an [individual], and
______________, an [individual], each of whose address is P.O. Box 12904,
Albany, New York 12212-2904 (each an "Administrative Trustee" and, collectively,
the "Administrative Trustees" and, together with the Property Trustee and the
Delaware Trustee, the "Trustees," all not in their individual capacities, but
solely as Trustees) and (iii) the several Holders as hereinafter defined.
RECITALS
WHEREAS, the Delaware Trustee and the Sponsor established Energy
East Capital Trust [ ] (the "Trust"), a business trust under the Business Trust
Act (as defined, together with other capitalized terms, herein) pursuant to a
Trust Agreement dated as of ____________, (the "Original Trust Agreement") and a
Certificate of Trust (the "Certificate of Trust") filed with the Secretary of
State of the State of Delaware on _____________;
WHEREAS, the sole purpose of the Trust shall be to issue and sell
certain securities representing undivided beneficial ownership interests in the
assets of the Trust, to invest the proceeds from such sales in the Notes (as
defined herein) issued by the Note Issuer (as defined herein) and to engage in
only those activities necessary, advisable or incidental thereto; and
WHEREAS, the parties hereto, by this Trust Agreement, amend and
restate each and every term and provision of the Original Trust Agreement;
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 Trust Agreement constitute the governing instrument of such business trust,
the Trustees hereby declare that all assets contributed to the Trust be held in
trust for the benefit of the holders, from time to time, of the securities
representing undivided beneficial ownership interests in the assets of the Trust
issued hereunder, subject to the provisions of this Trust Agreement.
ARTICLE 1
INTERPRETATION AND DEFINITIONS
SECTION 1.1. INTERPRETATION AND DEFINITIONS. Unless the context
otherwise requires:
(a) capitalized terms used in this Trust Agreement but not defined
in the preamble above have the meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Trust Agreement has the same
meaning throughout;
(c) all references to "the Trust Agreement" or "this Trust
Agreement" are to this Trust Agreement as modified, supplemented or
amended from time to time;
(d) all references in this Trust Agreement to Articles, Sections,
Recitals and Exhibits are to Articles and Sections of, or Recitals and
Exhibits to, this Trust Agreement unless otherwise specified;
(e) unless otherwise defined in this Trust Agreement, a term defined
in the Trust Indenture Act (as defined herein) has the same meaning when
used in this Trust Agreement;
(f) a reference to the singular includes the plural and vice versa
and a reference to any masculine form of a term shall include the feminine
form of a term, as applicable; and
(g) the following terms have the following meanings:
"Additional Tax Sums" has the meaning specified in Section 4.8 of
the Indenture.
"Administrative Trustee" means any Trustee other than the Property
Trustee and the Delaware Trustee.
"Affiliate" of any specified Person shall mean any other Person
directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such specified Person. For the purposes of
this definition, "control" when used with respect to any specified Person
shall mean the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" shall have meanings correlative to the foregoing.
"Authorized Officer" of a Person means any Person who is authorized
to bind such Person.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having
jurisdiction in the premises judging such Person a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjudication or composition of or in
respect of such Person under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law, or
appointing a receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of such Person or of any substantial
part of its property or ordering the winding up or liquidation of
its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days; or
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(b) the institution by such Person of proceedings to be
adjudicated bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or
the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the
appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of such Person or of any
substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by it in
writing of its inability to pay its debts generally as they become
due and its willingness to be adjudicated a bankrupt, or the taking
of corporate action by such Person in furtherance of any such
action.
"Beneficial Owners" means, for Capital Securities represented by a
Global Security, the Person who acquires an interest in the Capital
Securities which is reflected on the records of the Depositary through the
Depositary Participants.
"Business Day" means any day, other than (i) a Saturday or Sunday,
(ii) a day on which banking institutions in the Borough of Manhattan, The
City of New York are authorized or required by law, regulation or
executive order to close, or (iii) a day on which the Corporate Trust
Office or the Indenture Trustee's principal corporate office is closed for
business.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code Section 3801 ET SEQ., as it may be amended from time
to time, or any successor legislation.
"Capital Security" has the meaning specified in Section 7.1.
"Capital Security Certificate" means a definitive certificate in
fully registered form representing one or more Capital Securities,
substantially in the form of Exhibit A.
"Certificate" means a Common Security Certificate or a Capital
Security Certificate.
"Certificate of Trust" has the meaning specified in the Recitals
hereto.
"Closing Date" means the date or dates on which the Capital
Securities are issued and sold, the initial date of which is also the date
of execution and delivery of this Trust Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation. A reference to a specific section
of the Code refers not only to such specific section but also to any
corresponding provision of any federal tax statute enacted after the date
of this Trust Agreement, as such specific section or corresponding
provision is in effect on the date of application of the provisions of
this Trust Agreement containing such reference.
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"Commission" means the Securities and Exchange Commission or any
successor thereto.
"Common Security" has the meaning specified in Section 7.1.
"Common Security Certificate" means a definitive certificate in
fully registered form representing one or more Common Securities,
substantially in the form of Exhibit B hereto.
"Common Securities Holder" means Energy East Corporation, in its
capacity as purchaser and holder of all of the Common Securities issued by
the Trust, or any successor entity in a transaction involving the Common
Securities Holder that is permitted by Article XI of the Indenture and
pursuant to which the successor agrees in writing to perform the Common
Securities Holder's obligations hereunder.
"Corporate Trust Office" means the office of the Property Trustee at
which at any particular time its corporate trust business shall be
principally administered, which office at the date of execution of this
Trust Agreement is located at 450 West 33rd Street, 15th Floor, New York,
NY 10001, Attention: Institutional Trust Services.
"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.
"Delaware Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 6.2.
"Depositary" means, with respect to Securities issuable in whole or
in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary
for such Securities.
"Depositary Participant" means a member of, or participant in, the
Depositary.
"Direct Action" has the meaning specified in Section 3.8(e).
"Distribution" means a distribution payable to Holders of Securities
in accordance with Section 7.2.
"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
9.4(b).
"Fiscal Year" has the meaning specified in Section 10.1.
"Global Security" means a fully registered, global Capital Security
Certificate.
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"Guarantee" means the Capital Securities Guarantee Agreement, dated
as of_____________ between the Sponsor and the guarantee trustee named
therein in respect of the Securities.
"Holder" means any holder of Securities, as registered on the books
and records of the Trust; provided, however, that in determining whether
the Holders of the requisite Liquidation Amount of Capital Securities have
voted on any matter provided for in this Trust Agreement, then for the
purpose of such determination only (and not for any other purpose
hereunder), if the Capital Securities remain in the form of one or more
Global Securities and if the Depositary which is the holder of such Global
Securities has sent an omnibus proxy to the Trust assigning voting rights
to Depositary Participants to whose accounts the Capital Securities are
credited on the record date, the term "Holders" shall mean such Depositary
Participants acting at the direction of the Beneficial Owners.
"Indemnified Person" means a Note Issuer Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Indenture, dated as of ___________, 2001 as
supplemented and amended by the ______ Supplemental Indenture dated as of
________ (the "______ Supplemental Indenture"), between the Note Issuer
and The Chase Manhattan Bank, as Trustee, pursuant to which the Notes are
to be issued.
"Indenture Event of Default" has the meaning given to the term
"Event of Default" in the Indenture.
"Indenture Trustee" means The Chase Manhattan Bank, in its capacity
as trustee under the Indenture until a successor is appointed thereunder,
and thereafter means such successor trustee.
"Investment Company" means an investment company as defined in the
Investment Company Act and the regulations promulgated thereunder.
"Investment Company Act" means the Investment Company Act of 1940,
as amended from time to time, or any successor legislation.
"Investment Company Event" means the receipt by the Trust of an
opinion of a nationally recognized independent counsel (an "Investment
Company Act Opinion"), 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 (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, which Change in 1940 Act Law becomes effective
on or after the Closing Date.
"Legal Action" has the meaning specified in Section 3.6(g).
"Liquidation Amount" means the stated amount of $_____ per Capital
Security.
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"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount" means, except as provided in the
terms of the Capital 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 Capital 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 accumulated and unpaid Distributions to the date upon
which the voting percentages are determined) of all outstanding Securities
of the relevant class.
"Notes" shall mean the __% Junior Subordinated Debt Securities due
________ to be issued, from time to time, by the Note Issuer under the
Indenture.
"Note Issuer" shall mean Energy East Corporation, a New York
corporation, in its capacity as issuer of the Notes under the Indenture,
or any successor entity in a transaction involving the Note Issuer that is
permitted by Article XI of the Indenture and pursuant to which the
successor agrees in writing to perform the Note Issuer's obligations
hereunder.
"Note Issuer Indemnified Person" shall mean (A) any Administrative
Trustee, (B) any Affiliate of any Administrative Trustee, (C) any
officers, directors, shareholders, members, partners, employees,
representatives or agents of any Administrative Trustee or any Affiliate
thereof or (D) any officer, employee or agent of the Trust or its
Affiliates.
"Officers' Certificate" means, with respect to any Person, a
certificate signed on behalf of such Person by two Authorized Officers of
such Person. To the extent applicable, such certificate will also specify
procedures, acceptable to the Property Trustee, regarding the issuance of
a Tranche of Securities. Any Officers' Certificate delivered with respect
to compliance with a condition or covenant provided for in this Trust
Agreement shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the
definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer on behalf of
such Person in rendering the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer on behalf of such Person 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 acting on behalf of such Person, such condition or covenant
has been complied with; provided, that the term "Officers'
Certificate", when used with reference to Administrative Trustees
who are natural persons shall mean a certificate signed
6
by two or more of the Administrative Trustees which otherwise
satisfies the foregoing requirements.
Any certificate, statement or opinion of an officer of the Sponsor
or the Administrative Trustees may be based, insofar as it relates to
legal matters, upon a certificate or opinion of or representations by
counsel, unless such officer or Administrative Trustee, as applicable,
knows that the certificate or opinion or representations with respect to
the matters upon which his certificate, statement or opinion may be based
as aforesaid are erroneous, or in the exercise of reasonable care should
know that the same are erroneous. Any certificate, statement or opinion of
counsel may be based, insofar as it relates to factual matters, upon the
certificate, statement or opinion of or representations by an officer or
officers of the Sponsor or the Administrative Trustee or Administrative
Trustees, as applicable, stating that the information with respect to such
factual matters is in the possession of the Sponsor or an Administrative
Trustee, as applicable, unless such counsel knows that the certificate,
statement or opinion or representations with respect to the matters upon
which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same
are erroneous.
Any certificate, statement or opinion of an officer of the Sponsor
or the Administrative Trustees or of counsel may be based, insofar as it
relates to accounting matters, upon a certificate or opinion of or
representations by an accountant or firm of accountants, unless such
officer or counsel, as the case may be, knows that the certificate or
opinion or representations with respect to the accounting matters upon
which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same
are erroneous. Any certificate or opinion of any independent firm of
public accountants filed with the Trustee shall contain a statement that
such firm is independent.
"Paying Agent" has the meaning specified in Section 7.7.
"Payment Amount" has the meaning specified in Section 7.2(c).
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, business trust, unincorporated
association, or government or any agency or political subdivision thereof,
or any other entity of whatever nature.
"Property Account" has the meaning specified in Section 3.8(c).
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 6.3.
"Pro Rata" means 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.
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"Quorum" means a majority of the Administrative Trustees or, if
there are only two Administrative Trustees, both of them.
"Redemption/Distribution Notice" has the meaning specified in
Section 7.4(a) hereto.
"Redemption Price" means, with respect to any Security, the
Liquidation Amount of the Securities to be redeemed, which amount will
equal (i) the redemption price paid by the Note Issuer to repay or redeem,
in whole or in part, the Notes held by the Trust plus an amount equal to
accumulated and unpaid Distributions on such Securities through the date
of their redemption or (ii) such lesser amount as will be received by the
Trust in respect of the Notes so repaid or redeemed.
"Responsible Officer" means, with respect to the Property Trustee,
any officer with direct responsibility for the administration of this
Trust Agreement and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of
that officer's knowledge of and familiarity with the particular subject.
"Securities" means the Common Securities and the Capital Securities.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"Special Event" means a Tax Event or an Investment Company Event.
"Sponsor" means Energy East Corporation, a New York corporation, or
any successor entity in a transaction involving the Sponsor that is
permitted by Article XI of the Indenture and pursuant to which the
successor agrees in writing to perform the Sponsor's obligations
hereunder.
"Successor Delaware Trustee" has the meaning specified in Section
6.6(b).
"Successor Entity" has the meaning specified in Section 3.15(b)(i).
"Successor Property Trustee" has the meaning specified in Section
6.6(b).
"Successor Security" has the meaning specified in Section
3.15(b)(i)(B).
"Super Majority" has the meaning specified in Section 2.6(a)(ii).
"Tax Event" means the receipt by the Sponsor and the Trust of an
opinion of independent tax counsel experienced in such matters ("Tax Event
Opinion"), to the effect that, as a result of (a) any amendment to, change
in or announced prospective change in the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, or (b) any official administrative written
decision, pronouncement or action, or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective
or which proposed change,
8
pronouncement, decision or action is announced on or after the Closing
Date, there is more than an insubstantial risk that (i) the Trust is, or
will be within 90 days of the date of such opinion, subject to the United
States federal income tax with respect to income received or accrued on
the Notes, (ii) interest payable to the Trust by the Note Issuer on the
Notes is not, or within 90 days of the date of such opinion, will not be,
deductible, in whole or in part, by the Note Issuer for United States
federal income tax purposes, or (iii) the Trust is, or will be within 90
days after the date of such opinion, subject to a material amount of other
taxes, duties or other governmental charges.
"10% in Liquidation Amount" means, except as provided in the terms
of the Capital 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 Capital Securities or Holders
of outstanding Common Securities, voting separately as a class, who are
the record owners of 10% or more of the aggregate Liquidation Amount
(including the stated amount that would be paid on redemption, liquidation
or otherwise, plus accrued and unpaid Distributions to the date upon which
the voting percentages are determined) of all outstanding Securities of
the relevant class.
"Tranche" means Securities issued after the initial Closing Date
which are of the same series as the Securities and have identical terms as
the Securities, except for aggregate amount, the price at which such
Securities are sold to the public and the date of issuance.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to
time (including corresponding provisions of succeeding regulations).
"Trust Enforcement Event" in respect of the Securities means (i) an
Indenture Event of Default has occurred and is continuing in respect of
the Notes or (ii) the voluntary or involuntary dissolution, winding up or
termination of the Trust, except in connection with (A) the distribution
of the Notes to the holders of the Securities, (B) the redemption of all
of the Securities and (C) mergers, consolidations or amalgamations of the
Trust permitted by this Trust Agreement.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Trustee" or "Trustees" means each Person who has signed this Trust
Agreement as a trustee, so long as such Person shall continue as a trustee
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 Property" means (i) the Notes, (ii) any cash on deposit in,
or owing to the Property Account and (iii) all proceeds and rights in
respect of the foregoing and any
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other property and assets for the time being held or deemed to be held by
the Property Trustee pursuant to this Trust Agreement.
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION. (a) This Trust
Agreement is subject to the provisions of the Trust Indenture Act that are
required to be part of this Trust Agreement and shall, to the extent applicable,
be governed by such provisions.
(b) The Property Trustee shall be the only Trustee that is a Trustee
for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Trust Agreement
conflicts with the duties imposed by Sections 310 to 317, inclusive, of the
Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Trust
Agreement shall not affect the Trust's classification as a grantor trust for
United States federal income tax purposes and shall not affect the nature of the
Securities as representing undivided beneficial ownership interests in the
assets of the Trust.
SECTION 2.2. LISTS OF HOLDERS OF SECURITIES. (a) Each of the Sponsor
and the Administrative Trustees on behalf of the Trust shall provide the
Property Trustee at any time when the Property Trustee is not also acting as
Security Registrar for the Securities (i) except while the Capital Securities
are represented by one or more Global Securities, at least five Business Days
prior to the date for payment of Distributions, a list, in such form as the
Property Trustee may reasonably require, of the names and addresses of the
Holders of the Securities ("List of Holders") as of the record date relating to
the payment of such Distributions, and (ii) at any other time, within 30 days of
receipt by the Trust of a written request from the Property Trustee for a List
of Holders, as of a date no more than 15 days before such List of Holders is
given to the Property Trustee; provided that neither the Sponsor nor the
Administrative Trustees on behalf of the Trust shall be obligated to provide
such List of Holders at any time the List of Holders does not differ from the
most recent List of Holders given to the Property Trustee by the Sponsor and the
Administrative Trustees on behalf of the Trust. The Property Trustee shall
preserve, in as current a form as is reasonably practicable, all information
contained in Lists of Holders given to it or which it receives in the capacity
as Paying Agent (if acting in such capacity), provided that the Property Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.
(b) The Property Trustee shall comply with its obligations under,
and shall be entitled to the benefits of, Sections 311(a), 311(b) and 312(b) of
the Trust Indenture Act.
SECTION 2.3. REPORTS BY THE PROPERTY TRUSTEE. Within 60 days after
the first May 15 which occurs not less than 60 days following the initial
Closing Date, and within 60 days after May 15 in every year thereafter, so long
as any Capital Securities are outstanding hereunder, the Property Trustee shall
provide to the Holders of the Capital Securities such
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reports as are required by Section 313(a) of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Property Trustee shall also comply with the other requirements of Section
313 of the Trust Indenture Act. The Sponsor shall promptly notify the Property
Trustee when the Capital Securities are listed on any stock exchange.
SECTION 2.4. PERIODIC REPORTS TO THE PROPERTY TRUSTEE. Each of the
Sponsor and the Administrative Trustees on behalf of the Trust shall provide to
the Property Trustee such documents, reports and information as required by
Section 314 of the Trust Indenture Act (if any) and the compliance certificate
required by Section 314(a)(4) of the Trust Indenture Act in the form, in the
manner and at the times required by Section 314 of the Trust Indenture Act,
provided that such compliance certificate shall be delivered on or before 120
days after the end of each calendar year of the Sponsor.
SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. Each
of the Sponsor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Trust Agreement that relate to any of
the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6. TRUST ENFORCEMENT EVENTS; WAIVER. (a) The Holders of a
Majority in Liquidation Amount of the Capital Securities may, by vote or written
consent, on behalf of the Holders of all of the Capital Securities, waive any
past Trust Enforcement Event in respect of the Capital Securities and its
consequences, provided that, if the underlying Indenture Event of Default:
(i) is not waivable under the Indenture, the Trust Enforcement Event
under the Trust Agreement shall also not be waivable; or
(ii) requires the consent or vote of the Holders of greater than a
majority in principal amount of the Notes (a "Super Majority") to be
waived under the Indenture, the related Trust Enforcement Event under the
Trust Agreement may only be waived by the vote or written consent of the
Holders of at least the proportion in Liquidation Amount of the Capital
Securities that the relevant Super Majority represents of the aggregate
principal amount of the Notes outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Trust Agreement
and the Securities, as permitted by the Trust Indenture Act. Upon such waiver,
any such default shall cease to exist, and any Trust Enforcement Event with
respect to the Capital Securities arising therefrom shall be deemed to have been
cured for every purpose of this Trust Agreement and the Capital Securities, but
no such waiver shall extend to any subsequent or other Trust Enforcement Event
with respect to the Capital Securities or impair any right consequent thereon.
Any waiver by the Holders of the Capital Securities of a Trust Enforcement Event
with respect to the Capital Securities shall also be deemed to constitute a
waiver by the Holders of the Common Securities of any such
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Trust Enforcement Event with respect to the Common Securities for all purposes
of this Trust Agreement 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 or written consent, on behalf of the Holders of all of
the Common Securities, waive any past Trust Enforcement Event in respect of the
Common Securities and its consequences, provided that, if the underlying
Indenture Event of Default:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Trust Enforcement
Event under the Trust Agreement as provided below in this Section 2.6(b),
the Trust Enforcement Event under the Trust Agreement shall also not be
waivable; or
(ii) requires the consent or vote of a Super Majority to be waived
under the Indenture, except where the Holders of the Common Securities are
deemed to have waived such Trust Enforcement Event under the Trust
Agreement as provided below in this Section 2.6(b), the Trust Enforcement
Event under the Trust Agreement may only be waived by the vote or written
consent 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 Notes outstanding; provided further,
each Holder of Common Securities will be deemed to have waived any Trust
Enforcement Event and all Trust Enforcement Events with respect to the
Common Securities and the consequences thereof until all Trust Enforcement
Events with respect to the Capital Securities have been cured, waived or
otherwise eliminated, and until such Trust Enforcement Events with respect
to the Capital Securities have been so cured, waived or otherwise
eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the Holders of the Capital Securities and only the Holders of
the Capital Securities will have the right to direct the Property Trustee
in accordance with the terms of the Securities. The foregoing provisions
of this Section 2.6(b) shall be in lieu of Sections 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act and such Sections 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act are hereby expressly excluded from
this Trust Agreement and the Securities, as permitted by the Trust
Indenture Act. Subject to the foregoing provisions of this Section 2.6(b),
upon such cure, waiver or other elimination, any such default shall cease
to exist and any Trust Enforcement Event with respect to the Common
Securities arising therefrom shall be deemed to have been cured for every
purpose of this Trust Agreement, but no such waiver shall extend to any
subsequent or other Trust Enforcement Event with respect to the Common
Securities or impair any right consequent thereon.
(c) A waiver of an Indenture Event of Default by the Property
Trustee at the direction of the Holders of the Capital Securities constitutes a
waiver of the corresponding Trust Enforcement Event with respect to the Capital
Securities under this Trust Agreement. The foregoing provisions of this Section
2.6(c) shall be in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and
such Section 316(a)(1)(B) of the Trust Indenture Act is hereby expressly
excluded from this Trust Agreement and the Securities, as permitted by the Trust
Indenture Act.
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SECTION 2.7. TRUST ENFORCEMENT EVENT; NOTICE. (a) The Property
Trustee shall, within 90 days after the occurrence of a Trust Enforcement Event
actually known to a Responsible Officer of the Property 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) and (b) being hereby defined to be an Indenture Event of
Default, 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 Notes, the Property Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the Property
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of
any default except:
(i) a default under Sections 6.1(a) and (b) of the Indenture; or
(ii) any default as to which the Property Trustee shall have
received written notice pursuant to Section 3.10(a)(xiv) or of which a
Responsible Officer of the Property Trustee charged with the
administration of this Trust Agreement shall have actual knowledge.
ARTICLE 3
ORGANIZATION
SECTION 3.1. NAME AND ORGANIZATION. The Trust hereby continued is
named "Energy East Capital Trust [ ]" as such name may be modified from time to
time by the Administrative Trustees following written notice to the Holders of
Securities, the Property Trustee and the Delaware Trustee. The Trust's
activities may be conducted under the name of the Trust or any other name deemed
advisable by the Administrative Trustees.
SECTION 3.2. OFFICE. The address of the principal office of the
Trust is c/o Energy East Corporation, P.O. Box 12904, Albany, New York
12212-2904. On 10 Business Days' written notice to the Holders of Securities,
the Property Trustee and the Delaware Trustee, the Administrative Trustees may
designate another principal office.
SECTION 3.3. PURPOSE. The exclusive purposes and functions of the
Trust are (a) to issue and sell Securities, including, from time to time,
Tranches thereof, and use the gross proceeds from such sales to acquire the
Notes, and (b) except as otherwise limited herein, to engage in only those other
activities necessary, advisable 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 as a grantor trust for
United States federal income tax purposes.
By the acceptance of this Trust, none of the Trustees, the Sponsor,
the Holders of the Capital Securities or Common Securities or the Beneficial
Owners will take any position for
13
United States federal income tax purposes which is contrary to the
classification of the Trust as a grantor trust.
SECTION 3.4. AUTHORITY. Subject to the limitations provided in this
Trust Agreement and to the specific duties of the Property Trustee, the
Administrative Trustees shall have exclusive authority to carry out the purposes
of the Trust. An action taken by the Administrative Trustees in accordance with
their powers shall constitute the act of and serve to bind the Trust and an
action taken by the Property Trustee on behalf of the Trust in accordance with
its powers shall constitute the act of and serve to bind the Trust. In dealing
with the Trustees acting on behalf of the Trust, no Person shall be required to
inquire into the authority of the Trustees to bind the Trust. Persons dealing
with the Trust are entitled to rely conclusively on the power and authority of
the Trustees as set forth in this Trust Agreement.
(a) Except as expressly set forth in this Trust Agreement and except
if a meeting of the Administrative Trustees is called with respect to any matter
over which the Administrative Trustees have power to act, any power of the
Administrative Trustees may be exercised by, or with the consent of, any one
such Administrative Trustee.
(b) Unless otherwise determined by the Administrative Trustees, and
except as otherwise required by the Business Trust Act or applicable law, any
Administrative Trustee is authorized to execute on behalf of the Trust any
documents which the Administrative Trustees have the power and authority to
cause the Trust to execute pursuant to Section 3.6(b), provided, that the
registration statements referred to in Section 4.1(a), including any amendments
thereto, shall be signed by or on behalf of the Sponsor.
(c) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purposes of signing any documents which the Administrative
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 Notes and the Property Account or as otherwise
provided in this Trust Agreement, legal title to the Trust Property shall be
vested in the Trust. The Holders shall not have legal title to any part of the
assets of the Trust, but shall have an undivided beneficial ownership interest
in the assets of the Trust. The Property Trustee hereby declares that it will
hold the Trust Property in trust upon and subject to the conditions set forth
herein for the benefit of the Trust and the holders of the Securities.
SECTION 3.6. POWERS AND DUTIES OF THE ADMINISTRATIVE TRUSTEES. The
Administrative Trustees shall have the exclusive power, duty and authority to
cause the Trust to engage in the following activities:
(a) issue and sell the Capital Securities (including, from time to
time, Tranches thereof) and the Common Securities (including, from time to
time, Tranches thereof) in accordance with this Trust Agreement; provided,
however, that the Trust may issue no more than one series of Capital
Securities and no more than one series of Common Securities, and, provided
further, that there shall be no interests in the Trust
14
other than the Securities; and the issuance of Securities (including
Tranches) shall be limited to simultaneous issuances of both Capital
Securities and Common Securities on each Closing Date;
(b) in connection with each issue and sale of the Capital
Securities, at the direction of the Sponsor, to:
(i) execute and file an application, prepared by the Sponsor,
to the New York Stock Exchange or any other national stock exchange
or automated quotation system for listing (if necessary) of any
Capital Securities, the Guarantee and the Notes;
(ii) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be necessary, in
order to qualify or register all or part of the Capital Securities
in any State in which the Sponsor has determined to qualify or
register such Capital Securities for sale; and
(iii) execute any Agreement as to Expenses and Liabilities
between the Trust and the Note Issuer;
(c) to acquire the Notes with the proceeds of each sale of the
Capital Securities and the Common Securities; provided, however, that the
Administrative Trustees shall cause legal title to the Notes to be held of
record in the name of the Property Trustee for the benefit of the Trust,
Holders of the Capital Securities and the Holders of the Common
Securities;
(d) to give the Sponsor and the Property Trustee prompt
written notice of the occurrence of a Special Event; provided that the
Administrative Trustees shall consult with the Sponsor before taking or
refraining from taking any action in relation to any such Special Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and
with respect to, for the purposes of Section 316(c) of the Trust Indenture
Act, Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Capital 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 Administrative Trustees pursuant to the terms of this Trust
Agreement and the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the Property
Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors
and consultants to
15
conduct only those services that the Administrative Trustees have
authority to conduct directly, and to and pay reasonable compensation for
such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of the
Trust Indenture Act to the Property Trustee, which certificate may be
executed by any Administrative 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 and
transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities
of any notice received from the Note Issuer of its election to defer
payments of interest on the Notes by extending the interest payment period
under the Notes as authorized by the Indenture;
(n) 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 Capital Securities and the Holders of the Common Securities or to
enable the Trust to effect the purposes for which the Trust was created;
(o) to take any action, not inconsistent with applicable law, that
the Administrative Trustees determine in their discretion to be necessary
or desirable in carrying out the purposes and functions of the Trust as
set out in Section 3.3 or 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 as a grantor trust for
United States federal income tax purposes; and
(iii) cooperating with the Note Issuer to ensure that the
Notes will be treated as indebtedness of the Note Issuer for United
States federal income tax purposes;
(p) 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 Administrative Trustees, on
behalf of the Trust;
16
(q) to execute and deliver 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; and
(r) to cause to be delivered to the Property Trustee an Officers'
Certificate with respect to each issuance of a Tranche of Securities.
The Administrative Trustees shall 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 Administrative Trustees shall have
no power to, and 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 Administrative Trustees shall have
none of the powers or the authority of the Property Trustee set forth in Section
3.8.
Any expenses incurred by the Administrative Trustees pursuant to
this Section 3.6 shall be reimbursed by the Note Issuer.
SECTION 3.7. PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES.
(a) The Trust shall not, and none of the Trustees (including the Property
Trustee) shall cause the Trust to, engage in any activity other than as required
or authorized by this Trust Agreement. In particular, the Trust shall not and
none of the Trustees (including the Property Trustee) shall cause the Trust to:
(i) invest any proceeds received by the Trust from holding the
Notes, but shall distribute all such proceeds to Holders of Securities
pursuant to the terms of this Trust Agreement and of the Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust Property for other than a Trust purpose;
(iv) make any loans other than loans represented by the Notes or
incur any indebtedness;
(v) possess any power or otherwise act in such a way as to vary the
Trust Property;
(vi) possess any power or otherwise act in such a way as to vary the
terms of the Securities in any way whatsoever (except to the extent
expressly authorized in this Trust Agreement or by the terms of the
Securities);
(vii) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities;
(viii) other than as provided in this Trust Agreement or by the
terms of the Securities, (A) direct the time, method and place of
exercising any trust or power conferred upon the Indenture Trustee with
respect to the Notes, (B) waive any past
17
default that is waivable under the Indenture, (C) exercise any right to
rescind or annul any declaration that the principal of all the Notes shall
be due and payable, or (D) consent to any amendment, modification or
termination of the Indenture or the Notes where such consent shall be
required unless the Trust shall have received an opinion of counsel to the
effect that such amendment or modification will not cause more than an
insubstantial risk that the Trust will be deemed an Investment Company
required to be registered under the Investment Company Act, or the Trust
will not be classified as a grantor trust for United States federal income
tax purposes;
(ix) take any action inconsistent with the status of the Trust as a
grantor trust for United States federal income tax purposes; or
(x) revoke any action previously authorized or approved by vote of
the Holders of the Capital Securities except pursuant to a subsequent vote
of the Holders of the Capital Securities.
SECTION 3.8. POWERS AND DUTIES OF THE PROPERTY TRUSTEE. (a) The
legal title to the Notes shall be owned by and held of record in the name of the
Property Trustee for the benefit of the Trust and the Holders of the Securities.
The right, title and interest of the Property Trustee to the Notes shall vest
automatically in each Person who may hereafter be appointed as Property Trustee
in accordance with Section 6.6. Such vesting and cessation of title shall be
effective whether or not conveyancing documents with regard to the Notes have
been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Notes to the Administrative Trustees or to the Delaware Trustee
(if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Property Account") in the name of and under the exclusive
control of the Property Trustee on behalf of the Holders of the Securities
and, upon the receipt of payments of funds made in respect of the Notes
held by the Property Trustee, deposit such funds into the Property Account
and make payments to the Holders of the Capital Securities and Holders of
the Common Securities from the Property Account in accordance with Section
7.2. Funds in the Property Account shall be held uninvested until
disbursed in accordance with this Trust Agreement. The Property Account
shall be an account that is maintained with a banking institution the
rating on whose long-term unsecured indebtedness is at least equal to the
rating assigned to the Capital Securities by a "nationally recognized
statistical rating organization," within the meaning 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 Capital Securities and the
Common Securities to the extent the Notes are redeemed or mature; and
18
(iii) upon written notice of distribution issued by the
Administrative Trustees in accordance with the terms of the Securities,
engage in such ministerial activities as so directed and as shall be
necessary or appropriate to effect the distribution of the Notes to
Holders of Securities upon the occurrence of a Special Event.
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to the
terms of this Trust Agreement and the Securities.
(e) Subject to Section 3.9(a) the Property Trustee may take any
Legal Action which arises out of or in connection with a Trust Enforcement Event
of which a Responsible Officer of the Property Trustee has actual knowledge or
the Property Trustee's duties and obligations under this Trust Agreement or the
Trust Indenture Act; provided, however, if the Property Trustee fails to enforce
its rights under this Trust Agreement or the Indenture, then to the fullest
extent permitted by law and subject to the terms of this Trust Agreement and the
Indenture, a Holder of Capital Securities may directly institute a proceeding
against the Note Issuer to enforce the Property Trustee's rights under this
Trust Agreement or the Indenture without first instituting a legal proceeding
against the Property Trustee or any other person; provided, further, that if a
Trust Enforcement Event has occurred and is continuing and such event is
attributable to the failure of the Note Issuer to pay interest, principal or
other required payments on the Notes on the date such interest, principal or
other required payments are otherwise payable (or in the case of redemption, on
the redemption date), then a Holder of Capital Securities may directly institute
a proceeding against the Note Issuer for enforcement of payment to such Holder
of the principal, interest or other required payments on Notes having a
principal amount equal to the aggregate Liquidation Amount of the Capital
Securities of such Holder (a "Direct Action") on or after the respective due
date specified in the Notes. Notwithstanding anything to the contrary in this
Trust Agreement or the Indenture, the Note Issuer shall have the right to
set-off any payment it is otherwise required to make under the Indenture in
respect of any Capital Security to the extent the Note Issuer has heretofore
made, or is currently on the date of such payment making, a payment under the
Guarantee relating to such Capital Security or under Section 6.5 of the
Indenture.
(f) The Property 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 Property Trustee has been appointed and has
accepted that appointment in accordance with Section 6.6.
(g) The Property Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a holder of Notes under the Indenture
and, if a Trust Enforcement Event actually known to a Responsible Officer of the
Property Trustee occurs and is continuing, the Property Trustee may, for the
benefit of Holders of the Securities, enforce its rights as holder of the Notes
subject to the rights of the Holders pursuant to this Trust Agreement and the
terms of the Securities.
19
(h) Subject to this Section 3.8, the Property Trustee shall have
none of the duties, liabilities, powers or the authority of the Administrative
Trustees set forth in Section 3.6.
The Property Trustee shall exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Property Trustee shall have no power
to, and shall not, take any action that is inconsistent with the purposes and
functions of the Trust set out in Section 3.3.
SECTION 3.9. CERTAIN DUTIES AND RESPONSIBILITIES OF THE PROPERTY
Trustee. (a) The Property Trustee, before the occurrence of any Trust
Enforcement Event and after the curing of all Trust Enforcement Events that may
have occurred, shall undertake to perform only such duties as are specifically
set forth in this Trust Agreement and no implied covenants shall be read into
this Trust Agreement against the Property Trustee. In case a Trust Enforcement
Event has occurred (that has not been cured or waived pursuant to Section 2.6)
of which a Responsible Officer of the Property Trustee has actual knowledge, the
Property Trustee shall exercise such of the rights and powers vested in it by
this Trust Agreement, 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 Trust Agreement shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of a Trust Enforcement Event and after
the curing or waiving of all such Trust Enforcement Events that may have
occurred:
(A) the duties and obligations of the Property Trustee shall
be determined solely by the express provisions of this Trust
Agreement and the Property Trustee shall not be liable except for
the performance of such duties and obligations as are specifically
set forth in this Trust Agreement, and no implied covenants or
obligations shall be read into this Trust Agreement against the
Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Property
Trustee and conforming to the requirements of this Trust Agreement;
but in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to the
Property Trustee, the Property Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Trust Agreement;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was negligent
in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it, in good faith in accordance
with the direction of the Holders of
20
not less than a Majority in Liquidation Amount of the Securities relating
to the time, method and place of conducting any proceeding for any remedy
available to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under this Trust Agreement;
(iv) no provision of this Trust Agreement shall require the Property
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Trust Agreement or
indemnity reasonably satisfactory to the Property Trustee against such
risk or liability is not reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the custody,
safe-keeping and physical preservation of the Notes and the Property
Account shall be to deal with such property in a similar manner as the
Property Trustee deals with similar property for its own account, subject
to the protections and limitations on liability afforded to the Property
Trustee under this Trust Agreement and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability for or
with respect to the value, genuineness, existence or sufficiency of the
Notes or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Property Trustee shall not be liable for any interest on
any money received by it except as it may otherwise agree with the
Sponsor. Money held by the Property Trustee need not be segregated from
other funds held by it except in relation to the Property Account
maintained by the Property Trustee pursuant to Section 3.8(c)(i) and
except to the extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible for monitoring
the compliance by the Administrative Trustees or the Sponsor with their
respective duties under this Trust Agreement, nor shall the Property
Trustee be liable for any default or misconduct of the Administrative
Trustees or the Sponsor.
SECTION 3.10. CERTAIN RIGHTS OF PROPERTY TRUSTEE. (a) Subject to the
provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Administrative
Trustees contemplated by this Trust Agreement shall be sufficiently
evidenced by an Officers' Certificate;
21
(iii) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, request and conclusively
rely upon an Officers' Certificate which, upon receipt of such request,
shall be promptly delivered by the Sponsor or the Administrative Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any re-recording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel of its choice 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 Property Trustee or the Sponsor or any of its Affiliates,
and may include any of its employees. The Property Trustee shall have the
right at any time to seek instructions concerning the administration of
this Trust Agreement from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Trust Agreement at the
request or direction of any Holder, unless such Holder shall have provided
to the Property Trustee security and indemnity, reasonably satisfactory to
the Property Trustee, against the costs, expenses (including reasonable
attorneys' fees and expenses and the expenses of the Property Trustee's
agents, nominees or custodians) and liabilities that might be incurred by
it in complying with such request or direction, including such reasonable
advances as may be requested by the Property Trustee; provided that,
nothing contained in this Section 3.10(a) shall be taken to relieve the
Property Trustee, upon the occurrence of a Trust Enforcement Event, of its
obligation to exercise the rights and powers vested in it by this Trust
Agreement in the manner provided by Section 3.9(a);
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Property Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, custodians, nominees or attorneys and the Property Trustee shall
not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Property Trustee or
22
its agents alone shall be sufficient and effective to perform any such
action and no third party shall be required to inquire as to the authority
of the Property Trustee to so act or as to its compliance with any of the
terms and provisions of this Trust Agreement, both of which shall be
conclusively evidenced by the Property Trustee's or its agent's taking
such action;
(x) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Property Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the
Holders of the same proportion in Liquidation Amount of the Securities as
would been entitled to direct the Property Trustee under the terms of the
Securities in respect of such remedy, right or action, (ii) may refrain
from enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in conclusively
relying on or acting in or accordance with such instructions;
(xi) except as otherwise expressly provided by this Trust Agreement,
the Property Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Trust Agreement;
(xii) the Property Trustee shall not be personally liable for the
payment of any indebtedness or expenses of the Trust or be liable for the
breach or failure of any obligation, representation, warranty or covenant
made or undertaken by the Trust under this Trust Agreement, except if such
breach or failure is due to any gross negligence or willful misconduct of
the Property Trustee;
(xiii) without prejudice to any other rights available to the
Property Trustee under applicable law, when the Property Trustee incurs
expenses or renders services in connection with a bankruptcy, such
expenses (including the reasonable fees and expenses of its counsel) and
the compensation for such services are intended to constitute expenses of
administration under any bankruptcy law or law relating to creditors
rights generally;
(xiv) the Property Trustee shall not be charged with knowledge of a
Trust Enforcement Event unless a Responsible Officer of the Property
Trustee obtains actual knowledge of such event or the Property Trustee
receives written notice of such event from Holders holding more than a
Majority in Liquidation Amount of the Capital Securities; and
(b) No provision of this Trust Agreement shall be deemed to impose
any duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 3.11. DELAWARE TRUSTEE. Notwithstanding any other provision
of this Trust Agreement other than Section 6.2, the Delaware Trustee shall not
be entitled to exercise
23
any powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Administrative Trustees or the Property Trustee
described in this Trust Agreement. Except as set forth in Section 6.2, the
Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of Section 3807(a) of the Business Trust Act. In the
event the Delaware Trustee shall at any time be required to take any action or
perform any duty hereunder with respect to the Trust, the Delaware Trustee shall
be entitled to all of the same rights as the Property Trustee listed in Section
3.9(b) and Section 3.10. No implied covenants or obligations shall be read into
this Trust Agreement against the Delaware Trustee. It is expressly understood
and agreed by the parties hereto that in fulfilling its obligations as Delaware
Trustee hereunder on behalf of the Trust (i) any agreements or instruments
executed and delivered by Chase Manhattan Bank USA, National Association, or any
Successor Delaware Trustee, are executed and delivered not in its individual
capacity but solely as Delaware Trustee under this Trust Agreement in the
exercise of the powers and authority conferred and vested in it, (ii) each of
the representations, undertakings and agreements herein made on the part of the
Trust is made and intended not as representations, warranties, covenants,
undertakings and agreements by Chase Manhattan Bank USA, National Association,
or any Successor Delaware Trustee, in its individual capacity but is made and
intended for the purpose of binding only the Trust, and (iii) under no
circumstances shall Chase Manhattan Bank USA, National Association, or any
Successor Delaware Trustee, in its individual capacity be personally liable for
the payment of any indebtedness or expenses of the Trust or be liable for the
breach or failure of any obligation, representation, warranty or covenant made
or undertaken by the Trust under this Trust Agreement, except if such breach or
failure is due to any gross negligence or willful misconduct of the Delaware
Trustee.
SECTION 3.12. EXECUTION OF DOCUMENTS. Unless otherwise determined by
the Administrative Trustees, and except as otherwise required by the Business
Trust Act or applicable law, any Administrative Trustee is authorized to execute
on behalf of the Trust any documents that the Administrative Trustees have the
power and authority to execute pursuant to Section 3.6; provided that the
registration statements referred to in Section 4.1(a), including any amendments
thereto, shall be signed by or on behalf of the Sponsor.
SECTION 3.13. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES. The recitals contained in this Trust Agreement 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
Trust Agreement, the Securities, the Notes or the Indenture.
SECTION 3.14. DURATION OF TRUST. The Trust shall exist until
terminated pursuant to the provisions of Article 8 hereof.
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 substantially as an entirety to any Person, except as
described in Section 3.15(b) and (c) or Section 8.2.
(b) The Trust may, at the request of the Sponsor and with the
consent of the Administrative Trustees or, if there are more than two, a
majority of the Administrative Trustees
24
and without the consent of the Holders of the Securities, the Delaware Trustee
or the Property Trustee, consolidate, amalgamate, merge with or into, or be
replaced by or convey, transfer or lease its properties substantially as an
entirety to a trust organized as such under the laws of any State; provided,
that:
(i) if the Trust is not the successor, such successor entity (the
"Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust with
respect to the Securities; or
(B) substitutes for the Capital Securities other securities
having substantially the same terms as the Capital Securities (the
"Successor Securities") so long as the Successor Securities rank the
same as the Capital Securities rank in priority with respect to
Distributions and payments upon liquidation, redemption and
otherwise;
(ii) if the Trust is not the successor Entity, the Sponsor expressly
appoints a trustee of such Successor Entity that possesses the same powers
and duties as the Property Trustee as the holder of the Notes;
(iii) the Capital Securities or any Successor Securities are listed,
or any Successor Securities will be listed upon notification of issuance,
on any national securities exchange or with any other or organization on
which the Capital Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Capital Securities
(including any Successor Securities) to be downgraded by any nationally
recognized statistical rating organization;
(v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders of the Capital Securities
(including any Successor Securities) in any material respect;
(vi) such Successor Entity has a purpose substantially identical to
that of the Trust;
(vii) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease the Sponsor has received an
opinion of independent counsel to the Trust experienced in such matters to
the effect that:
(A) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders of the Capital Securities
(including any Successor Securities) in any material respect; and
25
(B) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease neither the Trust nor the
Successor Entity will be required to register as an Investment
Company;
(viii) the Sponsor or any permitted successor or assignee owns all
of the common securities and guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided by
the Guarantee; and
(ix) such Successor Entity expressly assumes all of the obligations
of the Trust with respect to the Trustees.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except
with the consent of Holders of 100% in aggregate Liquidation Amount of the
Securities, consolidate, amalgamate, merge with or into, or be replaced by or
convey, transfer or lease its properties and assets substantially as an entirety
to, any other entity or permit any other entity to consolidate, amalgamate,
merge with or into, or replace it, if, in the opinion of a nationally recognized
tax counsel experienced in such matters, such consolidation, amalgamation,
merger, replacement, conveyance, transfer or lease would cause the Trust or
Successor Entity to be classified as other than a grantor trust for United
States federal income tax purposes and each Holder of the Securities not to be
treated as owning an undivided interest in the Notes.
SECTION 3.16. PROPERTY TRUSTEE MAY FILE PROOFS OF CLAIM. In case of
the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other similar judicial
proceeding relative to the Trust or any other obligor upon the Securities or the
property of the Trust or of such other obligor or their creditors, the Property
Trustee (irrespective of whether any Distributions on the Securities shall then
be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Property Trustee shall have made any demand on the
Trust for the payment of any past due Distributions) shall be entitled and
empowered, to the fullest extent permitted by law, by intervention in such
proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any
Distributions owing and unpaid in respect of the Securities (or, if the
Securities are original issue discount Securities, such portion of the
Liquidation Amount as may be specified in the terms of such Securities)
and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Property Trustee (including
any claim for the reasonable compensation, expenses, disbursements and
advances of the Property Trustee, its agents and counsel) and of the
Holders allowed in such judicial proceeding; and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee any amount due it for the
26
reasonable compensation, expenses, disbursements and advances of the Property
Trustee, its agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement adjustment or compensation affecting the
Securities or the rights of any Holder thereof or to authorize the Property
Trustee to vote in respect of the claim of any Holder in any such proceeding.
ARTICLE 4
SPONSOR
SECTION 4.1. RESPONSIBILITIES OF THE SPONSOR. In connection with the
issue and sale of the Capital Securities (including, from time to time, Tranches
thereof), the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to execute and file with the Commission under the Securities Act
or the Exchange Act one or more registration statements on the applicable
forms, including any amendments thereto, pertaining to the Capital
Securities, the Guarantee and the Notes;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Capital 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;
(c) if deemed necessary by the underwriter of the Capital
Securities, to prepare for filing by the Trust an application to The New
York Stock Exchange, Inc. or any other national stock exchange or the
Nasdaq National Market for listing upon notice of issuance of any Capital
Securities, the Guarantee and the Notes; and
(d) to negotiate the terms of and to execute on behalf of the Trust
an underwriting agreement and other related agreements providing for each
sale of the Capital Securities.
SECTION 4.2. FEES AND EXPENSES OF THE TRUSTEES. The Sponsor, in its
capacity as Note Issuer, agrees
(a) to pay to the Property Trustee and the Delaware Trustee from
time to time such compensation as shall be agreed in writing with the
Sponsor for all services rendered by them hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust); and
(b) to reimburse the Property Trustee and the Delaware Trustee upon
request for all reasonable expenses, disbursements and advances incurred
or made by such Trustee in accordance with any provision of this Trust
Agreement (including the
27
reasonable compensation and the reasonable expenses and disbursements of
their duly authorized agents and counsel), except any such expense,
disbursement or advance as may be attributable to their gross negligence
or bad faith.
The provisions of this Section 4.2 shall survive the resignation or
removal of the Delaware Trustee or the Property Trustee or the termination of
this Trust Agreement.
ARTICLE 5
TRUST COMMON SECURITIES HOLDER
SECTION 5.1. NOTE ISSUER'S PURCHASE OF COMMON SECURITIES. In
accordance with Section 7.1(a), on each Closing Date, the Note Issuer will
purchase all of the Common Securities issued by the Trust on such Closing Date,
for an amount at least equal to 3% of the capital of the Trust at such time, at
the same time as Capital Securities issued on such Closing Date are sold.
The aggregate stated Liquidation Amount of Common Securities
outstanding at any time shall not be less than 3% of the capital of the Trust.
SECTION 5.2. COVENANTS OF THE COMMON SECURITIES HOLDER. For so long
as the Capital Securities remain outstanding, the Common Securities Holder will
covenant (i) to maintain, directly or indirectly, 100% ownership of the Common
Securities, (ii) to cause the Trust to remain a statutory business trust and not
to voluntarily dissolve, wind up, liquidate or be terminated, except as
permitted by this Trust Agreement, (iii) to use its commercially reasonable
efforts to ensure that the Trust will not be an investment company for purposes
of the Investment Company Act, and (iv) to take no action which would be
reasonably likely to cause the Trust to be classified as an association or a
publicly traded partnership taxable as a corporation for United States federal
income tax purposes.
ARTICLE 6
TRUSTEES
SECTION 6.1. NUMBER OF TRUSTEES. The number of Trustees initially
shall be four, and:
(a) at any time before the initial issuance of Securities, the
Sponsor may, by written instrument, increase or decrease the number of
Trustees; and
(b) after the initial issuance of 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 or by written consent in lieu of
such meeting; provided that the number of Trustees shall be at least
three; and provided further that (i) the Delaware 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 and otherwise meets
the requirements of applicable law; (ii) at least one Administrative
Trustee is an employee or officer of, or is affiliated with, the Sponsor;
and (iii) one Trustee shall be the Property Trustee for so long as this
Trust Agreement is
28
required to qualify as an indenture under the Trust Indenture Act, and
such Trustee may also serve as Delaware Trustee if it meets the applicable
requirements.
SECTION 6.2. DELAWARE TRUSTEE; ELIGIBILITY. If required by the
Business Trust Act, one Trustee (which may be the Property Trustee) (the
"Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law, provided that, if the Property Trustee has its
principal place of business in the State of Delaware and otherwise meets
the requirements of applicable law, then the Property Trustee shall also
be the Delaware Trustee and Section 3.11 shall have no application.
SECTION 6.3. PROPERTY TRUSTEE; ELIGIBILITY. (a) There shall at all
times be one Trustee (which may be the Delaware Trustee) which shall act as
Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or other Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust owners, 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 6.3(a)(ii), the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Property Trustee shall cease to be eligible
to so act under Section 6.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 6.6(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in Section 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act, subject to the penultimate paragraph thereof.
(d) The Guarantee shall be deemed to be specifically described in
this Trust Agreement for purposes of clause (i) of the first proviso contained
in Section 310(b) of the Trust Indenture Act.
SECTION 6.4. QUALIFICATIONS OF ADMINISTRATIVE TRUSTEES AND DELAWARE
TRUSTEE GENERALLY. Each Administrative Trustee and the Delaware Trustee (unless
the Property Trustee
29
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 6.5. INITIAL ADMINISTRATIVE TRUSTEES. The initial
Administrative Trustees shall be: _____________ and___________, the business
address of each of whom is c/o Energy East Corporation, P.O. Box 12904, Albany,
New York 12212-2904.
SECTION 6.6. APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES. (a)
Subject to Section 6.6(b), Trustees may be appointed or removed with or without
cause at any time:
(i) until the initial issuance of Securities, by written instrument
executed by the Sponsor;
(ii) after the initial issuance of Securities (but prior to the
occurrence of an Indenture Event of Default), 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 or by written consent
in lieu of such meeting; and
(iii) after the initial issuance of the Capital Securities and after
the occurrence and during the continuance of an Indenture Event of
Default, by vote of the Holders of a Majority in Liquidation Amount of the
Capital Securities, provided, that, this right does not extend to the
Administrative Trustees, who may be appointed or removed with or without
cause in such circumstances, by vote of the Holders of a Majority in
Liquidation Amount of the Common Securities; and
(b) The Trustee that acts as Property Trustee shall not be removed
in accordance with Section 6.6(a) until a successor Trustee possessing the
qualifications to act as Property Trustee under Section 6.3(a) (a "Successor
Property Trustee") has been appointed and has accepted such appointment by
written instrument executed by such Successor Property Trustee and delivered to
the Administrative Trustees and the Sponsor. The Trustee that acts as Delaware
Trustee shall not be removed in accordance with Section 6.6(a) until a successor
Trustee possessing the qualifications to act as Delaware Trustee under Sections
6.2 and 6.4 (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 Administrative Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his or its
successor shall have been appointed, until his death or its dissolution or until
his or its 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 Property
Trustee shall be effective:
(A) until a Successor Property Trustee has been appointed and
has accepted such appointment by instrument executed by such
Successor Property
30
Trustee and delivered to the Trust, the Sponsor and the resigning
Property Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor Property
Trustee, as the case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 6.6.
(e) If no Successor Property Trustee or Successor Delaware Trustee,
as the case may be, shall have been appointed and accepted appointment as
provided in this Section 6.6 within 30 days after delivery to the Sponsor and
the Trust of an instrument of resignation or removal, the resigning or removed
Property Trustee or Delaware Trustee, as applicable, may petition any court of
competent jurisdiction for appointment of a Successor Property Trustee or
Successor Delaware Trustee, as applicable. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a Successor
Property Trustee or Successor Delaware Trustee, as the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
SECTION 6.7. VACANCIES AMONG TRUSTEES. If a Trustee ceases to hold
office for any reason and the number of Trustees is not reduced pursuant to
Section 6.1, or if the number of Trustees is increased pursuant to Section 6.1,
a vacancy shall occur. A resolution certifying the existence of such vacancy by
the Administrative Trustees or, if there are more than two, a majority of the
Administrative Trustees shall be conclusive evidence of the existence of such
vacancy. The vacancy shall be filled with a Trustee appointed in accordance with
Section 6.6.
SECTION 6.8. 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,
dissolve or terminate the Trust. Whenever a vacancy in the number of
Administrative Trustees shall occur, until such vacancy is filled by the
appointment of an Administrative Trustee in accordance with Section 6.6, the
Administrative Trustees in office, regardless of their number, shall have all
the powers granted to the Administrative Trustees and shall discharge all the
duties imposed upon the Administrative Trustees by this Trust Agreement.
SECTION 6.9. MEETINGS. If there is more than one Administrative
Trustee, meetings of the Administrative Trustees shall be held from time to time
upon the call of any Administrative Trustee. Regular meetings of the
Administrative Trustees may be held at a time and place fixed by resolution of
the Administrative Trustees. Notice of any in-person meetings
31
of the Administrative 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
Administrative Trustees 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 an Administrative Trustee at a meeting shall
constitute a waiver of notice of such meeting except where an Administrative
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 Trust Agreement, any
action of the Administrative Trustees may be taken at a meeting by vote of a
majority of the Administrative 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
Administrative Trustees. In the event there is only one Administrative Trustee,
any and all action of such Administrative Trustee shall be evidenced by a
written consent of such Administrative Trustee.
SECTION 6.10. DELEGATION OF POWER. (a) Any Administrative Trustee
may, by power of attorney consistent with applicable law, delegate to any
natural person over the age of 21 his, her or its power for the purpose of
executing any documents contemplated in Section 3.6, including any registration
statement or amendment thereto filed with the Commission, or making any other
governmental filing.
(b) The Administrative 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 Administrative Trustees or otherwise as the
Administrative Trustees may deem expedient, to the extent such delegation is not
prohibited by applicable law or contrary to the provisions of the Trust, as set
forth herein.
SECTION 6.11. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS. Any corporation into which the Property Trustee, the Delaware Trustee
or any Administrative Trustee that is not a natural person may be merged or
converted or with such Trustee may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of such Trustee shall be the successor of such Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE 7
TERMS OF SECURITIES
SECTION 7.1. GENERAL PROVISIONS REGARDING SECURITIES. (a) The
Administrative Trustees shall on behalf of the Trust issue one class of capital
securities representing undivided beneficial ownership interests in the assets
of the Trust and one class of common securities representing undivided
beneficial ownership interests in the assets of the Trust.
32
(i) CAPITAL SECURITIES. On the initial Closing Date, an
Administrative Trustee, on behalf of the Trust, shall execute and deliver
to the underwriters named in the underwriting agreement relating to such
Capital Securities, a Capital Securities Certificate or Certificates,
registered in the name of the initial Depositary or its nominee, in an
initial aggregate amount of ______ Capital Securities against receipt of
the purchase price specified in the underwriting agreement. The Capital
Securities issued on the initial Closing Date shall have an aggregate
Liquidation Amount with respect to the assets of the Trust of _________
dollars ($_________). Pursuant to the procedures established in an
Officers' Certificate, the Trust may subsequently issue from time to time
Tranches of Capital Securities. The Capital Securities and any subsequent
Tranches thereof are hereby designated for identification purposes only as
"Energy East Capital Trust [ ] __% Capital Securities" (the "Capital
Securities"). The Capital Security Certificates evidencing the Capital
Securities shall be substantially in the form of Exhibit A to this Trust
Agreement, with such changes and additions thereto or deletions therefrom
as may be required by ordinary usage, custom or practice or to conform to
the rules of any stock exchange on which the Capital Securities are listed
or quoted.
(ii) COMMON SECURITIES. On the initial Closing Date, an
Administrative Trustee, on behalf of the Trust, shall execute and deliver
to the Sponsor Common Securities Certificates, registered in the name of
the Sponsor, in an initial aggregate amount of _____ Common Securities
against payment by the Sponsor of ________ dollars ($________). The Common
Securities issued on the initial Closing Date shall have an initial
aggregate Liquidation Amount with respect to the assets of the Trust of
___________ dollars ($_______). Pursuant to the procedures established in
an Officers' Certificate, the Trust may subsequently issue from time to
time Tranches of Common Securities. The Common Securities and any
subsequent Tranches thereof are hereby designated for identification
purposes only as "Energy East Capital Trust [ ] __% Common Securities"
(the "Common Securities" and, together with the Capital Securities, the
"Securities"). The Common Security Certificates evidencing the Common
Securities shall be substantially in the form of Exhibit B to this Trust
Agreement, with such changes and additions thereto or deletions therefrom
as may be required by ordinary usage, custom or practice.
(iii) On the initial Closing Date, an Administrative Trustee, on
behalf of the Trust, shall subscribe to and purchase from the Note Issuer
Notes, registered in the name of the Property Trustee, on behalf of the
Trust and the Holders and having an initial aggregate principal amount
equal to __________ dollars ($_________). To the extent subsequent
Tranches of Securities are issued, an Administrative Trustee, on behalf of
the Trust, shall subscribe to and purchase from the Note Issuer on
subsequent Closing Dates additional Notes, registered in the name of the
Property Trustee, on behalf of the Trust and the Holders having an
aggregate principal amount equal to the aggregate Liquidation Amount of
such Tranches of Securities.
(b) Payment of Distributions on, and payment of the Redemption Price
upon a redemption of, the Capital Securities and the Common Securities, as
applicable, shall be made Pro Rata based on the Liquidation Amount of such
Capital Securities and Common Securities; provided, however, that if on any date
on which amounts payable on distribution or redemption,
33
an Indenture Event of Default shall have occurred and be continuing, no payment
of any Distribution on, or Redemption Price of, any of the Common Securities,
and no other payment on account of the redemption, liquidation or other
acquisition of such Common Securities, shall be made unless payment in full in
cash of all accumulated and unpaid Distributions on all of the outstanding
Capital Securities for all Distribution periods terminating on or prior thereto,
or, in the case of amounts payable on redemption, the full amount of the
Redemption Price for all of the outstanding Capital Securities then called for
redemption, shall have been made or provided for, and all funds available to the
Property Trustee shall first be applied to the payment in full in cash of all
Distributions on, or the Redemption Price of, the Capital Securities then due
and payable. The Trust shall issue no securities or other interests in the
assets of the Trust other than the Capital Securities and the Common Securities.
(c) The Certificates shall be signed on behalf of the Trust by an
Administrative Trustee. Such signature shall be the manual or facsimile
signature of any present or any future Administrative Trustee. In case an
Administrative Trustee of the Trust who shall have signed any of the
Certificates shall cease to be such an Administrative 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 an Administrative Trustee; and any Certificate may be
signed on behalf of the Trust by any person who, at the actual date of execution
of such Certificate, shall be an Administrative Trustee of the Trust, although
at the date of the execution and delivery of the Trust Agreement such person was
not such an Administrative Trustee. Certificates shall be printed, lithographed
or engraved or may be produced in any other manner as is reasonably acceptable
to the Administrative Trustees, as evidenced by an Administrative Trustee's
execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Administrative Trustees may deem appropriate, or as may be required to comply
with any law or with any rule or regulation of any stock exchange on which
Securities may be listed, or to conform to usage.
A Certificate representing Capital Securities shall not be valid
until authenticated by the manual signature of an authorized officer of the
Property Trustee. Such signature shall be conclusive evidence that such
Certificate has been authenticated under this Trust Agreement.
The Capital Security Certificates shall be dated their date of
authentication.
Upon a written order of the Trust signed by one Administrative
Trustee, the Property Trustee shall (i) concurrently with the initial issuance
of the Securities, authenticate the Certificates representing Capital Securities
for original issue to be issued at that time and (ii) concurrently with each
periodic issuance of Tranches, evidence the current number of outstanding
Capital Securities by endorsing Schedule A to each Certificate therefor.
The Property Trustee may appoint an authenticating agent acceptable
to the Trust to authenticate Certificates. An authenticating agent may
authenticate Certificates whenever the Property Trustee may do so. Each
reference in this Trust Agreement to authentication by the Property Trustee
includes authentication by such agent. An authenticating agent has the same
rights as the Property Trustee to deal with the Sponsor or an Affiliate of the
Sponsor.
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(d) The consideration received by the Trust for each issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(e) Except to the extent set forth in Section 7.1(b), upon each
issuance of the Securities as provided in this Trust Agreement, the Securities
so issued shall be deemed to be validly issued, fully paid and non-assessable
undivided beneficial ownership interests in the assets of the Trust.
(f) Every Person, by virtue of having become a Holder or a Capital
Security Beneficial Owner in accordance with the terms of this Trust Agreement,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Trust Agreement and the terms of the Securities, the
Guarantee, the Indenture and the Notes.
(g) The holders of the Securities shall have no preemptive or
similar rights.
(h) To the extent the Trust issues additional Tranches, (A) the
Property Trustee shall (i) increase the number of Capital Securities evidenced
by each Certificate therefor by appropriate endorsement on Schedule A to each
such Certificate and (ii) instruct the Depositary to credit the account of the
purchaser of the Tranche of Capital Securities and (B) an Administrative Trustee
shall increase the number of Common Securities evidenced by each Certificate
therefor by appropriate endorsement on Schedule A to each such Certificate.
SECTION 7.2. DISTRIBUTIONS. (a) Holders of Securities shall be
entitled to receive cumulative cash Distributions at the rate per annum of __%
of the stated Liquidation Amount of $_____ per Security. The amount of
Distributions payable for any period shall be computed on the basis of a 360-day
year of twelve 30-day months. The amount of Distributions payable for any period
shorter than a full semi-annual distribution period shall be computed on the
basis of a 30-day month and for periods of less than a month, the actual number
of days elapsed per 30-day month. Subject to Section 7.1(b), Distributions shall
be made on the Capital Securities and the Common Securities on a Pro Rata basis.
Except in the event that the Sponsor exercises its right to extend the interest
payment period for the Notes pursuant to Section 2.10 of the Indenture (an
"Extension Period"), Distributions on the Securities shall, from the date of
original issue, accrue and be cumulative and shall be payable semi-annually, in
arrears, on the ___ day of each _____ and _____, commencing ________, when, as
and if available for payment, by the Property Trustee, except as otherwise
described below. Distributions are payable only to the extent that payments are
made in respect of the Notes held by the Property Trustee and to the extent that
the Trust has funds available for the payment of such Distributions in the
Property Account.
(b) "Distributions" shall mean ordinary cumulative distributions
together with any payment of Additional Tax Sums.
(c) If and to the extent that the Note Issuer makes a payment of
interest, premium and/or principal on the Notes held by the Property Trustee or
any payment of Additional Tax Sums (the amount of any such payments being a
"Payment Amount"), the Property Trustee shall and is directed, to the extent
funds are available for that purpose, to make a Pro Rata distribution of the
Payment Amount to Holders, subject to Section 7.1(b).
35
(d) Distributions on the Securities shall be payable to the Holders
thereof as they appear on the register of the Trust as of the close of business
on the relevant record dates. While the Capital Securities are represented by
one or more Global Securities, the relevant record dates shall be the close of
business on the Business Day next preceding such Distribution payment date,
unless a different regular record date is established or provided for the
corresponding interest payment date on the Notes. The relevant record dates for
the Common Securities shall be the same as for the Capital Securities. If the
Capital Securities shall not continue to remain represented by one or more
Global Securities, the relevant record dates for the Capital Securities shall
conform to the rules of any securities exchange on which the Capital Securities
are listed and, if none, shall be selected by the Administrative Trustees and
shall be more than 14 days but no less than 60 days prior to the relevant
payment dates. At all times, the Distribution payment dates shall correspond to
the interest payment dates on the Notes. Distributions payable on any Securities
that are not punctually paid on any Distribution payment date, as a result of
the Note Issuer having failed to make a payment under the Notes, shall 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 with respect to the related interest
payment date pursuant to the Indenture. If any date on which Distributions are
payable on the Securities is not a Business Day, then payment of the
Distribution payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other 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 day which
is a Business Day, in each case with the same force and effect as if made on
such payment date.
(e) In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata among the Holders of the Securities.
SECTION 7.3. REDEMPTION OF SECURITIES. (a) Upon the repayment or
redemption, in whole or in part, of the Notes held by the Trust, whether at the
stated maturity of the Notes or upon earlier redemption or acceleration as
provided in the Indenture, the proceeds from such repayment or redemption shall
be simultaneously applied Pro Rata (subject to Section 7.1(b)) to redeem
Securities having an aggregate Liquidation Amount equal to the aggregate
principal amount of the Notes so repaid or redeemed at the Redemption Price.
Holders shall be given not less than 20 nor more than 60 days notice of such
redemption in accordance with Section 7.4.
(b) On the date fixed for any distribution of Notes, upon
dissolution of the Trust, (i) the Securities will no longer be deemed to be
outstanding and (ii) certificates representing Securities will be deemed to
represent the Notes having an aggregate principal amount equal to the stated
Liquidation Amount of, and bearing accrued and unpaid interest equal to accrued
and unpaid distributions on, such Securities until such certificates are
presented to the Note Issuer or its agent for transfer or reissuance.
(c) Certificates called for redemption in whole must be surrendered
to the Paying Agent in order to receive payment of the Redemption Price.
36
SECTION 7.4. REDEMPTION PROCEDURES. (a) Notice of any redemption of,
or notice of distribution of Notes in exchange for, the Securities (a
"Redemption/Distribution Notice"), which notice shall be irrevocable, will be
given by the Trust by mail to each Holder of Securities to be redeemed or
exchanged not fewer than 20 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of a redemption, will be the
date fixed for redemption of or the date of final maturity of the Notes. For
purposes of the calculation of the date of redemption or exchange and the dates
on which notices are given pursuant to this Section 7.4(a), a
Redemption/Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, 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
register of the Trust. No defect in the Redemption/Distribution Notice or in the
mailing of either thereof with respect to any Holder shall affect the validity
of the redemption or exchange proceedings with respect to any other Holder.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Capital Securities will be redeemed Pro
Rata (subject to Section 7.1(b)) and the Capital Securities to be redeemed will
be redeemed as described in Section 7.4(c) below. The Trust may not redeem the
Securities in part unless all accumulated and unpaid Distributions to the date
of redemption have been paid in full on all Securities then outstanding. For all
purposes of this Trust Agreement, unless the context otherwise requires, all
provisions relating to the redemption of Capital Securities shall relate, in the
case of any Capital Security redeemed or to be redeemed only in part, to the
portion of the aggregate Liquidation Amount of Capital Securities which has been
or is to be redeemed.
(c) Subject to the Trust's fulfillment of the notice requirements
set forth in Section 7.4(a) above, if Securities are to be redeemed, then (i)
with respect to Capital Securities represented by one or more Global Securities,
by 2:00 p.m., New York City time, on the redemption date (provided that the Note
Issuer has paid the Property Trustee a sufficient amount of immediately
available funds in connection with the related redemption or maturity of the
Notes), the Property Trustee will deposit irrevocably with the Depositary or its
nominee (or successor Clearing Agency or its nominee) funds sufficient to pay
the applicable Redemption Price with respect to the Capital Securities and will
give the Depositary irrevocable instructions and authority to pay the Redemption
Price to the Holders of the Capital Securities and (ii) with respect to
Securities not represented by one or more Global Securities (provided that the
Note Issuer has paid the Property Trustee a sufficient amount of immediately
available funds in connection with the related redemption or maturity of the
Notes), the Paying Agent 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 register of the Trust on the redemption date. If any date fixed
for redemption of Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay) except that, if such Business Day 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 fixed
for redemption. If payment of the Redemption Price in respect of any Securities
is improperly withheld or refused and not paid either by the Property Trustee or
by the Sponsor as guarantor pursuant to the Guarantee, Distributions on such
Securities will continue to accrue at
37
the then applicable rate 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. For these
purposes, the applicable Redemption Price shall not include Distributions which
are being paid to Holders who were Holders on a relevant record date. If a
Redemption/Distribution Notice shall have been given and funds deposited or paid
as required, then immediately prior to the close of business on the date of such
deposit or payment, Distributions will cease to accrue on the Securities called
for redemption and all rights of Holders of such Securities so called for
redemption will cease, except the right of the Holders to receive the Redemption
Price, but without interest on such Redemption Price, and from and after the
date fixed for redemption, such Securities will cease to be outstanding.
Neither the Administrative Trustees nor the Trust shall be required
to register or cause to be registered the transfer of any Securities that have
been called for redemption, except in the case of any Securities being redeemed
in part, any portion thereof not to be redeemed.
(d) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Note Issuer or its
subsidiaries may at any time and from time to time purchase outstanding Capital
Securities by tender, in the open market or by private agreement.
SECTION 7.5. VOTING RIGHTS OF CAPITAL SECURITIES. (a) Except as
provided under Section 11.1 and this Article 7 and as otherwise required by the
Business Trust Act, the Trust Indenture Act and other applicable law, the
Holders of the Capital Securities shall have no voting rights.
(b) Subject to the requirement of the Property Trustee obtaining a
tax opinion in certain circumstances set forth in Section 7.5(d) below, the
Holders of a Majority in Liquidation Amount of the Capital Securities voting
separately as a class have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee, or
to direct the exercise of any trust or power conferred upon the Property Trustee
under the Trust Agreement, including the right to direct the Property Trustee,
as Holder of the Notes, to (i) exercise the remedies available to it under the
Indenture as a Holder of the Notes; (ii) consent to any amendment or
modification of the Indenture or the Notes where such consent shall be required
(iii) waive any past default and its consequences that is waivable under Section
6.6 of the Indenture or (iv) cancel an acceleration of the principal of the
Notes; provided, however, that if an Indenture Event of Default has occurred and
is continuing, then the Holders of 25% of the aggregate Liquidation Amount of
the Capital Securities may direct the Property Trustee to declare the principal
of and interest on the Notes due and payable; provided, further, that where a
consent or action under the Indenture would require the consent or act of the
Holders of more than a majority of the aggregate principal amount of Notes
affected thereby, only the Holders of the percentage of the aggregate stated
Liquidation Amount of the Capital Securities which is at least equal to the
percentage required under the Indenture may direct the Property Trustee to give
such consent to take such action provided, further, that (subject to the
provisions of Section 3.9) the Property Trustee shall have the right to decline
to follow any such direction if the Property Trustee shall determine that the
action so directed would be unjustly prejudicial to the Holders of Capital
Securities not taking part in such direction or if the Property Trustee, being
advised by counsel, determines that the action or proceeding so directed may not
38
lawfully be taken or if the Property Trustee, in good faith, by its board of
directors or trustees, executive committee, or a trust committee of directors or
trustees, and/or Responsible Officers, shall determine that the action or
proceeding so directed would involve the Property Trustee in personal liability.
(c) If the Property Trustee fails to enforce its rights under the
Notes after a Holder of Capital Securities has made a written request, such
Holder of Capital Securities may, to the extent permitted by applicable law,
institute a legal proceeding directly against the Note Issuer to enforce the
Property Trustee's rights under the Indenture without first instituting any
legal proceeding against the Property Trustee or any other Person. In addition,
if a Trust Enforcement Event has occurred and is continuing and such event is
attributable to the failure of the Note Issuer to make any interest, principal
or other required payments when due under the Indenture, then a Holder of
Capital Securities may directly institute a Direct Action against the Note
Issuer on or after the respective due date specified in the Notes.
(d) Subject to Section 2.7, the Property Trustee shall notify all
Holders of the Capital Securities of any notice of any Indenture Event of
Default received from the Note Issuer with respect to the Notes. Such notice
shall state that such Indenture Event of Default also constitutes a Trust
Enforcement Event. Except with respect to directing the time, method, and place
of conducting a proceeding for a remedy, the Property Trustee shall be under no
obligation to take any of the actions described in clauses 7.5(b)(i) and (ii)
above unless the Property Trustee has obtained an opinion of independent tax
counsel to the effect that the Trust will not fail to be classified as a grantor
trust for United States federal income tax purposes as a result of such action,
and each Holder will be treated as owning an undivided beneficial ownership
interest in the Notes.
(e) In the event the consent of the Property Trustee, as the Holder
of the Notes, is required under the Indenture with respect to any amendment or
modification of the Indenture, the Property Trustee shall request the direction
of the Holders of the Securities with respect to such amendment or modification
and shall vote with respect to such amendment or modification as directed by not
less than a Majority in Liquidation Amount of the Securities voting together as
a single class; provided, however, that where a consent under the Indenture
would require the consent of the Holders of more than a majority of the
aggregate principal amount of the Notes, the Property Trustee may only give such
consent at the direction of the Holders of at least the same proportion in
aggregate stated Liquidation Amount of the Securities. The Property Trustee
shall not take any such action in accordance with the directions of the Holders
of the Securities unless the Property Trustee has obtained an opinion of
independent tax counsel to the effect that the Trust will not be classified as
other than a grantor trust for United States federal income tax purposes as a
result of such action, and each Holder will be treated as owning an undivided
beneficial ownership interest in the Notes.
(f) A waiver of an Indenture Event of Default with respect to the
Notes will constitute a waiver of the corresponding Trust Enforcement Event.
(g) Any required approval or direction of Holders of Capital
Securities may be given at a separate meeting of Holders of Capital Securities
convened for such purpose, at a meeting of all of the Holders of Securities or
pursuant to written consent. The Administrative
39
Trustees will cause a notice of any meeting at which Holders of Capital
Securities are entitled to vote to be mailed to each Holder of record of Capital
Securities. Each such notice will include a statement setting forth (i) the date
of such meeting, (ii) a description of any resolution proposed for adoption at
such meeting on which such Holders are entitled to vote and (iii) instructions
for the delivery of proxies.
(h) No vote or consent of the Holders of Capital Securities shall be
required for the Trust to redeem and cancel Capital Securities or distribute
Notes in accordance with this Trust Agreement and the terms of the Securities.
(i) Notwithstanding that Holders of Capital Securities are entitled
to vote or consent under any of the circumstances described above, any of the
Securities that are owned at such time by the Note Issuer, any Administrative
Trustee or any entity directly or indirectly controlled by, or under direct or
indirect common control with, the Note Issuer or any Administrative Trustee,
shall not be entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if such Securities were not outstanding; provided,
however, that persons otherwise eligible to vote to whom the Note Issuer or any
of its subsidiaries have pledged Capital Securities may vote or consent with
respect to such pledged Capital Securities under any of the circumstances
described herein.
(j) Subject to Sections 6.6(a) and 7.5(k), Holders of the Capital
Securities shall have no rights to appoint or remove the Trustees, who may be
appointed, removed or replaced solely by the Common Securities Holder.
(k) Subject to the rights of the Holders of a Majority in
Liquidation Amount of the Common Securities to appoint or remove Administrative
Trustees as provided in Section 6.6(a)(iii), if an Indenture Event of Default
has occurred and is continuing, the Trustees may be removed at such time only by
a Majority in Liquidation Amount of the Capital Securities.
SECTION 7.6. VOTING RIGHTS OF COMMON SECURITIES. (a) Except as
provided under Section 6.1(b), this Section 7.6 or Section 11.1 or as otherwise
required by the Business Trust Act, the Trust Indenture Act or other applicable
law or provided by the Trust Agreement, the Holders of the Common Securities
will have no voting rights.
(b) Subject to Sections 6.6(a) and 7.5(k), the Holders of the Common
Securities shall be entitled, in accordance with Article 6 of this Trust
Agreement, to vote to appoint, remove or replace any Trustee or to increase or
decrease the number of Trustees.
(c) Subject to Section 2.6 and only after all Trust Enforcement
Events with respect to the Capital Securities have been cured, waived, or
otherwise eliminated and subject to the requirement of the Property Trustee
obtaining a tax opinion in certain circumstances set forth in this paragraph
(c), the Holders of a Majority in Liquidation Amount of the Common Securities
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Property Trustee, or direct the exercise of any
trust or power conferred upon the Property Trustee under this Trust Agreement,
including the right to direct the Property Trustee, as Holder of the Notes, to
(i) exercise the remedies available to it under the Indenture as a Holder
40
of the Notes, (ii) consent to any amendment or modification of the Indenture or
the Notes where such consent shall be required or (iii) waive any past default
and its consequences that is waivable under Section 6.6 of the Indenture;
provided, however, that where a consent or action under the Indenture would
require the consent or act of the Holders of more than a majority of the
aggregate principal amount of Notes affected thereby, only the Holders of the
percentage of the aggregate stated Liquidation Amount of the Common Securities
which is at least equal to the percentage required under the Indenture may
direct the Property Trustee to have such consent or take such action, provided,
further, that (subject to the provisions of Section 3.9) the Property Trustee
shall have the right to decline to follow any such direction if the Property
Trustee shall determine that the action so directed would be unjustly
prejudicial to the Holders of Common Securities not taking part in such
direction or if the Property Trustee, being advised by counsel, determines that
the action or proceeding so directed may not lawfully be taken or if the
Property Trustee, in good faith, by its board of directors or trustees,
executive committee, or a trust committee of directors or trustees, and/or
Responsible Officers, shall determine that the action or proceeding so directed
would involve the Property Trustee in personal liability. Except with respect to
directing the time, method, and place of conducting a proceeding for a remedy,
the Property Trustee shall be under no obligation to take any of the actions
described in clauses 7.6(c)(i) and (ii) above unless the Property Trustee has
obtained an opinion of independent tax counsel to the effect that, as a result
of such action, for United States federal income tax purposes the Trust will not
fail to be classified as a grantor trust and each Holder will be treated as
owning an undivided beneficial ownership interest in the Notes.
(d) If the Property Trustee fails to enforce its rights under the
Notes after a Holder of Common Securities has made a written request, such
Holder of Common Securities may, to the extent permitted by applicable law,
directly institute a legal proceeding directly against the Note Issuer to
enforce the Property Trustee's rights under the Notes without first instituting
any legal proceeding against the Property Trustee or any other Person.
(e) A waiver of an Indenture Event of Default with respect to the
Notes will constitute a waiver of the corresponding Trust Enforcement Event.
(f) Any required 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 or
pursuant to written consent. The Administrative Trustees will cause a notice of
any meeting at which Holders of Common Securities are entitled to vote to be
mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting, (ii) a
description of any resolution proposed for adoption at such meeting on which
such Holders are entitled to vote and (iii) instructions for the delivery of
proxies.
(g) 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 Notes in accordance with the Trust Agreement and the terms of the
Securities.
SECTION 7.7. PAYING AGENT. The Trust shall maintain in the Borough
of Manhattan, City of New York, State of New York, an office or agency where the
Capital Securities may be presented for payment ("Paying Agent"). The Trust may
appoint the Paying
41
Agent and may appoint one or more additional Paying Agents in such other
locations as it shall determine. The term "Paying Agent" includes any additional
Paying Agent. The Trust may change any Paying Agent without prior notice to the
Holders. The Trust shall notify the Property Trustee of the name and address of
any Paying Agent not a party to this Trust Agreement. If the Trust fails to
appoint or maintain another entity as Paying Agent, the Property Trustee shall
act as such. The Trust or any of its Affiliates may act as Paying Agent. The
Property Trustee shall initially act as Paying Agent for the Securities. In the
event the Property Trustee shall no longer be the Paying Agent, the
Administrative Trustees shall appoint a successor (which shall be a bank or
trust company acceptable to the Note Issuer) to act as Paying Agent. The Paying
Agent shall be permitted to resign as Paying Agent upon 30 days' written notice
to the Property Trustee and the Note Issuer.
SECTION 7.8. 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 Trust Agreement and in the terms of the Securities. To the
fullest extent permitted by law, any transfer or purported transfer of any
Security not made in accordance with this Trust Agreement shall be null and
void.
(b) (i) Subject to this Article 7, Capital Securities shall be
freely transferable.
(ii) The Holder of the Common Securities may not transfer the Common
Securities except (A) in compliance with a consolidation, merger, sale,
conveyance or lease of the Note Issuer in compliance with Article XI of the
Indenture or (B) to the Sponsor or an Affiliate thereof in compliance with
applicable law, including the Securities Act and applicable state securities and
blue sky laws. To the fullest extent permitted by law, any attempted transfer of
the Common Securities other than as set forth in the immediately preceding
sentence shall be null and void.
(c) The Trust shall cause to be kept at the Corporate Trust Office
of the Property Trustee a register (the register maintained in such office being
herein sometimes referred to as the "Security Register") in which, subject to
such reasonable regulations as it may prescribe, the Trust shall provide for the
registration of Capital Securities and of transfers of Capital Securities. The
Property Trustee is hereby appointed "Security Registrar" for the purpose of
registering Capital Securities and transfers of Capital Securities as herein
provided.
(d) Upon surrender for registration of transfer of any Security at
an office or agency of the Trust designated for such purpose, the Trust shall
execute, and in the case of Capital Securities the Property Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of any authorized denominations and of a
like aggregate principal amount.
(e) At the option of the Holder, Securities may be exchanged for
other Securities of any authorized denominations and of a like aggregate
principal amount, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Trust shall execute, and in the case of Capital Securities the Property Trustee
shall authenticate and deliver, the Securities which the Holder making the
exchange is entitled to receive.
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(f) Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Trust or the Property
Trustee) be duly endorsed, or be accompanied by a written instrument of transfer
in form satisfactory to the Trust and the Security Registrar duly executed, by
the Holder thereof or his attorney duly authorized in writing.
(g) No service charge shall be made for any registration of transfer
or exchange of Securities, but the Trust may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities.
(h) If the Securities are to be redeemed in part, the Trust shall
not be required (A) to issue, register the transfer of or exchange any
Securities during a period beginning at the opening of business 15 days before
the day of the mailing of a notice of redemption of any such Securities selected
for redemption under Section 7.4 and ending at the close of business on the day
of such mailing, or (B) to register the transfer or exchange of any Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Security being redeemed in part.
SECTION 7.9. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If:
(a) any mutilated Certificates should be surrendered to the
Administrative Trustees or the Property Trustee, or if the Administrative
Trustees and the Property Trustee shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Administrative Trustees and the
Property Trustee such security or indemnity as may be required by them to
keep each of the Trustees, the Sponsor and the Trust harmless, then, in
the absence of notice that such Certificate shall have been acquired by a
bona fide purchaser, any Administrative Trustee on behalf of the Trust
shall execute and deliver and, with respect to Capital Securities
Certificates, the Property Trustee shall authenticate, 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 7.9, the Administrative 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. The provisions of this Section
are exclusive and shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement of mutilated, destroyed, lost or stolen
Certificates.
SECTION 7.10. DEEMED SECURITY HOLDERS. The Trustees may treat the
Person in whose name any Certificate shall be registered on the register of the
Trust as the sole holder of such Certificate and of the Securities represented
by such Certificate for purposes of receiving Distributions (subject to Section
7.2(d)) 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
43
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 7.11. GLOBAL SECURITIES. The Capital Securities may be
issued in the form of one or more Global Securities. If the Capital Securities
are to be issued in the form of one or more Global Securities, then an
Administrative Trustee on behalf of the Trust shall execute and the Property
Trustee shall authenticate and deliver one or more Global Securities that
(i) shall represent and shall be denominated in an amount equal to the
aggregate Liquidation Amount of all of the Capital Securities to be issued in
the form of Global Securities and not yet cancelled, (ii) shall be registered
in the name of the Depositary for such Global Security or the nominee of such
Depositary, and (iii) shall be delivered by the Property Trustee to such
Depositary or pursuant to such Depositary's instructions. Global Securities
shall bear a legend substantially to the following effect:
"This Capital Security is a Global Security within the meaning of
the Trust Agreement hereinafter referred to and is registered in the name
of The Depository Trust Company, a New York corporation (the
"Depositary"), or a nominee of the Depositary. This Capital Security is
exchangeable for Capital Securities registered in the name of a person
other than the Depositary or its nominee only in the limited circumstances
described in the Trust Agreement and no transfer of this Capital Security
(other than a transfer of this Capital Security as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary) may be
registered except in limited circumstances. Unless this Capital Security
Certificate is presented by an authorized representative of the Depositary
to Energy East Capital Trust [ ] or its agent for registration of
transfer, exchange or payment, and any Capital Security Certificate issued
is registered in the name of Cede & Co. or such other name as requested by
an authorized representative of the Depositary (and any payment hereon is
made to Cede & Co. or to such other entity as is requested by an
authorized representative of the Depositary), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co., has an interest
herein."
Capital Securities not represented by a Global Security issued in
exchange for all or a part of a Global Security pursuant to this Section 7.11
shall be registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Property Trustee. Upon execution and
authentication, the Property Trustee shall deliver such Capital Securities not
represented by a Global Security to the Persons in whose names such definitive
Capital Securities are so registered.
At such time as all interests in Global Securities have been
redeemed, repurchased or cancelled, such Global Securities shall be, upon
receipt thereof, cancelled by the Property Trustee in accordance with standing
procedures of the Depositary. At any time prior to such cancellation, if any
interest in Global Securities is exchanged for Capital Securities not
represented by a Global Security, redeemed, cancelled or transferred to a
transferee who receives Capital Securities not represented by a Global Security
therefor or any Capital Security not
44
represented by a Global Security is exchanged or transferred for part of Global
Securities, the principal amount of such Global Securities shall, in accordance
with the standing procedures of the Depositary, be reduced or increased, as the
case may be, and an endorsement shall be made on such Global Securities by the
Property Trustee to reflect such reduction or increase.
The Trust and the Property Trustee may for all purposes, including
the making of payments due on the Capital Securities, deal with the Depositary
as the authorized representative of the Holders for the purposes of exercising
the rights of Holders hereunder. The rights of the owner of any beneficial
interest in a Global Security shall be limited to those established by law and
agreements between such owners and depository participants, provided that no
such agreement shall give any rights to any Person against the Trust or the
Property Trustee without the written consent of the parties so affected.
Multiple requests and directions from and votes of the Depositary as Holder of
Capital Securities in global form with respect to any particular matter shall
not be deemed inconsistent to the extent they do not represent an amount of
Capital Securities in excess of those held in the name of the Depositary or its
nominee.
If at any time the Depositary for any Capital Securities represented
by one or more Global Securities notifies the Trust that it is unwilling or
unable to continue as Depositary for such Capital Securities or if at any time
the Depositary for such Capital Securities shall no longer be eligible to act as
such under the Exchange Act, the Trust shall appoint a successor Depositary with
respect to such Capital Securities. If a successor Depositary for such Capital
Securities is not appointed by the Trust within 90 days after the Trust receives
such notice or becomes aware of such ineligibility, the Trust's election that
such Capital Securities be represented by one or more Global Securities shall no
longer be effective and the Trust shall execute, and the Property Trustee will
authenticate and deliver, Capital Securities in definitive registered form, in
any authorized denominations, in an aggregate Liquidation Amount equal to the
principal amount of the Global Security representing such Capital Securities in
exchange for such Global Security.
The Trust may at any time and in its sole discretion determine that
the Capital Securities issued in the form of one or more Global Securities shall
no longer be represented by a Global Security. In such event the Trust shall
execute, and the Property Trustee, shall authenticate and deliver, Capital
Securities in definitive registered form, in any authorized denominations, in an
aggregate Liquidation Amount equal to the principal amount of the Global
Security representing such Capital Securities, in exchange for such Global
Security.
Notwithstanding any other provisions of this Trust Agreement (other
than the provisions set forth in Section 7.8), Global Securities may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.
Subject to the third preceding paragraph, interests of beneficial
owners in a Global Security may be transferred or exchanged for Capital
Securities not represented by a Global Security and Capital Securities not
represented by a Global Security may be transferred or exchanged for Global
Securities in accordance with rules of the Depositary and the provisions of
Section 7.8.
45
SECTION 7.12. CANCELLATION. All Certificates surrendered for
payment, redemption, registration of transfer or exchange shall, if surrendered
to any Person other than the Property Trustee, be delivered to the Property
Trustee and shall be promptly cancelled by it. No Certificates shall be executed
or authenticated in lieu of or in exchange for any Certificates cancelled as
provided in this Section, except as permitted by this Trust Agreement. All
cancelled Certificates held by the Property Trustee shall be disposed of by it
in accordance with its customary procedures.
ARTICLE 8
DISSOLUTION AND TERMINATION OF TRUST
SECTION 8.1. DISSOLUTION AND TERMINATION OF TRUST. (a) The Trust
shall dissolve upon the earliest of:
(i) a Bankruptcy Event of the Holder of the Common Securities or the
Sponsor;
(ii) the filing of a certificate of dissolution or its equivalent
with respect to the Sponsor; after obtaining the consent of the Holders of
at least a Majority in Liquidation Amount of the Securities to dissolve
the Trust; or the revocation of the Sponsor's charter and the expiration
of 90 days after the date of revocation without a reinstatement thereof;
(iii) the entry of a decree of judicial dissolution of the Sponsor
or the Trust;
(iv) the time when all of the Securities shall have been called for
redemption and the amounts then due shall have been paid to the Holders in
accordance with the terms of the Securities;
(v) at the Sponsor's election by notice and direction to the
Property Trustee to distribute the Notes to the Holders of the Securities
in exchange for all of the Securities; provided that the Sponsor will be
required to obtain an opinion of an independent tax counsel that the
distribution of the Notes would not result in the recognition of gain or
loss for United States federal income tax purposes by the Holders of the
Capital Securities; or
(vi) the time when all of the Administrative Trustees and the
Sponsor shall have consented to dissolution of the Trust provided such
action is taken before the issuance of any Securities.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a) and upon completion of the winding up and
liquidation of the Trust, the Trustees shall terminate the Trust by filing a
certificate of cancellation with the Secretary of State of the State of
Delaware.
(c) The provisions of Section 4.2 and Article 9 shall survive the
termination of the Trust.
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SECTION 8.2. LIQUIDATION DISTRIBUTION UPON DISSOLUTION OF THE TRUST.
(a) In the event of any voluntary or involuntary liquidation, dissolution, or
winding-up 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 the Trust's liabilities to creditors, if any, distributions in cash or other
immediately available funds in an amount equal to the aggregate of the stated
Liquidation Amount of $_____ per Security plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless, in connection with such Liquidation, the Notes shall be
distributed on a Pro Rata basis to the Holders of the Securities in exchange for
such Securities.
(b) 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. The
Holders of the Common Securities will be entitled to receive distributions upon
any such Liquidation Pro Rata with the Holders of the Capital Securities except
that if an Indenture Event of Default has occurred and is continuing, the
Capital Securities shall have a preference over the Common Securities with
regard to such distributions.
ARTICLE 9
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, DELAWARE
TRUSTEES OR OTHERS
SECTION 9.1. LIABILITY. (a) Except as expressly set forth in this
Trust Agreement, the Guarantee and the terms of the Securities, the Sponsor:
(i) shall not be 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; and
(ii) shall not be required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust or otherwise.
(b) Pursuant to Section 3803(a) of the Business Trust Act, the
Holder of the Common 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; provided,
however, the Holders of the Common Securities shall be liable for all of the
debts and obligations of the Trust (other than with respect to the Securities)
to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of the Capital 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 9.2. 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
47
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 Trust Agreement 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, if selected by such Indemnified
Person, been selected by such Indemnified Person with reasonable care 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 9.3. 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 Trust Agreement shall not be liable to the
Trust or to another Covered Person for its good faith reliance on the provisions
of this Trust Agreement. The provisions of this Trust Agreement, to the extent
that they restrict the duties and liabilities of an Indemnified Person otherwise
existing at law or in equity (other than the duties imposed on the Property
Trustee under the Trust Indenture Act), are agreed by the parties hereto to
replace such other duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Person and any Indemnified Person; or
(ii) whenever this Trust Agreement 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 Trust Agreement 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 Trust Agreement an Indemnified Person is
permitted or required to make a decision:
48
(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 Trust Agreement
or by applicable law.
SECTION 9.4. INDEMNIFICATION. (a) (i) The Note Issuer shall
indemnify, to the full extent permitted by law, any Note Issuer 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 Note Issuer
Indemnified Person against expenses (including attorney 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 Note Issuer Indemnified Person did not act in good faith
and in a manner which he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or proceeding,
had reasonable cause to believe that his conduct was unlawful.
(ii) The Note Issuer shall indemnify, to the full extent permitted
by law, any Note Issuer Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Note Issuer 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 Note Issuer
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) Any indemnification under paragraphs (i) and (ii) of this
Section 9.4(a) (unless ordered by a court) shall be made by the Note Issuer only
as authorized in the specific case upon a determination that indemnification of
the Note Issuer Indemnified Person is proper in the circumstances because he has
met the applicable standard of conduct set forth in paragraphs (i) and (ii).
Such determination shall be made (1) by the Administrative Trustees by a
majority vote of a quorum consisting of such Administrative 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
49
quorum of disinterested Administrative Trustees so directs, by independent legal
counsel in a written opinion, or (3) by the Holders of the Common Securities of
the Trust.
(iv) Expenses (including attorneys' fees) incurred by a Note Issuer
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 9.4(a) shall be paid by the Note Issuer in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of such Note Issuer Indemnified Person to repay such amount if it
shall ultimately be determined that he is not entitled to be indemnified by the
Note Issuer as authorized in this Section 9.4(a). Notwithstanding the foregoing,
no advance shall be made by the Note Issuer if a determination is reasonably and
promptly made (i) by the Administrative Trustees by a majority vote of a quorum
of disinterested Administrative Trustees, (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested Administrative
Trustees so directs, by independent legal counsel in a written opinion or (iii)
the Common Security Holder of the Trust, that, based upon the facts known to the
Administrative Trustees, counsel or the Common Security Holder at the time such
determination is made, such Note Issuer 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
Note Issuer 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 Administrative Trustees, independent legal counsel or Common Security Holder
reasonably determine that such person deliberately breached his duty to the
Trust or its Common or Capital Security Holders.
(v) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 9.4(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 Note Issuer or Capital 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 9.4(a) shall be deemed to be provided by a
contract between the Note Issuer and each Note Issuer Indemnified Person who
serves in such capacity at any time while this Section 9.4(a) is in effect. Any
repeal or modification of this Section 9.4(a) shall not affect any rights or
obligations then existing.
(vi) The Note Issuer or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Note Issuer 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 Note Issuer
would have the power to indemnify him against such liability under the
provisions of this Section 9.4(a).
(vii) For purposes of this Section 9.4(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
9.4(a) with respect to the resulting
50
or surviving entity as he would have with respect to such constituent entity if
its separate existence had continued.
(viii) The indemnification and advancement of expenses provided by,
or granted pursuant to, this Section 9.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a Note
Issuer Indemnified Person and shall inure to the benefit of the heirs, executors
and administrators of such a person. The obligation to indemnify as set forth in
this Section 9.4(a) shall survive the resignation or removal of the Delaware
Trustee or the Property Trustee or the termination of this Trust Agreement.
(b) The Note Issuer agrees to indemnify the (i) Property Trustee,
(ii) the Delaware Trustee, (iii) any Affiliate of the Property Trustee or the
Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Property Trustee or the Delaware Trustee (each of the Persons in (i) through
(iv) being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any loss, liability or
expense incurred without gross negligence or willful misconduct on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against or investigating
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder. The obligation to indemnify as set forth in this
Section 9.4(b) shall survive the resignation and removal of the Delaware Trustee
or the Property Trustee and the dissolution of the Trust and the termination of
this Trust Agreement. In addition, the Note Issuer has agreed in the Indenture
to pay the fees and expenses of the Delaware Trustee and the Property Trustee.
SECTION 9.5. OUTSIDE BUSINESSES. Subject to the provisions of
Section 6.3, any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee may engage in or possess an interest in other business ventures
of any nature or description, independently or with others, similar or
dissimilar to the activities of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Trust Agreement in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the activities of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee or the Property Trustee shall be obligated to present any particular
investment or other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the Trust, and any
Covered Person, the Sponsor, the Delaware Trustee and the Property Trustee shall
have the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the Property Trustee
may engage or be interested in any financial or other transaction with the
Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee
or agent for, or act on any committee or body of holders of, securities or other
obligations of the Sponsor or its Affiliates.
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ARTICLE 10
ACCOUNTING
SECTION 10.1. FISCAL YEAR. The fiscal year ("Fiscal Year") of the
Trust shall be the calendar year, or such other year as is required by the Code.
SECTION 10.2. CERTAIN ACCOUNTING MATTERS. (a) At all times during
the existence of the Trust, the Administrative Trustees shall keep, or cause to
be kept, full books of account, records and supporting documents, which shall
reflect in reasonable detail, each transaction of the Trust. The books of
account shall be maintained on the accrual method of accounting, in accordance
with generally accepted accounting principles, consistently applied. The Trust
shall use the accrual method of accounting for United States federal income tax
purposes. The books of account and the records of the Trust shall be examined by
and reported upon as of the end of each Fiscal Year of the Trust by a firm of
independent certified public accountants selected by the Administrative
Trustees.
(b) The Administrative Trustees shall cause to be prepared and
delivered to each of the Holders of Securities, within 90 days after the end of
each Fiscal Year of the Trust, annual financial statements of the Trust,
including a balance sheet of the Trust as of the end of such Fiscal Year, and
the related statements of income or loss.
(c) The Administrative Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, an 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 Administrative Trustees shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
(d) The Administrative Trustees shall cause to be duly prepared and
filed with the appropriate taxing authority, an annual United States federal
income tax return, on a Form 1041 or such other form required by United States
federal income tax law, and any other annual income tax returns required to be
filed by the Administrative Trustees on behalf of the Trust with any state or
local taxing authority.
SECTION 10.3. 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 Notes held by the Property Trustee
shall be made directly to the Property Account and no other funds of the Trust
shall be deposited in the Property Account. The sole signatories for such
accounts shall be designated by the Administrative Trustees; provided, however,
that the Property Trustee shall designate the signatories for the Property
Account.
SECTION 10.4. WITHHOLDING. The Trust and the Administrative 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
52
the extent of, and in fulfilling, its withholding obligations. The
Administrative Trustees shall file required forms with applicable jurisdictions
and, unless an exemption from withholding is properly established by a Holder,
shall remit amounts withheld with respect to the Holder to applicable
jurisdictions. To the extent that the Trust is required to withhold and pay over
any amounts to any authority with respect to distributions or allocations to any
Holder, the amount withheld shall be deemed to be a distribution in the amount
of the withholding to the Holder. In the event of any claimed over withholding,
Holders shall be limited to an action against the applicable jurisdiction. If
the amount required to be withheld was not withheld from actual Distributions
made, the Trust may reduce subsequent Distributions by the amount of such
withholding.
ARTICLE 11
AMENDMENTS AND MEETINGS
SECTION 11.1. AMENDMENTS. (a) Except as otherwise provided in this
Trust Agreement or by any applicable terms of the Securities, this Trust
Agreement may only be amended by a written instrument approved and executed by
the Note Issuer and the Sponsor and (i) the Administrative Trustees (or, if
there are more than two Administrative Trustees, a majority of the
Administrative Trustees), (ii) the Property Trustee; and (iii) the Delaware
Trustee if the amendment affects the rights, powers, duties, obligations or
immunities of the Delaware Trustee.
(b) No amendment shall be made, and any such purported amendment
shall be void and ineffective:
(i) unless, the Property 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 Trust Agreement (including the terms of the
Securities) and that all conditions precedent to the execution and
delivery of such amendment have been satisfied; 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 Trust Agreement (including the terms of the
Securities) and that all conditions precedent to the execution and
delivery of such amendment have been satisfied; and
(ii) to the extent the result of such amendment would be to:
(A) cause the Trust to be classified other than as a grantor
trust for United States federal income tax purposes;
(B) reduce or otherwise adversely affect the powers of the
Property Trustee in contravention of the Trust Indenture Act; or
53
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act.
(c) If the Trust has issued any Securities that remain outstanding:
(i) any amendment that would (a) change the amount or timing of any
distribution of the Securities or otherwise adversely affect the amount of
any distribution required to be made in respect of the Securities as of a
specified date or (b) restrict the right of a Holder of Securities to
institute suit for the enforcement of any such payment on or after such
date, will entitle the Holders of such Securities, voting together as a
single class, to vote on such amendment or proposal and such amendment or
proposal shall not be effective except with the approval of each of the
Holders of the Securities affected thereby; and
(ii) any amendment that would (a) adversely affect the powers,
preferences or rights of the Securities, whether by way of amendment to
this Trust Agreement or otherwise or (b) result in the dissolution,
winding-up or termination of the Trust other than pursuant to the terms of
this Trust Agreement, will entitle the holders of the Capital Securities
voting together as a single class 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 the Capital Securities
affected thereby; provided that, if any amendment or proposal referred to
in clause (a) above would adversely affect only the Capital Securities or
the Common Securities, then only the affected class will be entitled to
vote on such amendment or proposal and such amendment or proposal.
(d) This Section 11.1 shall not be amended without the consent of
all of the Holders of the Securities.
(e) Article 4 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
6 to increase or decrease the number of, and appoint and remove Trustees shall
not be amended without the consent of the Holders of a Majority in Liquidation
Amount of the Common Securities.
(g) Notwithstanding Section 11.1(c), this Trust Agreement may be
amended without the consent of the Holders of the Securities, if such amendment
does not adversely affect in any material respect the rights of the holders of
the Securities, to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Trust Agreement
that may be defective or inconsistent with any other provision of this
Trust Agreement or to make any other provisions with respect to matters or
questions arising under this Trust Agreement that shall not be
inconsistent with the other provisions of this Trust Agreement;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
54
(iv) to conform to any change in Rule 3a-5 of the Investment Company
Act or written change in interpretation or application of Rule 3a-5 of the
Investment Company Act by any legislative body, court, government agency
or regulatory authority; or
(v) to modify, eliminate and add to any provision of this Trust
Agreement to ensure that the Trust will be classified as a grantor trust
for United States federal income tax purposes 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.
(h) Neither the Property Trustee nor the Delaware Trustee shall be
required to sign any amendment that affects its rights, duties, obligations or
immunities under this Trust Agreement or otherwise.
SECTION 11.2. 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 Administrative 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 Trust Agreement,
the terms of the Securities or the rules of any stock exchange on which the
Capital Securities are listed or admitted for trading. The Administrative
Trustees shall call a meeting of the Holders of such class if directed to do so
by the Holders of at least 10% in Liquidation Amount of such class of
Securities. Such direction shall be given by delivering to the Administrative
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 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 seven 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
Trust Agreement or the rules of any stock exchange on which the Capital
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 and without prior notice 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 Administrative Trustees may specify
that any written ballot submitted to the Security Holders for the
55
purpose of taking any action without a meeting shall be returned to the
Trust within the time specified by the Administrative 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 such proxy. 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 Administrative Trustees or by such other Person that the
Administrative Trustees may designate; and
(iv) unless the Business Trust Act, this Trust Agreement, the terms
of the Securities, the Trust Indenture Act or the listing rules of any
stock exchange on which the Capital Securities are then listed for
trading, otherwise provides, the Administrative 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 12
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE
SECTION 12.1. REPRESENTATIONS AND WARRANTIES OF THE PROPERTY
TRUSTEE. The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Trust Agreement,
and each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) the Property Trustee is a banking corporation, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation or organization, with trust power and authority to execute
and deliver, and to carry out and perform its obligations under the terms
of, this Trust Agreement;
(b) the Property Trustee satisfies the requirements set forth in
Section 6.3(a);
(c) the execution, delivery and performance by the Property Trustee
of this Trust Agreement has been duly authorized by all necessary
corporate action on the part of the Property Trustee. This Trust Agreement
has been duly executed and delivered by the
56
Property Trustee, and it constitutes a legal, valid and binding obligation
of the Property Trustee, enforceable against it in accordance with its
terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency and other similar laws affecting creditors' rights generally
and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(d) the execution, delivery and performance of this Trust Agreement
by the Property Trustee does not conflict with or constitute a breach of
the articles of association or incorporation, as the case may be, or the
by-laws (or other similar organizational documents) of the Property
Trustee; and
(e) no consent, approval or authorization of, or registration with
or notice to, any State (which term, in the case of the initial Property
Trustee, shall mean the State of New York) or federal banking authority
having jurisdiction over the trust powers of the Property Trustee is
required for the execution, delivery or performance by the Property
Trustee of this Trust Agreement.
SECTION 12.2. REPRESENTATIONS AND WARRANTIES OF THE 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 Trust Agreement,
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 satisfies the requirements set forth in
Section 6.2, satisfies Trust Section 3807 of the Business Trust Act and
has the power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Trust Agreement and, if
it is not a natural person, is duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization;
(b) the Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and this Trust Agreement. This
Trust Agreement 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); and
(c) no consent, approval or authorization of, or registration with
or notice to, any federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee of this Trust Agreement.
57
ARTICLE 13
MISCELLANEOUS
SECTION 13.1. NOTICES. All notices provided for in this Trust
Agreement shall be in writing, duly signed by the party giving such notice, and
shall be delivered, telecopied or mailed by registered or certified mail, as
follows:
(a) if given to the Trust, in care of the Administrative Trustees at
the Trust's mailing address set forth below (or such other address as the
Trust may give notice of to the Property Trustee, the Delaware Trustee and
the Holders of the Securities):
c/o Energy East Corporation
P.O. Box 12904
Albany, New York 12212-2904
Attention: Treasurer
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as the Delaware Trustee may give notice
of to the Administrative Trustees, the Property Trustee and the Holders of
the Securities):
Chase Manhattan Bank USA, National Association
1201 Market Street
Wilmington, Delaware 19801
Attention: Institutional Trust Services
(c) if given to the Property Trustee, at its Corporate Trust Office
(or such other address as the Property Trustee may give notice of to the
Administrative Trustees, the Delaware Trustee and the Holders of the
Securities).
(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 of to the Property
Trustee, the Delaware Trustee and the Trust):
Energy East Corporation
P.O. Box 12904
Albany, New York 12212-2904
Attention: Treasurer
(e) if given to any other Holder, at the address set forth on the
Security Register.
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.
58
SECTION 13.2. GOVERNING LAW. This Trust Agreement and the rights of
the parties hereunder shall be governed by and interpreted in accordance with
the laws of the State of Delaware, provided that the immunities and standard of
care of the Property Trustee in connection with the administration of its trusts
hereunder shall be governed by and interpreted in accordance with the laws of
the jurisdiction of its incorporation.
SECTION 13.3. 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 Trust Agreement shall be
interpreted in a manner consistent with such classification.
SECTION 13.4. HEADINGS. Headings contained in this Trust Agreement
are inserted for convenience of reference only and do not affect the
interpretation of this Trust Agreement or any provision hereof.
SECTION 13.5. SUCCESSORS AND ASSIGNS. Whenever in this Trust
Agreement 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 Trust Agreement by the Sponsor and the Trustees shall bind
and inure to the benefit of their respective successors and assigns, whether so
expressed.
SECTION 13.6. PARTIAL ENFORCEABILITY. If any provision of this Trust
Agreement, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Trust Agreement, or the application
of such provision to persons or circumstances other than those to which it is
held invalid, shall not be affected thereby.
SECTION 13.7. COUNTERPARTS. This Trust Agreement may contain more
than one counterpart of the signature page and this Trust Agreement may be
executed by the affixing of the signature of each of the Trustees and the
Sponsor 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.
[THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY;
THE SIGNATURE PAGE FOLLOWS.]
59
IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed as of the day and year first above written.
ENERGY EAST CORPORATION,
as Sponsor, as Common Securities Holder
and as Note Issuer
By: ______________________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
as Property Trustee
By:_______________________________________
Name:
Title:
CHASE MANHATTAN BANK USA, NATIONAL
ASSOCIATION, as Delaware Trustee
By:_______________________________________
Name:
Title:
__________________________________________
Name:
Title: Administrative Trustee
__________________________________________
Name:
Title: Administrative Trustee
EXHIBIT A
[IF THE CAPITAL SECURITY IS TO BE A GLOBAL CAPITAL SECURITY, INSERT
THE FOLLOWING: THIS CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITY WITHIN THE
MEANING OF THE TRUST AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"),
OR A NOMINEE OF THE DEPOSITARY. THIS CAPITAL SECURITY IS EXCHANGEABLE FOR
CAPITAL SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY
OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST
AGREEMENT AND NO TRANSFER OF THIS CAPITAL SECURITY (OTHER THAN A TRANSFER OF
THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY
A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES. UNLESS THIS
CAPITAL SECURITY CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY TO THE NOTE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CAPITAL SECURITY CERTIFICATE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.]
CERTIFICATE NO.___________ NUMBER OF CAPITAL SECURITIES:
AS SET FORTH ON SCHEDULE A HERETO
CUSIP NO._________________
CERTIFICATE EVIDENCING __% CAPITAL SECURITIES
OF
ENERGY EAST CAPITAL TRUST [ ]
__% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $_____ PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY
GUARANTEED BY ENERGY EAST CORPORATION
ENERGY EAST CAPITAL TRUST [ ], a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
______________ (the "Holder") is the registered owner of the number of Capital
Securities of the Trust set forth on Schedule A hereto representing undivided
beneficial ownership interests in the assets of the Trust designated the "__%
Capital Securities" (Liquidation Amount $_____ per Capital Security) (the
"Capital Securities"). The Capital Securities are transferable on the register
of the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed
A-1
and in proper form for transfer as provided in the Trust Agreement (as defined
below). The designation, rights, privileges, restrictions, preferences and other
terms and provisions of the Capital Securities represented hereby are issued and
shall in all respects be subject to the provisions of the Amended and Restated
Trust Agreement of Energy East Capital Trust [ ], dated as of ________, as the
same may be amended from time to time (the "Trust Agreement"), by and among
ENERGY EAST CORPORATION, as Sponsor, _______________ and _______________, as
Administrative Trustees, The Chase Manhattan Bank, as Property Trustee, Chase
Manhattan Bank USA, National Association, as Delaware Trustee and the Holders.
Capitalized terms used herein but not defined shall have the meaning given them
in the Trust Agreement. The Holder is entitled to the benefits of the Guarantee
to the extent described therein. The Sponsor will provide a copy of the Trust
Agreement, the Guarantee and the Indenture to a Holder without charge upon
written request to the Sponsor at its principal place of business. Upon receipt
of this certificate, the Holder is bound by the Trust Agreement and is entitled
to the benefits thereunder. By acceptance, the Holder agrees to treat, for
United States federal income tax purposes, the Notes as indebtedness and the
Capital Securities as evidence of undivided indirect beneficial ownership
interests in the Notes.
IN WITNESS WHEREOF, the Trust has executed this certificate this
______ day of _______, ____.
ENERGY EAST CAPITAL TRUST [ ]
By _________________________________
Name:
Title: Administrative Trustee
CERTIFICATE OF AUTHENTICATION
This is one of the Capital Securities referred to in the
within-mentioned Trust Agreement.
THE CHASE MANHATTAN BANK,
as Property Trustee
By _________________________________
Authorized Officer
A-2
SCHEDULE A
SCHEDULE OF ADJUSTMENTS
The initial number of Capital Securities evidenced by the
Certificate to which this Schedule is attached is ___________________. The
notations on the following table evidence increases in the number of Capital
Securities evidenced by such Certificate.
Total Number of
Capital Securities
Increase in Number of Outstanding After Notation by
Closing Date Capital Securities Increase Property Trustee
------------ --------------------- ------------------- ----------------
A-3
EXHIBIT B
TRANSFER OF THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS SET FORTH
IN THE TRUST AGREEMENT REFERRED TO BELOW.
CERTIFICATE NO.______ NUMBER OF COMMON SECURITIES:
AS SET FORTH ON SCHEDULE A HERETO
CERTIFICATE EVIDENCING __% COMMON SECURITIES
OF
ENERGY EAST CAPITAL TRUST [ ]
__% COMMON SECURITIES
(LIQUIDATION AMOUNT $_____ PER COMMON SECURITY)
ENERGY EAST CAPITAL TRUST [ ], a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
ENERGY EAST CORPORATION (the "Holder") is the registered owner of the number of
common securities of the Trust set forth on Schedule A hereto representing an
undivided beneficial ownership interest in the assets of the Trust designated
the "__% Common Securities" (Liquidation Amount $_____ per Common Security) (the
"Common Securities"). The Common Securities are not transferable and any
attempted transfer thereof shall be void except as permitted by applicable law
and by Section 7.8(b)(ii) of the Trust Agreement (as defined below). The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities represented hereby are issued and shall in
all respects be subject to the provisions of the Amended and Restated Trust
Agreement of Energy East Capital Trust [ ], dated as of ________ (as the same
may be amended from time to time, the "Trust Agreement"), by and among ENERGY
EAST CORPORATION, as Sponsor, _________________ and _______________, as
Administrative Trustees, The Chase Manhattan Bank, as Property Trustee, Chase
Manhattan Bank USA, National Association, as Delaware Trustee, and the Holders.
The Holder is entitled to the benefits of the Guarantee to the extent described
therein. Capitalized terms used herein but not defined shall have the meaning
given them in the Trust Agreement. The Sponsor will provide a copy of the Trust
Agreement, the Guarantee and the Indenture to the Holder without charge upon
written request to the Sponsor at its principal place of business. Upon receipt
of this certificate, the Holder is bound by the Trust Agreement and is entitled
to the benefits thereunder. By acceptance, the Holder agrees to treat, for
United States federal income tax purposes, the Notes as indebtedness and the
Common Securities as evidence of an undivided indirect beneficial ownership
interest in the Notes.
B-1
IN WITNESS WHEREOF, the Trust has executed this certificate this
____ day of __________, ________.
ENERGY EAST CAPITAL TRUST [ ]
By:____________________________________
Name:
Title: Administrative Trustee
B-2
SCHEDULE A
SCHEDULE OF ADJUSTMENTS
The initial number of Common Securities evidenced by the Certificate
to which this Schedule is attached is ___________________. The notations on the
following table evidence increases in the number of Common Securities evidenced
by such Certificate.
Total Number of
Common Securities Notation by
Increase in Number of Outstanding After Administrative
Closing Date Common Securities Increase Trustee
------------ --------------------- ------------------- ----------------
B-3