AMENDED AND RESTATED DECLARATION
OF TRUST
OF
MARKEL CAPITAL TRUST I
January 13, 1997
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
310(a),(b)........................................... 5.3
310(c)............................................... N/A
311(a),(b)........................................... 2.1,2.2
311(c)............................................... N/A
312(a)............................................... 2.2
312(b)............................................... 2.2
313.................................................. 2.3
314(a)............................................... 2.4
314(b)............................................... N/A
314(c),(e)........................................... 2.5
314(d)............................................... N/A
314(f)............................................... N/A
315(a)............................................... 3.9
315(b)............................................... 2.7
315(c)............................................... 3.9
315(d)............................................... 3.9,3.10
315(e)............................................... 3.10
316(a)............................................... 2.6
316(b)............................................... 2.6
316(c)............................................... 12.2
317(a)............................................... 3.8
317(b)............................................... 7.5
318.................................................. 2.1
- -------------------
* This Cross-Reference Table does not constitute part of the Declaration
and shall not affect the interpretation of any of its terms or
provisions.
(i)
TABLE OF CONTENTS
Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions............................................... 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.......................... 10
SECTION 2.2 Lists of Holders of Securities............................ 11
SECTION 2.3 Reports by the Property Trustee........................... 11
SECTION 2.4 Periodic Reports to Property Trustee...................... 11
SECTION 2.5 Evidence of Compliance with Conditions
Precedent................................................. 11
SECTION 2.6 Events of Default; Waiver................................. 12
SECTION 2.7 Event of Default; Notice.................................. 14
ARTICLE III
ORGANIZATION
SECTION 3.1 Name...................................................... 14
SECTION 3.2 Office.................................................... 15
SECTION 3.3 Purpose................................................... 15
SECTION 3.4 Authority................................................. 15
SECTION 3.5 Title to Property of the Trust............................ 15
SECTION 3.6 Powers and Duties of the Administrative
Trustees.................................................. 16
SECTION 3.7 Prohibition of Actions by the Trust and
the Trustees.............................................. 19
SECTION 3.8 Powers and Duties of the Property
Trustee................................................... 20
SECTION 3.9 Certain Duties and Responsibilities of
the Property Trustee...................................... 22
SECTION 3.10 Certain Rights of Property Trustee........................ 24
SECTION 3.11 Delaware Trustee.......................................... 27
SECTION 3.12 Execution of Documents.................................... 27
SECTION 3.13 Not Responsible for Recitals or Issuance
of Securities............................................. 28
SECTION 3.14 Duration of Trust......................................... 28
(ii)
SECTION 3.15 Mergers................................................... 28
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities................... 30
SECTION 4.2 Responsibilities of the Sponsor........................... 30
SECTION 4.3 Right to Proceed.......................................... 31
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees: Appointment of
Co-Trustee................................................ 31
SECTION 5.2 Delaware Trustee.......................................... 32
SECTION 5.3 Property Trustee; Eligibility............................. 32
SECTION 5.4 Certain Qualifications of Administrative
Trustees and Delaware Trustee Generally................... 33
SECTION 5.5 Administrative Trustees................................... 33
SECTION 5.6 Delaware Trustee.......................................... 34
SECTION 5.7 Appointment, Removal and Resignation of
Trustees.................................................. 34
SECTION 5.8 Vacancies Among Trustees.................................. 36
SECTION 5.9 Effect of Vacancies....................................... 36
SECTION 5.10 Meetings.................................................. 37
SECTION 5.11 Delegation of Power....................................... 37
Section 5.12 Merger, Conversion, Consolidation or
Succession to Business.................................... 38
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions............................................. 38
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities................... 38
SECTION 7.2 Execution and Authentication.............................. 39
SECTION 7.3 Form and Dating........................................... 40
SECTION 7.4 Registrar, Paying Agent and Exchange
Agent..................................................... 42
SECTION 7.5 Paying Agent to Hold Money in Trust....................... 43
(iii)
SECTION 7.6 Replacement Securities.................................... 43
SECTION 7.7 Outstanding Capital Securities............................ 43
SECTION 7.8 Capital Securities in Treasury............................ 44
SECTION 7.9 Temporary Securities...................................... 44
SECTION 7.10 Cancellation.............................................. 45
SECTION 7.11 CUSIP Numbers............................................. 46
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust...................................... 46
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.................................... 47
SECTION 9.2 Transfer Procedures and Restrictions...................... 48
SECTION 9.3 Deemed Security Holders................................... 58
SECTION 9.4 Book Entry Interests...................................... 58
SECTION 9.5 Notices to Clearing Agency................................ 59
SECTION 9.6 Appointment of Successor Clearing
Agency.................................................... 59
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability................................................. 59
SECTION 10.2 Exculpation............................................... 60
SECTION 10.3 Fiduciary Duty............................................ 60
SECTION 10.4 Indemnification........................................... 61
SECTION 10.5 Outside Businesses........................................ 65
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year............................................... 66
SECTION 11.2 Certain Accounting Matters................................ 66
SECTION 11.3 Banking................................................... 67
SECTION 11.4 Withholding............................................... 67
(iv)
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments................................................ 67
SECTION 12.2 Meetings of the Holders of Securities;
Action by Written Consent................................. 69
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of
Property Trustee.......................................... 71
SECTION 13.2 Representations and Warranties of
Delaware Trustee.......................................... 72
ARTICLE XIV
REGISTRATION RIGHTS
SECTION 14.1 Registration Rights Agreement;
Liquidated Damages........................................ 73
ARTICLE XV
MISCELLANEOUS
SECTION 15.1 Notices................................................... 75
SECTION 15.2 Governing Law............................................. 76
SECTION 15.3 Intention of the Parties.................................. 76
SECTION 15.4 Headings.................................................. 77
SECTION 15.5 Successors and Assigns.................................... 77
SECTION 15.6 Partial Enforceability.................................... 77
SECTION 15.7 Counterparts.............................................. 77
ANNEX I Terms of 8.71% Series A/Series B Capital
Securities 8.71% Common Securities........................I-1
EXHIBIT A-1 Form of Capital Security Certificate.....................A1-1
EXHIBIT A-2 Form of Common Security Certificate......................A2-1
(v)
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
MARKEL CAPITAL TRUST I
January 13, 1997
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration")
dated and effective as of January 13, 1997, by the Trustees (as defined herein),
the Sponsor (as defined herein) and by the Holders (as defined herein), from
time to time, of undivided beneficial interests in the Trust to be issued
pursuant to this Declaration;
WHEREAS, the Delaware Trustee and the Sponsor established
Markel Capital Trust I (the "Trust"), a trust created under the Delaware
Business Trust Act pursuant to a Declaration of Trust dated as of December 30,
1996 (the "Original Declaration"), and a Certificate of Trust filed with the
Secretary of State of the State of Delaware on December 30, 1996, for the sole
purpose of issuing and selling certain securities representing undivided
beneficial interests in the assets of the Trust and investing the proceeds
thereof in certain Debentures of the Debenture Issuer (each as hereinafter
defined);
WHEREAS, prior to the date hereof, no Trust Securities have
been issued;
WHEREAS, all of the Trustees and the Sponsor, by this
Declaration, amend and restate each and every term and provision of the Original
Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a business trust under the Business Trust Act (as
defined herein) and that this Declaration constitute the governing instrument of
such business trust, the Trustees declare that all assets contributed to the
Trust will be held in trust for the benefit of the Holders (as defined herein),
from time to time, of the securities representing undivided beneficial interests
in the assets of the Trust issued hereunder, subject to the provisions of this
Declaration.
1
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined
in the preamble above or elsewhere herein have the respective meanings
assigned to them in this Section 1.1;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration"
are to this Declaration (including Appendix I hereto and Exhibit A
hereto) as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and
Sections and Annexes and Exhibits are to Articles and Sections of and
Annexes and Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires;
(f) a term defined in the Indenture (as defined herein) has
the same meaning when used in this Declaration unless otherwise defined
in this Declaration or the context otherwise requires; and
(g) a reference to the singular includes the plural and vice
versa.
"Administrative Trustee" has the meaning set forth in Section
5.1.
"Affiliate" has the same meaning as given to that term in Rule
405 under the Securities Act or any successor rule thereunder.
2
"Agent" means any Paying Agent, Registrar or Exchange Agent.
"Authorized Officer" of a Person means any other Person that
is authorized to legally bind such former Person.
"Book Entry Interest" means a beneficial interest in a Global
Certificate registered in the name of a Clearing Agency or its nominee,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday or a Sunday
or a day on which banking institutions in The City of New York are authorized or
required by law or executive order to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code ss.3801 et seq., as it may be amended from time to
time or any successor legislation.
"Capital Security Beneficial Owner" means, with respect to a
Book Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Capital Securities" means, collectively, the Series A Capital
Securities and the Series B Capital Securities.
"Capital Securities Guarantee" means, collectively, the Series
A Capital Securities Guarantee and the Series B Capital Securities Guarantee.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the Capital Securities and in whose name or in the name of a
nominee of that organization shall be registered a Global Certificate and which
shall undertake to effect book entry transfers and pledges of the Capital
Securities.
3
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time the
Clearing Agency effects book entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Time" means the "Closing Time" under the Purchase
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation.
"Commission" means the United States Securities and Exchange
Commission as from time to time constituted, or if any time after the execution
of this Declaration such Commission is not existing and performing the duties
now assigned to it under applicable Federal securities laws, then the body
performing such duties at such time.
"Common Securities" has the meaning specified in Section
7.1(a).
"Common Securities Guarantee" means the guarantee agreement
dated as of January 13, 1997 of the Guarantor in respect of the Common
Securities.
"Company Indemnified Person" means (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 (d) any officer, employee or agent of the
Trust or its Affiliates.
"Corporate Trust Office" means the office of the Property
Trustee at which the corporate trust business of the Property Trustee shall, at
any particular time, be principally administered, which office at the date of
execution of this Agreement is located at 450 West 33rd Street, 15th Floor, New
York, New York 10001.
"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 Holders of Securities.
4
"Debenture Issuer" means Markel Corporation, a Virginia
corporation, or any successor entity resulting from any consolidation,
amalgamation, merger or other business combination, in its capacity as issuer of
the Debentures under the Indenture.
"Debenture Trustee" means The Chase Manhattan Bank, a New York
banking corporation, as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.
"Debentures" means, collectively, the Series A Debentures and
the Series B Debentures.
"Default" means an event, act or condition that with notice or
lapse of time, or both, would constitute an Event of Default.
"Definitive Capital Securities" shall have the meaning set
forth in Section 7.3(c).
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Direct Action" shall have the meaning set forth in Section
3.8(e).
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing
Agency.
"Event of Default" in respect of the Securities means an Event
of Default (as defined in the Indenture) that has occurred and is continuing in
respect of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"Exchange Agent" has the meaning set forth in Section 7.4.
5
"Exchange Offer" means the exchange offer (including any
private exchange offer) contemplated in Section 2(a) of the Registration Rights
Agreement.
"Fiduciary Indemnified Person" has the meaning set forth in
Section 10.4(b).
"Global Capital Securities" has the meaning set forth in
Section 7.3(a).
"Guarantor" means Markel Corporation, a Virginia corporation,
or any successor entity resulting from any consolidation, amalgamation, merger
or other business combination in its capacity as guarantor under each of the
Securities Guarantees, as the case may be.
"Holder" means a Person in whose name a Security is
registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of January 13, 1997,
among the Debenture Issuer and the Debenture Trustee, as amended from time to
time.
"Initial Optional Redemption Date" has the meaning set forth
in Section 4(b) of Annex I hereto.
"Investment Company" means an investment company as defined in
the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Liquidation Amount" with respect to any Security means the
amount designated as such with respect thereto in Annex I hereto.
6
"Majority in Liquidation Amount" means, with respect to the
Trust Securities, except as provided in the terms of the Capital Securities or
by the Trust Indenture Act, Holder(s) of outstanding Trust 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 accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Ministerial Action" has the meaning set forth in Annex I
hereto.
"Offering Memorandum" has the meaning set forth in Section
3.6(b).
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two of the following: the Chairman, a Vice Chairman, the
Chief Executive Officer, the President, a Vice President, the Controller or the
Secretary or an Assistant Secretary, the Treasurer or an Assistant Treasurer of
such Person. Any Officers' Certificate delivered with respect to compliance with
a condition or covenant provided for in this Declaration shall include:
(a) a statement that each officer signing the Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering the
Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is necessary to
enable such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
7
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Opinion of Counsel" shall mean a written opinion of counsel,
who may be an employee of the Sponsor, and who shall be acceptable to the
Property Trustee.
"Paying Agent" has the meaning specified in Section 7.4.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Property Trustee" has the meaning set forth in Section
5.3(a).
"Property Trustee Account" has the meaning set forth in
Section 3.8(c).
"Purchase Agreement" means the Purchase Agreement for the
initial offering and sale of Capital Securities in the form of Exhibit C.
"QIBs" shall mean qualified institutional buyers as defined in
Rule 144A.
"Quorum" means a majority of the Administrative Trustees or,
if there are only two Administrative Trustees, both of them.
"Registrar" has the meaning set forth in Section 7.4.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of January 13, 1997, by and among the Trust, the Debenture
Issuer and the Initial Purchasers named therein, as amended from time to time.
"Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
8
"Regulation S" means Regulation S under the Securities Act, as
such regulation may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission.
"Regulation S Global Capital Security" has the meaning set
forth in Section 7.3(a).
"Related Party" means, with respect to the Sponsor, any direct
or indirect wholly owned subsidiary of the Sponsor or any other Person that
owns, directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property
Trustee, any officer within the Corporate Trust Office of the Property Trustee
with responsibility for the administration of this Declaration and also means,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of that officer's knowledge of and familiarity
with the particular subject.
"Restricted Definitive Capital Securities" has the meaning set
forth in Section 7.3(c).
"Restricted Capital Security" means a Capital Security
required by Section 9.2 to contain a Restricted Securities Legend.
"Restricted Securities Legend" has the meaning set forth in
Section 9.2.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act,
or any successor rule or regulation.
"Rule 144" means Rule 144 under the Securities Act, as such
rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.
"Rule 144A" means Rule 144A under the Securities Act, as such
rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.
"Rule 144A Global Capital Security" has the meaning set forth
in Section 7.3(a).
9
"Securities" or "Trust 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.
"Securities Guarantees" means the Common Securities Guarantee
and the Capital Securities Guarantee.
"Series A Capital Securities" has the meaning specified in
Section 7.1(a).
"Series A Capital Securities Guarantee" means the guarantee
agreement dated as of January 13, 1997 of the Guarantor in respect of the Series
A Capital Securities.
"Series A Debentures" means the 8.71% Series A Junior
Subordinated Deferrable Interest Debentures due January 1, 2046 of the Debenture
Issuer issued pursuant to the Indenture.
"Series B Capital Securities" has the meaning specified in
Section 7.1(a).
"Series B Capital Securities Guarantee" means the guarantee
agreement to be entered in connection with the Exchange Offer by the Guarantor
in respect of the Series B Capital Securities.
"Series B Debentures" means the 8.71% Series B Junior
Subordinated Deferrable Interest Debentures due January 1, 2046 of the Debenture
Issuer issued pursuant to the Indenture.
"Special Event" has the meaning set forth in Section 4(c) of
Annex I hereto.
"Special Event Redemption Price" has the meaning set forth in
Section 4(c) of Annex I hereto.
"Sponsor" means Markel Corporation, a Virginia corporation, or
any successor entity resulting from any merger, consolidation, amalgamation or
other business combination, in its capacity as sponsor of the Trust.
10
"Successor Entity" has the meaning specified in Section
3.15(b).
"Successor Delaware Trustee" has the meaning specified in
Section 5.7(b)(ii).
"Successor Property Trustee" has the meaning specified in
Section 5.7(b)(i).
"Successor Securities" has the meaning specified in Section
3.15(b).
"Super Majority" has the meaning set forth in Section
2.6(a)(ii).
"10% in Liquidation Amount" means, with respect to the Trust
Securities, except as provided in the terms of the Capital Securities or by the
Trust Indenture Act, Holder(s) of outstanding Trust 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.
"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).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee (including the Property Trustee, the Delaware Trustee
and the Administrative Trustees), so long as such Person shall continue as a
trustee of the Trust 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.
11
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Unrestricted Global Capital Security" has the meaning set
forth in Section 9.2(b).
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that would be required to be part of this Declaration if this
Declaration were a qualified indenture under the Trust Indenture Act and shall,
to the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the duties imposed by ss.ss. 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Administrative Trustees on
behalf of the Trust shall provide the Property Trustee, unless the Property
Trustee is Registrar for the Securities, (i) within 5 days after each record
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 such record date, 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
12
the Sponsor and the Administrative Trustees on behalf of the Trust, and (ii) at
any other time, within 30 days of receipt by the Trust of a written request for
a List of Holders as of a date no more than 14 days before such List of Holders
is given to the Property Trustee. 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 ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after May 15 of each year, commencing May 15,
1997, the Property Trustee shall provide to the Holders of the Capital
Securities such reports as are required by ss. 313 of the Trust Indenture Act,
if any, in the form and in the manner provided by ss. 313 of the Trust Indenture
Act. The Property Trustee shall also comply with the requirements of ss. 313(d)
of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to 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 are required by ss. 314 (if any) and the compliance certificate
required by ss. 314 of the Trust Indenture Act in the form, in the manner and at
the times required by ss. 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and an Administrative Trustee on behalf of
the Trust shall provide to the Property Trustee such evidence of compliance with
any conditions precedent provided for in this Declaration that relate to any of
the matters set forth in ss. 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to ss. 314(c)(1) of the
Trust Indenture Act may be given in the form of an Officers' Certificate.
13
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in Liquidation Amount of Capital
Securities may, by vote, on behalf of the Holders of all of the Capital
Securities, waive any past Event of Default in respect of the Capital Securities
and its consequences, provided that, if the underlying Event of Default under
the Indenture:
(i) is not waivable under the Indenture, the Event of
Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a
majority in aggregate principal amount of the holders of the Debentures
(a "Super Majority") to be waived under the Indenture, the Event of
Default under the Declaration may only be waived by the vote of the
Holders of at least the proportion in aggregate Liquidation Amount of
the Capital Securities that the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
Default shall cease to exist, and any Event of Default with respect to the
Capital Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other Default or an Event of Default with respect to the Capital
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Capital Securities of an Event of Default with respect to the Capital
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
14
(b) The Holders of a Majority in Liquidation Amount of the
Common Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where
the Holders of the Common Securities are deemed to have waived such
Event of Default under the Declaration as provided below in this
Section 2.6(b), the Event of Default under the Declaration shall also
not be waivable; or
(ii) requires the consent or vote of a Super Majority to
be waived, except where the Holders of the Common Securities are deemed
to have waived such Event of Default under the Declaration as provided
below in this Section 2.6(b), the Event of Default under the
Declaration may only be waived by the vote of the Holders of at least
the proportion in aggregate Liquidation Amount of the Common Securities
that the relevant Super Majority represents of the aggregate principal
amount of the Debentures outstanding;
provided further, that each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Securities and its consequences if all Events of Default with respect to
the Capital Securities have been cured, waived or otherwise eliminated, and
until such Events of Default 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 ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby
expressly excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act. Subject to the foregoing provisions of this Section 2.6(b),
upon such waiver, any such Default shall cease to exist and any Event of Default
with respect to the Common Securities arising therefrom shall be deemed to have
15
been cured for every purpose of this Declaration, but no such waiver shall
extend to any subsequent or other Default or Event of Default with respect to
the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee, at the direction of the Holders of the Capital Securities,
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu of
ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
(a) The Property Trustee shall, within 90 days after a
Responsible Officer of the Property Trustee obtains knowledge of the occurrence
of an Event of Default, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all Defaults with respect to the
Securities actually known to a Responsible Officer of the Property Trustee,
unless such Defaults have been cured before the giving of such notice; provided
that, except for a Default in the payment of principal of (or premium, if any)
or interest on any of the Debentures, 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 or Event of Default except:
(i) Default or Event of Default under Sections 5.01(a)
and 5.01(b) of the Indenture; or
(ii) any Default or Event of Default as to which the
Property Trustee shall have received written notice or of which a
Responsible Officer of the Property Trustee charged with the
administration of the Declaration shall have actual knowledge.
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(c) Within five Business Days after the occurrence of any
Event of Default actually known to the Property Trustee, the Property Trustee
shall transmit notice of such Event of Default to the Holders of the Capital
Securities, the Administrative Trustees and the Sponsor, unless such Event of
Default shall have been cured or waived. The Sponsor and the Administrative
Trustees shall file annually with the Property Trustee a certification as to
whether or not they are in compliance with all the conditions and covenants
applicable to them under this Declaration.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "Markel Capital Trust I" as such name may
be modified from time to time by the Administrative Trustees following written
notice to the Property Trustee, the Delaware Trustee and the Holders of
Securities. The Trust's activities may be conducted under the name of the Trust
or any other name deemed advisable by the Administrative Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o Markel
Corporation, 4551 Cox Road, Glen Allen, Virginia 23060- 3382. On ten Business
Days written notice to the Property Trustee, the Delaware Trustee and the
Holders of Securities, 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, (b) to use the gross proceeds from the sale of the
Securities to acquire the Debentures, and (c) 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, mortgage or pledge any of its assets, or
otherwise undertake (or permit to be undertaken) any activity that would cause
the Trust not to be classified for United States federal income tax purposes as
a grantor trust.
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SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to
the specific duties of the Property Trustee, the Administrative Trustees shall
have exclusive and complete 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 Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the
Debentures and the Property Trustee Account or as otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of the
Trust, but shall have an undivided beneficial interest in the assets of the
Trust.
SECTION 3.6 Powers and Duties of the Administrative Trustees.
The Administrative Trustees shall have the exclusive power,
duty and authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Capital Securities and the Common
Securities in accordance with this Declaration; provided, however, that except,
in the case of (i) and (ii), as contemplated in Section 7.1(a), (i) the Trust
may issue no more than one series of Capital Securities and no more than one
series of Common Securities, (ii) there shall be no interests in the Trust other
than the Securities, and (iii) the issuance of Securities shall be limited to a
simultaneous issuance of both Capital Securities and Common Securities at any
Closing Time;
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(b) in connection with the issue and sale of the Capital
Securities and the consummation of the Exchange Offer, at the direction of the
Sponsor, to:
(i) execute, if necessary, an offering memorandum (the
"Offering Memorandum") in preliminary and final form, including any
amendments or supplements thereto, prepared by the Sponsor, in relation
to the offering and sale of Series A Capital Securities to qualified
institutional buyers in reliance on Rule 144A under the Securities Act,
to institutional "accredited investors" (as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act) and outside the United States
to non-U.S. persons in offshore transactions in reliance on Regulation
S under the Securities Act, and to execute and file with the
Commission, at such time as determined by the Sponsor, any Registration
Statement, including any amendments thereto, as contemplated by the
Registration Rights Agreement;
(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;
(iii) at the direction of the Sponsor, execute and file
an application, prepared by the Sponsor, to the New York Stock Exchange
or any other national stock exchange or the Nasdaq Stock Market's
National Market for listing or quotation of the Capital Securities;
(iv) after the date of this Declaration, execute and
deliver letters, documents, or instruments with DTC and other Clearing
Agencies relating to the Capital Securities; and
(v) if required, execute and file with the Commission a
registration statement on Form 8-A, including any amendments thereto,
prepared by the Sponsor, relating to the registration of the Capital
Securities under Section 12(b) of the Exchange Act;
19
(c) to acquire the Series A Debentures with the proceeds of
the sale of the Series A Capital Securities and the Common Securities and to
exchange, or to direct the Property Trustee in writing to exchange, the Series A
Debentures for a like principal amount of Series B Debentures, pursuant to the
Exchange Offer; provided, however, that the Administrative Trustees shall cause
legal title to the Debentures to be held of record in the name of the Property
Trustee for the benefit of the Holders of the Capital Securities and the Holders
of Common Securities;
(d) to give the Sponsor and the Property Trustee prompt
written notice of the occurrence of a Special Event;
(e) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established, including and with
respect to, for the purposes of ss. 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of 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 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 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 ss.314(a)(4) of the
Trust Indenture Act to the Property Trustee, which certificate may be executed
by any Administrative Trustee;
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(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 Exchange Agent for the Securities or to appoint a Paying Agent for the
Securities as provided in Section 7.4 except for such time as such power to
appoint a Paying Agent is vested in the Property Trustee;
(m) to give prompt written notice to the Property Trustee and
to Holders of the Securities of any notice received from the Debenture Issuer of
its election to defer payments of interest on the Debentures by extending the
interest payment period under the Indenture;
(n) to execute all documents or instruments, perform all
duties and powers, and do all things for and on behalf of the Trust in all
matters necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate
for the preservation and the continuation of the Trust's valid existence,
rights, franchises and privileges as a statutory business trust under the laws
of the State of Delaware and of each other jurisdiction in which such existence
is necessary to protect the limited liability of the Holders of the Capital
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(p) to take any action, not inconsistent with this Declaration
or with applicable law, that the Administrative Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of the
Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an
Investment Company required to be registered under the Investment
Company Act;
(ii) causing the Trust to be classified for United
States federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure
that the Debentures will be treated as indebtedness of the Debenture
Issuer for United States federal income tax purposes; and
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(q) to take all action necessary to consummate the Exchange
Offer or otherwise cause the Capital Securities to be registered pursuant to an
effective registration statement in accordance with the provisions of the
Registration Rights Agreement; and to notify the Property Trustee in the event
any payments are due pursuant to Section 14.1 hereof.
(r) 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.
The Administrative Trustees must exercise the powers set forth
in this Section 3.6 in a manner that is consistent with the purposes and
functions of the Trust set out in Section 3.3, and the Administrative Trustees
shall not take any action that is inconsistent with the purposes and functions
of the Trust set forth in Section 3.3.
Subject to this Section 3.6, the 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 Sponsor.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
The Trust shall not, and the Trustees (including the Property
Trustee) shall not cause the Trust to, engage in any activity other than as
required or authorized by this Declaration. The Trust shall not:
(a) invest any proceeds received by the Trust from
holding the Debentures, but shall distribute all such proceeds to
Holders of Securities pursuant to the terms of this Declaration and of
the Securities;
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(b) acquire any assets other than as expressly provided
herein;
(c) possess Trust property for other than a Trust
purpose;
(d) make any loans or incur any indebtedness other than
loans represented by the Debentures;
(e) possess any power or otherwise act in such a way as
to vary the Trust assets or the terms of the Securities in any way
whatsoever;
(f) issue any securities or other evidences of
beneficial ownership of, or beneficial interest in, the Trust other
than the Securities; or
(g) other than as provided in this Declaration or Annex
I, (A) direct the time, method and place of conducting any proceeding
with respect to any remedy available to the Debenture Trustee, or
exercising any trust or power conferred upon the Debenture Trustee with
respect to the Debentures, (B) waive any past default that is waivable
under the Indenture, (C) exercise any right to rescind or annul any
declaration that the principal of all the Debentures shall be due and
payable, or (D) consent to any amendment, modification or termination
of the Indenture or the Debentures where such consent shall be required
unless the Trust shall have received an opinion of a nationally
recognized independent tax counsel experienced in such matters to the
effect that such amendment, modification or termination will not cause
more than an insubstantial risk that, for United States federal income
tax purposes, the Trust will not be classified as a grantor trust.
SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and
held of record in the name of the Property Trustee in trust for the benefit of
the Holders of the Securities. The right, title and interest of the Property
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Property Trustee in accordance with Section 5.7. Such
23
vesting and cessation of title shall be effective whether or not conveyancing
documents with regard to the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title
and interest in the Debentures 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 Trustee 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 Debentures held by the Property Trustee,
deposit such funds into the Property Trustee Account and make, or cause
any Paying Agent to make, payments to the Holders of the Capital
Securities and Holders of the Common Securities from the Property
Trustee Account in accordance with Section 6.1. Funds in the Property
Trustee Account shall be held uninvested until disbursed in accordance
with this Declaration. The Property Trustee 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", as that term is defined for purposes
of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Capital
Securities and the Common Securities to the extent the Debentures are
redeemed or mature; and
(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 shall be necessary or
appropriate to effect the distribution of the Debentures to Holders of
Securities upon the occurrence of certain events.
24
(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 Declaration and the Securities.
(e) Subject to Section 3.9(a), the Property Trustee shall take
any Legal Action which arises out of or in connection with an Event of Default
of which a Responsible Officer of the Property Trustee has actual knowledge or
the Property Trustee's duties and obligations under this Declaration or the
Trust Indenture Act and if the Property Trustee shall have failed to take such
Legal Action, the Holders of the Capital Securities may take such Legal Action,
to the same extent as if such Holders of Capital Securities held an aggregate
principal amount of Debentures equal to the aggregate Liquidation Amount of such
Capital Securities, without first proceeding against the Property Trustee or the
Trust; provided, however, that if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay the principal of or premium, if any, or interest on the Debentures on the
date such principal, premium, if any, or interest is otherwise payable (or in
the case of redemption, on the redemption date), then a Holder of Capital
Securities may directly institute a proceeding for enforcement of payment to
such Holder of the principal of or premium, if any, or interest on the
Debentures 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 Debentures. In connection with such Direct
Action, the rights of the Holders of the Common Securities will be subrogated to
the rights of such Holder of Capital Securities to the extent of any payment
made by the Debenture Issuer to such Holder of Capital Securities in such Direct
Action. Except as provided in the preceding sentences, the Holders of Capital
Securities will not be able to exercise directly any other remedy available to
the holders of the Debentures.
(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
25
(ii) a Successor Property Trustee has been appointed and
has accepted that appointment in accordance with Section 5.7(b).
(g) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of Debentures
under the Indenture and, if an Event of Default actually known to a Responsible
Officer of the Property Trustee occurs and is continuing, the Property Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debentures subject to the rights of the Holders pursuant to this
Declaration and the terms of the Securities.
(h) The Property Trustee shall be authorized to undertake any
actions set forth in ss.317(a) of the Trust Indenture Act.
(i) For such time as the Property Trustee is the Paying Agent,
the Property Trustee may authorize one or more Persons to act as additional
Paying Agents and to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all securities and any such
Paying Agent shall comply with ss.317(b) of the Trust Indenture Act. Any such
additional Paying Agent may be removed by the Property Trustee at any time the
Property Trustee remains as Paying Agent and a successor Paying Agent or
additional Paying Agents may be (but are not required to be) appointed at any
time by the Property Trustee.
(j) 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 must exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set out
in Section 3.3.
26
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee.
(a) The Property Trustee, before the occurrence of any Event
of Default and after the curing or waiving of all Events of Default that may
have occurred, shall undertake to perform only such duties as are specifically
set forth in this Declaration and in the Securities and no implied covenants
shall be read into this Declaration against the Property Trustee. In case an
Event of Default has occurred (that has not been cured or waived pursuant to
Section 2.6) of which a Responsible Officer of the Property Trustee has actual
knowledge, the Property Trustee shall exercise such of the rights and powers
vested in it by this Declaration, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to
relieve the 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 an Event of Default and
after the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Property
Trustee shall be determined solely by the express provisions
of this Declaration and in the Securities and the Property
Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Declaration and in the Securities, and no implied covenants or
obligations shall be read into this Declaration 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 Declaration; provided, however, that in
the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to
the Property Trustee, the Property Trustee shall be under a
duty to examine the same to determine whether or not they
conform to the requirements of this Declaration;
27
(ii) the Property Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Property Trustee, unless it shall be proved that the Property Trustee
was negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of not less than a
Majority in Liquidation Amount of the Securities relating to the time,
method and place of conducting any proceeding for any remedy available
to the Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration 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
Declaration 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 Debentures
and the Property Trustee 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 Declaration 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 Debentures or the payment of any taxes or
assessments levied thereon or in connection therewith;
28
(vii) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree
in writing with the Sponsor. Money held by the Property Trustee need
not be segregated from other funds held by it except in relation to the
Property Trustee 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 Declaration, 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 Declaration may be
sufficiently evidenced by an Officers' Certificate;
(iii) whenever in the administration of this Declaration,
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;
29
(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 rerecording, refiling or reregistration
thereof;
(v) the Property Trustee may consult with counsel or
other experts of its selection and the advice or opinion of such
counsel and experts with respect to legal matters or advice within the
scope of such experts' area of expertise shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion, such counsel may be counsel to the Sponsor or any of
its Affiliates, and may include any of its employees. The Property
Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of
competent jurisdiction;
(vi) the Property Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this
Declaration at the request or direction of any 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)(vi) shall be taken to relieve the Property
Trustee, upon the occurrence of an Event of Default, of its obligation
to exercise the rights and powers vested in it by this Declaration;
(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
30
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 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 Declaration, 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 Declaration
the Property Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder, the Property Trustee (i) may request instructions
from the Holders of the Securities which instructions may only be given
by the Holders of the same proportion in Liquidation Amount of the
Securities as would be entitled to direct the 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
Declaration, the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Declaration; and
31
(xii) the Property Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith,
without negligence, and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Declaration.
(b) No provision of this Declaration shall be deemed to impose
any duty or obligation on the 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 Declaration other
than Section 5.2, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Administrative Trustees or the Property Trustee
described in this Declaration. Except as set forth in Section 5.2, the Delaware
Trustee shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of ss.3807 of the Business Trust Act and taking such actions as are
required to be taken by the Delaware Trustee under 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, the Delaware Trustee shall be entitled to the
benefits of Section 3.9(b)(ii) through (vii) and Section 3.10. No implied
covenants or obligations shall be read into this Declaration against 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, 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 statement referred to in Section
3.6(b)(i), including any amendments thereto, shall be signed by all of the
Administrative Trustees.
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SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities
shall be taken as the statements of the Sponsor, and the Trustees do not assume
any responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of
Article VIII hereof, shall have existence up to January 31, 2047.
SECTION 3.15 Mergers.
(a) The Trust may not merge or convert with or into,
consolidate, amalgamate, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any Person, except as
described in Section 3.15(b) and (c).
(b) The Trust may, at the request of the Sponsor, with the
consent of the Administrative Trustees or, if there are more than two, a
majority of the Administrative Trustees and without the consent of the Holders
of the Securities, the Delaware Trustee or the Property Trustee, merge or
convert with or into, consolidate, amalgamate, or be replaced by, or convey,
transfer or lease its properties and assets as an entirety or substantially as
an entirety to, a trust organized as such under the laws of any State; provided
that:
(i) such successor entity (the "Successor Entity")
either:
(A) expressly assumes all of the obligations of the
Trust under the Securities; or
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(B) substitutes for the Securities other securities
having substantially the same terms as the Securities (the
"Successor Securities") so long as the Successor Securities
rank the same as the Securities rank with respect to
Distributions and payments upon liquidation, redemption and
otherwise;
(ii) the Sponsor expressly appoints a trustee of the
Successor Entity that possesses the same powers and duties as the
Property Trustee as the holder of the Debentures;
(iii) the Successor Securities are listed or quoted, or
any Successor Securities will be listed or quoted upon notification of
issuance, on any national securities exchange or with another
organization on which the Capital Securities are then listed or quoted,
if any;
(iv) such merger, conversion, 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, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the Holders
of the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of such Holders'
interests in the new entity);
(vi) such Successor Entity has a purpose identical to
that of the Trust;
(vii) prior to such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Sponsor
has received an opinion of an independent counsel to the Trust
experienced in such matters to the effect that:
(A) such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease does
34
not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor
Securities) in any material respect (other than with respect
to any dilution of the Holders' interest in the new entity);
(B) following such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease,
neither the Trust nor the Successor Entity will be required to
register as an Investment Company under the Investment Company
Act; and
(C) following such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer, or lease, the
Trust (or the Successor Entity) will continue to be classified
as a grantor trust for United States federal income tax
purposes; and
(viii) the Sponsor or any permitted successor or assignee
owns all of the common securities of such Successor Entity and
guarantees the obligations of such Successor Entity under the Successor
Securities at least to the extent provided by the Capital Securities
Guarantee and the Common Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not,
except with the consent of all Holders of the Securities in liquidation amount
of the Securities, consolidate, amalgamate, merge or convert with or into, or be
replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to, any other Person or permit any
other Person to consolidate, amalgamate, merge or convert with or into, or
replace it if such consolidation, amalgamation, merger, conversion, replacement,
conveyance, transfer or lease would cause the Trust or the Successor Entity not
to be classified as a grantor trust for United States federal income tax
purposes.
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ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
At the Closing Time, the Sponsor will purchase all of the
Common Securities then issued by the Trust, in an amount at least equal to 3% of
the capital of the Trust, at the same time as the Series A Capital Securities
are issued and sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Capital
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare the Offering Memorandum, including any
amendments or supplements thereto, and to prepare for filing by the Trust with
the Commission any Registration Statement, including any amendments thereto as
contemplated by the Registration Rights Agreement;
(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 or advisable by the Sponsor, to
prepare for filing by the Trust an application to the New York Stock Exchange or
any other national stock exchange or the Nasdaq National Market for listing or
quotation of the Capital Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the Capital
Securities under Section 12(b) of the Exchange Act, including any amendments
thereto; and
(e) to negotiate the terms of the Purchase Agreement and the
Registration Rights Agreement providing for the sale of the Capital Securities
and to execute the same on behalf of the Trust.
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SECTION 4.3 Right to Proceed.
The Sponsor acknowledges the rights of the Holders of Capital
Securities, in the event that a failure of the Trust to pay Distributions on the
Capital Securities is attributable to the failure of the Company to pay interest
or principal on the Debentures, to institute Direct Actions against the
Debenture Issuer for enforcement of its payment obligations on the Debentures.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees: Appointment of Co-Trustee.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the
Sponsor may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a Majority in
Liquidation Amount of the Common Securities voting as a class at a meeting of
the Holders of the Common Securities; provided, however, that, the number of
Trustees shall in no event be less than two (2); provided further, that (1) one
Trustee shall be the Delaware Trustee; (2) there shall be at least one Trustee
who is an employee or officer of, or is affiliated with the Sponsor (an
"Administrative Trustee"); and (3) one Trustee shall be the Property Trustee for
so long as this Declaration is 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. Notwithstanding the above, unless an Event of
Default shall have occurred and be continuing, at any time or times, for the
purpose of meeting the legal requirements of the Trust Indenture Act or of any
jurisdiction in which any part of the Trust's property may at the time be
located, the Holders of a Majority in Liquidation Amount of the Common
Securities acting as a class at a meeting of the Holders of the Common
Securities, and the Administrative Trustees shall have power to appoint one or
more Persons either to act as a co-trustee, jointly with the Property Trustee,
37
of all or any part of the Trust's property, or to act as separate trustee of any
such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such person or persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of this Declaration. In case an Event of Default has
occurred and is continuing, the Property Trustee alone shall have power to make
any such appointment of a co-trustee.
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, one 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 to the Property Trustee in its
capacity as Property Trustee.
SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee (the "Property
Trustee") which shall act as Property Trustee and which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under
the laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or Person
permitted by the Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise
38
corporate trust powers, having a combined capital and surplus of at
least 50 million U.S. dollars ($50,000,000), and subject to supervision
or examination by federal, state, territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then for the purposes of this
Section 5.3(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published.
(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.3(a), the Property Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.7(c).
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of ss.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 ss.310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of ss. 310(b) of the Trust Indenture Act.
(d) The Capital Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in ss.310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
The Chase Manhattan Bank
450 West 33rd Street, 15th
Floor New York, New York 10001
Attention: Corporate Trustee
Administration Department
SECTION 5.4 Certain Qualifications of Administrative Trustees and Delaware
Trustee Generally.
Each Administrative Trustee and the Delaware Trustee (unless
the Property Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
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SECTION 5.5 Administrative Trustees.
(a) The initial Administrative Trustees shall be:
Steven A. Markel
c/o Markel Corporation
4551 Cox Road
Glen Allen, Virginia 23060
Anthony F. Markel
c/o Markel Corporation
4551 Cox Road
Glen Allen, Virginia 23060
40
Darrell D. Martin
c/o Markel Corporation
4551 Cox Road
Glen Allen, Virginia 23060
(b) Except as expressly set forth in this Declaration 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.
(c) 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, provided, that,
the registration statement referred to in Section 3.6, including any amendments
thereto, shall be signed by all of the Administrative Trustees; and
(d) An 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 5.6 Delaware Trustee.
The initial Delaware Trustee shall be:
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
Attention: Corporate Trustee
Administration Department
SECTION 5.7 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.7(b), any Trustee may be
appointed or removed without cause at any time:
41
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor;
(ii) in the case of Administrative Trustees, after the
issuance of any Securities, by vote of the Holders of a Majority in
Liquidation Amount of the Common Securities voting as a class at a
meeting of the Holders of the Common Securities;
(iii) in the case of the Property Trustee and the
Delaware Trustee, unless an Event of Default shall have occurred and be
continuing after the issuance of any Securities, by vote of the Holders
of a Majority in Liquidation Amount of the Common Securities voting as
a class at a meeting of the Holders of the Common Securities; and
(iv) in the case of the Property Trustee and the
Delaware Trustee, if an Event of Default shall have occurred and be
continuing after the issuance of the Securities, by vote of Holders of
a Majority in Liquidation Amount of the Capital Securities voting as a
class at a meeting of Holders of the Capital Securities.
(b) (i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.7(a) until a successor Trustee possessing
the qualifications to act as Property Trustee under Section 5.3 (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 removed Property Trustee, the Administrative Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not
be removed in accordance with this Section 5.7(a) until a successor
Trustee possessing the qualifications to act as Delaware Trustee under
Sections 5.2 and 5.4 (a "Successor Delaware Trustee") has been
appointed and has accepted such appointment by written instrument
executed by such Successor Delaware Trustee and delivered to the
removed Delaware Trustee, the Administrative Trustees and the Sponsor.
42
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided, however,
that:
(i) No such resignation of the Trustee that acts as the
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 Trustee and delivered to
the Administrative Trustees, 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
Administrative Trustees, 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 5.7.
(e) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.7 within 60 days after delivery of an instrument of resignation or
removal, the Property Trustee or Delaware Trustee resigning or being removed, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Property Trustee or Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper and
prescribe, appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be.
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(f) No Property Trustee or Delaware Trustee shall be liable
for the acts or omissions of any Successor Property Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.8 Vacancies Among Trustees.
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 5.1, or if the number of
Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the 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 5.7.
SECTION 5.9 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy in the number
of Administrative Trustees shall occur, until such vacancy is filled by the
appointment of an Administrative Trustee in accordance with Section 5.7, 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 Declaration.
SECTION 5.10 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 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 such meeting. Notice of
any telephonic meetings of the Administrative Trustees or any committee thereof
shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
44
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 Declaration, 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 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 5.11 Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purpose of executing any documents
contemplated in Section 3.6, including any registration statement or amendment
thereto filed with the Commission, or making any other governmental filing; and
(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.
45
Section 5.12 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Property Trustee or the
Delaware Trustee or any Administrative Trustee that is not a natural person, as
the case may be, may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which such Trustee shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of such
Trustee, shall be the successor of such Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Each Holder shall receive Distributions in accordance with the
applicable terms of such Holder's Securities. If and to the extent that the
Debenture Issuer makes a payment of interest (including Compounded Interest (as
defined in the Indenture) and Additional Sums (as defined in the Indenture)),
premium and/or principal or any other payments on the Debentures held by the
Property Trustee or Liquidated Damages (as defined in the Registration Rights
Agreement) or any other payments pursuant to the Registration Rights Agreement
with respect to the Debentures held by the Property Trustee (the amount of any
such payment being a "Payment Amount"), the Property Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders in accordance
with the respective terms of the Securities held by them.
ARTICLE VII
ISSUANCE 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
interests in the assets of the Trust having such terms as are set forth in Annex
I (the "Series A Capital Securities") and one class of common securities
46
representing undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Annex I (the "Common Securities"). The
Administrative Trustees shall on behalf of the Trust issue one class of capital
securities representing undivided beneficial interests in the Trust having such
terms as set forth in Annex I (the "Series B Capital Securities") in exchange
for Series A Capital Securities accepted for exchange in the Exchange Offer,
which Series B Capital Securities shall not bear the legends required by Section
9.2(i) unless the Holder of such Series A Capital Securities is either (A) a
broker-dealer who purchased such Series A Capital Securities directly from the
Trust for resale pursuant to Rule 144A or any other available exemption under
the Securities Act, (B) a Person participating in the distribution of the Series
A Capital Securities or (C) a Person who is an affiliate (as defined in Rule
144A) of the Trust. The Trust shall issue no securities or other interests in
the assets of the Trust other than the Capital Securities and the Common
Securities.
(b) The consideration received by the Trust for the issuance
of the Securities shall constitute a contribution to the capital of the Trust
and shall not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable.
(d) Every Person, by virtue of having become a Holder or a
Capital Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration.
SECTION 7.2 Execution and Authentication.
The Securities shall be signed on behalf of the Trust
by an Administrative Trustee. Such signature may be by manual or facsimile
signature. Typographical and other minor errors or defects in any reproduction
of any such signature shall not affect the validity of any Security. In case any
Administrative Trustee who shall have signed any of the Securities shall cease
to be such Administrative Trustee before the Securities so signed shall be
47
delivered by the Trust, such Securities nevertheless may be delivered as though
the Person who signed such Securities had not ceased to be such Administrative
Trustee; and any Securities may be signed on behalf of the Trust by such Persons
who, at the actual date of execution of such Security, shall be the
Administrative Trustees of the Trust, although at the date of the execution and
delivery of the Declaration any such Person was not such an Administrative
Trustee.
A Capital Security shall not be valid until authenticated by
the manual signature of an authorized officer of the Property Trustee. The
signature shall be conclusive evidence that the Capital Security has been
authenticated under this Declaration.
Upon a written order of the Trust signed by one Administrative
Trustee, the Property Trustee shall authenticate the Capital Securities for
original issue. The aggregate number of Capital Securities outstanding at any
time shall not exceed the number set forth in the Terms in Annex I hereto except
as provided in Section 7.6.
The Property Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Capital Securities. An authenticating
agent may authenticate Capital Securities whenever the Property Trustee may do
so. Each reference in this Declaration 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.
SECTION 7.3 Form and Dating.
The Capital Securities and the Property Trustee's certificate
of authentication shall be substantially in the form of Exhibit A-1 and the
Common Securities shall be substantially in the form of Exhibit A-2, each of
which is hereby incorporated in and expressly made a part of this Declaration.
Certificates representing the Securities may be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Administrative Trustees, as evidenced by their execution thereof. The
Securities may have letters, CUSIP or other numbers, notations or other marks of
48
identification or designation and such legends or endorsements required by law,
stock exchange rule, agreements to which the Trust is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Administration Trustees, as evidenced by their execution thereof). The
Trust at the direction of the Sponsor shall furnish any such legend not
contained in Exhibit A-1 to the Property Trustee in writing. Each Capital
Security shall be dated the date of its authentication. The terms and provisions
of the Securities set forth in Annex I and the forms of Securities set forth in
Exhibits A-1 and A-2 are part of the terms of this Declaration and to the extent
applicable, the Property Trustee and the Sponsor, by their execution and
delivery of this Declaration, expressly agree to such terms and provisions and
to be bound thereby.
(a) Global Securities. The Capital Securities offered and
sold to QIBs in reliance on Rule 144A or offered and sold outside the United
States to non-U.S. persons in offshore transactions in reliance on Regulation S,
as provided in the Purchase Agreement, shall be issued in the form of one or
more, permanent global Securities in definitive, fully registered form without
Distribution coupons with the appropriate global legends and the Restricted
Securities Legend set forth in Exhibit A-1 hereto (respectively, a "Rule 144A
Global Capital Security" or "Regulation S Global Capital Security"), which shall
be deposited on behalf of the purchasers of the Capital Securities represented
thereby with the Property Trustee or the Registrar, as custodian for the
Clearing Agency, and registered in the name of the Clearing Agency or a nominee
of the Clearing Agency, duly executed by the Trust and authenticated by the
Property Trustee as hereinafter provided. The number of Capital Securities
represented by the Rule 144A Global Capital Security and the Regulation S Global
Capital Security may from time to time be increased or decreased by adjustments
made on the records of the Property Trustee and the Clearing Agency or its
nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 7.3(b) shall apply
only to the Rule 144A Global Capital Securities, the Regulation S Global Capital
Securities and such other Capital Securities in global form as may be authorized
by the Trust to be deposited with or on behalf of the Clearing Agency.
49
The Administrative Trustees shall execute and the Property
Trustee shall, in accordance with this Section 7.3, authenticate and make
available for delivery initially one or more Rule 144A Global Capital Securities
and one or more Regulation S Global Capital Securities that (i) shall be
registered in the name of Cede & Co. or other nominee of such Clearing Agency
and (ii) shall be delivered by the Trustee to such Clearing Agency or pursuant
to such Clearing Agency's written instructions or held by the Property Trustee
or the Registrar as custodian for the Clearing Agency.
Members of, or participants in, the Clearing Agency
("Participants") shall have no rights under this Declaration with respect to any
Rule 144A Global Capital Security or any Regulation S Global Capital Security
held on their behalf by the Clearing Agency or by the Property Trustee or the
Registrar as the custodian of the Clearing Agency or under such Rule 144A Global
Capital Security or such Regulation S Global Capital Security, and the Clearing
Agency may be treated by the Trust, the Property Trustee and any agent of the
Trust or the Property Trustee as the absolute owner of such Rule 144A Global
Capital Security or such Regulation S Global Capital Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Trust, the Property Trustee or any agent of the Trust or the Property Trustee
from giving effect to any written certification, proxy or other authorization
furnished by the Clearing Agency or impair, as between the Clearing Agency and
its Participants, the operation of customary practices of such Clearing Agency
governing the exercise of the rights of a holder of a beneficial interest in any
Rule 144A Global Capital Security or any Regulation S Global Capital Security.
(c) Definitive Capital Securities. Except as provided in
Section 7.9, owners of beneficial interests in a Rule 144A Global Capital
Security or a Regulation S Global Capital Security will not be entitled to
receive physical delivery of certificated Capital Securities ("Definitive
Capital Securities"). Purchasers of Securities who are "accredited investors"
(as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and did
not purchase Capital Securities in reliance on Regulation S will receive Capital
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Securities in the form of individual certificates in definitive, fully
registered form without distribution coupons and with the Restricted Securities
Legend set forth in Exhibit A-1 hereto ("Restricted Definitive Capital
Securities"); provided, however, that upon registration of transfer of such
Restricted Definitive Capital Securities to a QIB, such Restricted Definitive
Capital Securities will, unless the Rule 144A Global Capital Security has
previously been exchanged, be exchanged for an interest in a Rule 144A Global
Capital Security pursuant to the provisions of Section 9.2. Restricted
Definitive Capital Securities will bear the Restricted Securities Legend set
forth on Exhibit A-1 unless removed in accordance with this Section 7.3 or
Section 9.2.
SECTION 7.4 Registrar, Paying Agent and Exchange Agent.
The Trust shall maintain in the Borough of Manhattan, The City
of New York, (i) an office or agency where Capital Securities may be presented
for registration of transfer ("Registrar"), (ii) an office or agency where
Capital Securities may be presented for payment ("Paying Agent") and (iii) an
office or agency where Securities may be presented for exchange ("Exchange
Agent"). The Registrar shall keep a register of the Capital Securities and of
their transfer. The Trust may appoint the Registrar, the Paying Agent and the
Exchange Agent and may appoint one or more co-registrars, one or more additional
paying agents and one or more additional exchange agents in such other locations
as it shall determine. The term "Registrar" includes any additional registrar,
"Paying Agent" includes any additional paying agent and the term "Exchange
Agent" includes any additional exchange agent. The Trust may change any Paying
Agent, Registrar, co-registrar or Exchange Agent without prior notice to any
Holder. The Paying Agent shall be permitted to resign as Paying Agent upon 30
days' written notice to the Property Trustee and the Sponsor. The Trust shall
notify the Property Trustee of the name and address of any Agent not a party to
this Declaration. If the Trust fails to appoint or maintain another entity as
Registrar, Paying Agent or Exchange Agent, the Property Trustee shall act as
such. The Trust or any of its Affiliates may act as Paying Agent, Registrar, or
Exchange Agent. The Property Trustee shall act as Paying Agent, Registrar and
Exchange Agent for the Common Securities.
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The Trust initially appoints the Property Trustee as
Registrar, Paying Agent, and Exchange Agent for the Capital Securities.
SECTION 7.5 Paying Agent to Hold Money in Trust.
The Trust shall require each Paying Agent other than the
Property Trustee to agree in writing that the Paying Agent will hold in trust
for the benefit of Holders or the Property Trustee all money held by the Paying
Agent for the payment of Liquidation Amounts or Distributions on the Securities,
and will notify the Property Trustee if there are insufficient funds for such
purpose. While any such insufficiency continues, the Property Trustee may
require a Paying Agent to pay all money held by it to the Property Trustee. The
Trust at any time may require a Paying Agent to pay all money held by it to the
Property Trustee and to account for any money disbursed by it. Upon payment over
to the Property Trustee the Paying Agent (if other than the Trust or an
Affiliate of the Trust) shall have no further liability for the money. If the
Trust or the Sponsor or an Affiliate of the Trust or the Sponsor acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
the Holders all money held by it as Paying Agent.
SECTION 7.6 Replacement Securities.
If the Holder of a Security claims that the Security has been
lost, destroyed or wrongfully taken or if such Security is mutilated and is
surrendered to the Trust or in the case of the Capital Securities to the
Property Trustee, the Administrative Trustees shall execute and the Property
Trustee shall authenticate a replacement Security if the Property Trustee's and
the Administrative Trustees' requirements, as the case may be, are met. An
indemnity bond must be provided by the Holder which, in the judgment of the
Property Trustee, is sufficient to protect the Trustees, the Sponsor or any
authenticating agent from any loss which any of them may suffer if a Security is
replaced. The Trust may charge such Holder for its expenses in replacing a
Security.
Every replacement Security is an additional beneficial
interest in the Trust.
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SECTION 7.7 Outstanding Capital Securities.
The Capital Securities outstanding at any time are all the
Capital Securities authenticated by the Property Trustee except for those
cancelled by it, those delivered to it for cancellation, and those described in
this Section as not outstanding.
If a Capital Security is replaced, paid or purchased pursuant
to Section 7.6 hereof, it ceases to be outstanding unless the Property Trustee
receives proof satisfactory to it that the replaced, paid or purchased Capital
Security is held by a bona fide purchaser.
If Capital Securities are considered paid in accordance with
the terms of this Declaration, they cease to be outstanding and Distributions on
them shall cease to accumulate.
Except as otherwise provided herein, a Capital Security does
not cease to be outstanding because one of the Trustees, the Sponsor or an
Affiliate of the Sponsor holds the Security.
SECTION 7.8 Capital Securities in Treasury.
In determining whether the Holders of the required amount of
Securities have concurred in any direction, waiver or consent, Capital
Securities owned by the Trust, the Sponsor or an Affiliate of the Sponsor, as
the case may be, shall be disregarded and deemed not to be outstanding, except
that for the purposes of determining whether the Property Trustee shall be fully
protected in relying on any such direction, waiver or consent, only Capital
Securities which a Responsible Officer of the Property Trustee actually knows
are so owned shall be so disregarded.
SECTION 7.9 Temporary Securities.
(a) Until Definitive Securities are ready for delivery, the
Trust may prepare and, in the case of the Capital Securities, the Property
Trustee shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of Definitive Securities but may have variations that
the Trust considers appropriate for temporary Securities. Without unreasonable
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delay, the Trust shall prepare and, in the case of the Capital Securities, the
Property Trustee shall authenticate Definitive Securities in exchange for
temporary Securities.
(b) A Global Capital Security deposited with the Clearing
Agency or with the Property Trustee as custodian for the Clearing Agency
pursuant to Section 7.3 shall be transferred to the beneficial owners thereof in
the form of certificated Capital Securities only if such transfer complies with
Section 9.2 and (i) the Clearing Agency notifies the Company that it is
unwilling or unable to continue as Clearing Agency for such Global Capital
Security or if at any time such Clearing Agency ceases to be a "clearing agency"
registered under the Exchange Act and a clearing agency is not appointed by the
Sponsor within 90 days of such notice, (ii) a Default or an Event of Default has
occurred and is continuing or (iii) the Trust at its sole discretion elects to
cause the issuance of certificated Capital Securities.
(c) Any Global Capital Security that is transferable to the
beneficial owners thereof in the form of certificated Capital Securities
pursuant to this Section 7.9 shall be surrendered by the Clearing Agency to the
Property Trustee located in the Borough of Manhattan, The City of New York, to
be so transferred, in whole or from time to time in part, without charge, and
the Property Trustee shall authenticate and make available for delivery, upon
such transfer of each portion of such Global Capital Security, an equal
aggregate Liquidation Amount of Securities of authorized denominations in the
form of certificated Capital Securities. Any portion of a Global Capital
Security transferred pursuant to this Section shall be registered in such names
as the Clearing Agency shall direct. Any Capital Security in the form of
certificated Capital Securities delivered in exchange for an interest in the
Restricted Global Capital Security shall, except as otherwise provided by
Sections 7.3 and 9.1, bear the Restricted Securities Legend set forth in Exhibit
A-1 hereto.
(d) Subject to the provisions of Section 7.9(c), the Holder of
a Global Capital Security may grant proxies and otherwise authorize any Person,
including Participants and Persons that may hold interests through Participants,
to take any action which such Holder is entitled to take under this Declaration
or the Securities.
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(e) In the event of the occurrence of any of the events
specified in Section 7.9(b), the Trust will promptly make available to the
Property Trustee a reasonable supply of certificated Capital Securities in fully
registered form without Distribution coupons.
SECTION 7.10 Cancellation.
The Trust at any time may deliver Capital Securities to the
Property Trustee for cancellation. The Registrar, Paying Agent and Exchange
Agent shall forward to the Property Trustee any Capital Securities surrendered
to them for registration of transfer, redemption, exchange or payment. The
Property Trustee shall promptly cancel all Capital Securities surrendered for
registration of transfer, redemption, exchange, payment, replacement or
cancellation and shall dispose of canceled Capital Securities in accordance with
its customary procedures unless any Administrative Trustee otherwise directs the
Property Trustee in writing. The Trust may not issue new Capital Securities to
replace Capital Securities that it has paid or that have been delivered to the
Property Trustee for cancellation or that any Holder has exchanged.
SECTION 7.11 CUSIP Numbers.
The Trust in issuing the Capital Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Property Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders of Capital
Securities; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Capital
Securities or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Capital
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Sponsor will promptly notify the Property Trustee
of any change in the CUSIP numbers.
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ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall automatically be terminated and dissolved and
its affairs wound up upon the earliest to occur of the following events:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or
liquidation or its equivalent with respect to the Sponsor, or the
revocation of the Sponsor's charter and the expiration of 90 days after
the date of revocation without a reinstatement thereof;
(iii) following the distribution of a Like Amount of the
Debentures to the Holders of the Securities, provided that, the
Property Trustee has received written notice from the Sponsor directing
the Property Trustee to terminate the Trust (which direction is
optional, and except as otherwise expressly provided below, within the
discretion of the Sponsor) and provided, further, that such direction
and such distribution is conditioned on the Administrative Trustees'
receipt of an opinion of an independent tax counsel experienced in such
matters (a "No Recognition Opinion"), which opinion may rely on
published rulings of the Internal Revenue Service, to the effect that
the Holders of the Securities will not recognize any gain or loss for
United States federal income tax purposes as a result of the
dissolution of the Trust and the distribution of the Debentures;
(iv) upon the entry of a decree of judicial dissolution
of the Trust by a court of competent jurisdiction;
(v) when all of the Securities shall have been called
for redemption and the amounts necessary for redemption thereof shall
have been paid to the Holders in accordance with the terms of the
Securities; or
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(vi) the expiration of the term of the Trust provided in
Section 3.14.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a) and the completion of the winding up of the Trust
and after satisfaction of all liabilities of the Trust, the Administrative
Trustees shall file a certificate of cancellation with the Secretary of State of
the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive
the termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part,
in accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Capital Securities may only be
transferred, in whole or in part, in accordance with the terms and conditions
set forth in this Declaration. Any transfer or purported transfer of any
Security not made in accordance with this Declaration shall be null and void.
(c) Subject to Section 3.15, the Sponsor and any Related Party
may only transfer the Common Securities to the Sponsor or a Related Party after
the delivery to the Property Trustee of an Officers' Certificate certifying that
the transferee is either the Sponsor or a Related Party.
(d) The Property Trustee shall provide for the registration of
Securities and of the transfer of Securities, which will be effected without
charge but only upon payment (with such indemnity as the Property Trustee may
require) in respect of any tax or other governmental charges that may be imposed
in relation to it. Upon surrender for registration of transfer of any
Securities, the Administrative Trustees shall execute and the
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Property Trustee shall cause one or more new Securities to be issued in the name
of the designated transferee or transferees. Every Security surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Property Trustee duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Security
surrendered for registration of transfer shall be delivered to the Property
Trustee and canceled in accordance with Section 7.10. A transferee of a Security
shall be entitled to the rights and subject to the obligations of a Holder
hereunder upon the receipt by such transferee of a Security. By acceptance of a
Security, each transferee shall be deemed to have agreed to be bound by this
Declaration.
SECTION 9.2 Transfer Procedures and Restrictions.
(a) General. Except as otherwise provided in Section 9.2(b),
if Capital Securities are issued upon the registration of transfer, exchange or
replacement of Capital Securities bearing the Restricted Securities Legend set
forth in Exhibit A-1 hereto, or if a request is made to remove such Restricted
Securities Legend on Capital Securities, the Capital Securities so issued shall
bear the Restricted Securities Legend, or the Restricted Securities Legend shall
not be removed, as the case may be, unless there is delivered to the Sponsor and
the Property Trustee such satisfactory evidence, which shall include an Opinion
of Counsel licensed to practice law in the State of New York, as may be
reasonably required by the Sponsor and the Property Trustee, that neither the
legend nor the restrictions on transfer set forth therein are required to ensure
that transfers thereof are made pursuant to an exception from the registration
requirements of the Securities Act or, with respect to Restricted Securities,
that such Securities are not "restricted" within the meaning of Rule 144. Upon
provision of such satisfactory evidence, the Property Trustee, at the written
direction of the Sponsor, shall authenticate and deliver Capital Securities that
do not bear the legend.
(b) Transfers After Effectiveness of a Registration Statement.
After the effectiveness of a Registration Statement with respect to any Capital
Securities, all requirements pertaining to legends on such Capital Securities
will cease to apply, and beneficial interests in a Capital Security in global
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form without legends will be available to transferees of such Capital
Securities, upon exchange of the transferring Holder's Restricted Definitive
Capital Security or directions to transfer such Holder's beneficial interest in
the Rule 144A Global Capital Security or the Regulation S Global Capital
Security, as the case may be. No such transfer or exchange of a Restricted
Definitive Capital Security or of an interest in the Rule 144A Global Capital
Security or the Regulation S Global Capital Security shall be effective unless
the transferor delivers to the Property Trustee a certificate in a form
substantially similar to that attached hereto as the "Form of Assignment" in
Exhibit A-1. Except as otherwise provided in Section 9.2(m), after the
effectiveness of a Registration Statement, the Trust shall issue and the
Property Trustee, upon a written order of the Trust signed by one Administrative
Trustee, shall authenticate a Capital Security in global form without the
Restricted Securities Legend (the "Unrestricted Global Capital Security") to
deposit with the Clearing Agency to evidence transfers of beneficial interests
from the (i) Rule 144A Global Capital Security or the Regulation S Global
Capital Security and (ii) Restricted Definitive Capital Securities.
(c) Transfer and Exchange of Definitive Capital Securities.
When Definitive Capital Securities are presented to the Registrar or
co-Registrar:
(x) to register the transfer of such Definitive Capital
Securities, or
(y) to exchange such Definitive Capital Securities which
became mutilated, destroyed, defaced, stolen or lost, for an equal
number of Definitive Capital Securities,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Capital Securities surrendered for
registration of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Trust and
the Registrar or co-Registrar, duly executed by the Holder thereof or
his attorney duly authorized in writing; and
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(ii) in the case of Definitive Capital Securities that
are Restricted Definitive Capital Securities:
(A) if such Restricted Capital Securities are being
delivered to the Registrar by a Holder for registration in the
name of such Holder, without transfer, a certification from
such Holder to that effect; or
(B) if such Restricted Capital Securities are being
transferred: (i) a certification from the transferor in a form
substantially similar to that attached hereto as the "Form of
Assignment" in Exhibit A-1, and (ii) if the Trust or the
Registrar so requests, evidence reasonably satisfactory to
them as to the compliance with the restrictions set forth in
the Restricted Securities Legend.
(d) Restrictions on Transfer of a Definitive Capital Security
for a Beneficial Interest in a Global Capital Security. A Definitive Capital
Security may not be exchanged for a beneficial interest in a Global Capital
Security except upon satisfaction of the requirements set forth below. Upon
receipt by the Property Trustee of a Definitive Capital Security, duly endorsed
or accompanied by appropriate instruments of transfer, in form satisfactory to
the Property Trustee, together with:
(i) if such Definitive Capital Security is a Restricted
Capital Security, certification from the transferor in a form
substantially similar to that attached hereto as the "Form of
Assignment" in Exhibit A-1; provided, however, that such Definitive
Capital Security may only be exchanged for an interest in a Regulation
S Global Security where such Definitive Capital Security is being
transferred pursuant to Regulation S or Rule 144 (if available); and
(ii) whether or not such Definitive Capital Security is
a Restricted Capital Security, written instructions directing the
Property Trustee to make, or to direct the Clearing Agency to make, an
adjustment on its books and records with respect to the appropriate
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Global Capital Security to reflect an increase in the number of the
Capital Securities represented by such Global Capital Security,
then the Property Trustee shall cancel such Definitive Capital Security and
cause, or direct the Clearing Agency to cause, the aggregate number of Capital
Securities represented by the appropriate Global Capital Security to be
increased accordingly. If no Global Capital Securities are then outstanding, the
Trust shall issue and the Property Trustee shall authenticate, upon written
order of any Administrative Trustee, an appropriate number of Capital Securities
in global form.
(e) Transfer and Exchange of Global Capital Securities.
Subject to Section 9.2(f), the transfer and exchange of Global Capital
Securities or beneficial interests therein shall be effected through the
Clearing Agency, in accordance with this Declaration (including applicable
restrictions on transfer set forth herein, if any) and the procedures of the
Clearing Agency therefor.
(f) Transfer of a Beneficial Interest in a Global Capital
Security for a Definitive Capital Security.
(i) Any Person having a beneficial interest in a Global
Capital Security may upon request, but only upon 20 days prior notice
to the Property Trustee, and if accompanied by the information
specified below, exchange such beneficial interest for a Definitive
Capital Security representing the same number of Capital Securities.
Upon receipt by the Property Trustee from the Clearing Agency or its
nominee on behalf of any Person having a beneficial interest in a
Global Capital Security of written instructions or such other form of
instructions as is customary for the Clearing Agency or the Person
designated by the Clearing Agency as having such a beneficial interest
in a Restricted Capital Security and a certification from the
transferor (in a form substantially similar to that attached hereto as
the "Form of Assignment" in Exhibit A-1), which may be submitted by
facsimile, then the Property Trustee will cause the aggregate number of
Capital Securities represented by Global Capital Securities to be
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reduced on its books and records and, following such reduction, the
Trust will execute and the Property Trustee will authenticate and make
available for delivery to the transferee a Definitive Capital Security;
(ii) Definitive Capital Securities issued in exchange
for a beneficial interest in a Global Capital Security pursuant to this
Section 9.2(f) shall be registered in such names and in such authorized
denominations as the Clearing Agency, pursuant to instructions from its
Participants or indirect participants or otherwise, shall instruct the
Property Trustee in writing. The Property Trustee shall deliver such
Capital Securities to the Persons in whose names such Capital
Securities are so registered in accordance with such instructions of
the Clearing Agency.
(g) Restrictions on Transfer and Exchange of Global Capital
Securities. Notwithstanding any other provisions of this Declaration (other than
the provisions set forth in subsection (h) of this Section 9.2), a Global
Capital Security may not be transferred as a whole except by the Clearing Agency
to a nominee of the Clearing Agency or another nominee of the Clearing Agency or
by the Clearing Agency or any such nominee to a successor Clearing Agency or a
nominee of such successor Clearing Agency.
Prior to the expiration of the restricted period, as
contemplated by Regulation S, beneficial interests in the Regulation S Global
Capital Security may be exchanged for beneficial interests in the Rule 144A
Global Capital Security only if such exchange occurs in connection with a
transfer of the Capital Securities pursuant to Rule 144A and the transferor
first delivers to the Property Trustee a written certificate (in a form
substantially similar to that attached hereto as the "Form of Assignment" in
Exhibit A-1) to the effect that the Capital Securities are being transferred to
a person who the transferor reasonably believes is a QIB, purchasing for its own
account or the account of a QIB in a transaction meeting the requirements of
Rule 144A and in accordance with all applicable securities laws of the states of
the United States and other jurisdictions.
Beneficial interests in the Rule 144A Global Capital Security
may be transferred to a person who takes delivery in the form of an interest in
the Regulation S Global Capital Security, whether before or after the expiration
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of such restricted period, as contemplated by Regulation S, only if the
transferor first delivers to the Property Trustee a written certificate (in a
form substantially similar to that attached hereto as the "Form of Assignments"
in Exhibit A-1) to the effect that such transfer is being made in accordance
with Rule 903 or 904 of Regulation S or Rule 144 (if available) and that, if
such transfer occurs prior to the expiration of such restricted period, the
interest transferred will be held immediately thereafter through Euroclear or
CEDEL.
(h) Authentication of Definitive Capital Securities. If at any
time Global Capital Securities are outstanding:
(i) there occurs a Default or an Event of Default which
is continuing, or
(ii) the Trust, in its sole discretion, notifies the
Property Trustee in writing that it elects to cause the issuance of
Definitive Capital Securities under this Declaration,
then the Trust will execute, and the Property Trustee, upon receipt of a written
order of the Trust signed by one Administrative Trustee requesting the
authentication and delivery of Definitive Capital Securities to the Persons
designated by the Trust, will authenticate and make available for delivery
Definitive Capital Securities, equal in number to the number of Capital
Securities represented by the Global Capital Securities, in exchange for such
Global Capital Securities.
(i) Legend.
(i) Except as permitted by the following paragraph
(ii), each Capital Security certificate evidencing the Global Capital
Securities and the Definitive Capital Securities (and all Capital
Securities issued in exchange therefor or substitution thereof) shall
bear a legend (the "Restricted Securities Legend") in substantially the
following form:
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THE CAPITAL SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAW. NEITHER THIS CAPITAL SECURITY NOR
ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH
REGISTRATION.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS CAPITAL
SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
CAPITAL SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL SECURITY)
ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) SO LONG AS THIS CAPITAL SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS
AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES
ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501
UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS CAPITAL
SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND
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NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH,
ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF
THE TRUST AND THE COMPANY PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER (i) PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND (ii) PURSUANT TO
CLAUSE (E), TO REQUIRE THAT THE TRANSFEROR DELIVER TO THE TRUST
A LETTER FROM THE TRANSFEREE SUBSTANTIALLY IN THE FORM OF ANNEX
A TO THE OFFERING MEMORANDUM DATED JANUARY 8, 1997. SUCH HOLDER
FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
CAPITAL SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF
ALSO AGREES, REPRESENTS AND WARRANTS THAT IT (A) IS NOT ITSELF,
AND IS NOT ACQUIRING CAPITAL SECURITIES WITH "PLAN ASSETS" OF,
AN EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE") (EACH, A "PLAN"), OR AN ENTITY
WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY
PLAN'S INVESTMENT IN THE ENTITY (A "PLAN ASSET ENTITY"), OR (B)
IS ACQUIRING AND HOLDING THE CAPITAL SECURITIES IN A
TRANSACTION THAT IS NOT OTHERWISE PROHIBITED BY EITHER ERISA OR
THE CODE.
and in the case of the Regulation S Global Capital Security the following
additional legend:
THIS CAPITAL SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
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STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
UNLESS REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS
AVAILABLE.
(ii) Upon any sale or transfer of a Restricted Capital
Security (including any Restricted Capital Security represented by a
Global Capital Security) pursuant to an effective registration
statement under the Securities Act or pursuant to Rule 144 under the
Securities Act after such registration statement ceases to be
effective:
(A) in the case of any Restricted Capital Security
that is a Definitive Capital Security, the Registrar shall
permit the Holder thereof to exchange such Restricted Capital
Security for a Definitive Capital Security that does not bear
the Restricted Securities Legend and rescind any restriction
on the transfer of such Restricted Capital Security; and
(B) in the case of any Restricted Capital Security
that is represented by a Global Capital Security, the
Registrar shall permit the Holder of such Global Capital
Security to exchange such Global Capital Security for another
Global Capital Security that does not bear the Restricted
Securities Legend.
(j) Cancellation or Adjustment of Global Capital Security. At
such time as all beneficial interests in a Global Capital Security have either
been exchanged for Definitive Capital Securities to the extent permitted by this
Declaration or redeemed, repurchased or canceled in accordance with the terms of
this Declaration, such Global Capital Security shall be canceled by the Property
Trustee. At any time prior to such cancellation, if any beneficial interest in a
Global Capital Security is exchanged for Definitive Capital Securities, Capital
Securities represented by such Global Capital Security shall be reduced and an
adjustment shall be made on the books and records of the Property Trustee (if it
is then the custodian for such Global Capital Security) with respect to such
Global Capital Security, by the Property Trustee or the Securities custodian, to
reflect such reduction.
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(k) Obligations with Respect to Transfers and Ex- changes of
Capital Securities.
(i) To permit registrations of transfers and exchanges,
the Trust shall execute and the Property Trustee shall authenticate
Definitive Capital Securities and Global Capital Securities at the
Registrar's or co-Registrar's request in accordance with the terms of
this Declaration.
(ii) Registrations of transfers or exchanges will be
effected without charge, but only upon payment (with such indemnity as
the Trust, the Property Trustee or the Sponsor may require) in respect
of any tax or other governmental charge that may be imposed in relation
to it.
(iii) The Registrar or co-registrar shall not be required
to register the transfer of or exchange (a) Capital Securities during a
period beginning at the opening of business 15 days before the day of
mailing of a notice of redemption or any notice of selection of Capital
Securities for redemption and ending at the close of business on the
day of such mailing; or (b) any Capital Security so selected for
redemption in whole or in part, except the unredeemed portion of any
Capital Security being redeemed in part.
(iv) Prior to the due presentation for registrations of
transfer of any Capital Security, the Trust, the Property Trustee, the
Paying Agent, the Registrar or any co-registrar may deem and treat the
Person in whose name a Capital Security is registered as the absolute
owner of such Capital Security for the purpose of receiving
Distributions on such Capital Security and for all other purposes
whatsoever, and none of the Trust, the Property Trustee, the Paying
Agent, the Registrar or any co-registrar shall be affected by notice to
the contrary.
(v) All Capital Securities issued upon any registration
of transfer or exchange pursuant to the terms of this Declaration shall
evidence the same security and shall be entitled to the same benefits
under this Declaration as the Capital Securities surrendered upon such
registration of transfer or exchange.
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(l) No Obligation of the Property Trustee.
(i) The Property Trustee shall have no responsibility
or obligation to any beneficial owner of a Global Capital Security, a
Participant in the Clearing Agency or other Person with respect to the
accuracy of the records of the Clearing Agency or its nominee or of any
Participant thereof, with respect to any ownership interest in the
Capital Securities or with respect to the delivery to any Participant,
beneficial owner or other Person (other than the Clearing Agency) of
any notice (including any notice of redemption) or the payment of any
amount, under or with respect to such Capital Securities. All notices
and communications to be given to the Holders and all payments to be
made to Holders under the Capital Securities shall be given or made
only to or upon the order of the registered Holders (which shall be the
Clearing Agency or its nominee in the case of a Global Capital
Security). The rights of beneficial owners in any Global Capital
Security shall be exercised only through the Clearing Agency subject to
the applicable rules and procedures of the Clearing Agency. The
Property Trustee may conclusively rely and shall be fully protected in
relying upon information furnished by the Clearing Agency or any agent
thereof with respect to its Participants and any beneficial owners.
(ii) The Property Trustee and Registrar shall have no
obligation or duty to monitor, determine or inquire as to compliance
with any restrictions on transfer imposed under this Declaration or
under applicable law with respect to any transfer of any interest in
any Capital Security (including any transfers between or among Clearing
Agency Participants or beneficial owners in any Global Capital
Security) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if
and when expressly required by, the terms of this Declaration, and to
examine the same to determine substantial compliance as to form with
the express requirements hereof.
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(m) Exchange of Series A Capital Securities for Series B
Capital Securities. The Series A Capital Securities may be exchanged for Series
B Capital Securities pursuant to the terms of the Exchange Offer. The Property
Trustee shall make the exchange as follows:
The Sponsor shall present the Property Trustee with an
Officers' Certificate certifying the following:
(A) upon issuance of the Series B Capital Securities,
the transactions contemplated by the Exchange Offer have been
consummated; and
(B) the number of Series A Capital Securities
properly tendered in the Exchange Offer that are represented
by a Global Capital Security and the number of Series A
Capital Securities properly tendered in the Exchange Offer
that are represented by Definitive Capital Securities, the
name of each Holder of such Definitive Capital Securities, the
liquidation amount of Capital Securities properly tendered in
the Exchange Offer by each such Holder and the name and
address to which Definitive Capital Securities for Series B
Capital Securities shall be registered and sent for each such
Holder.
The Property Trustee, upon receipt of (i) such Officers'
Certificate, (ii) an Opinion of Counsel (x) to the effect that the Series B
Capital Securities have been registered under Section 5 of the Securities Act
and the Indenture has been qualified under the Trust Indenture Act and (y) with
respect to the matters set forth in Section 3(p) of the Registration Rights
Agreement and (iii) a Company Order, shall authenticate (A) a Global Capital
Security for Series B Capital Securities in aggregate liquidation amount equal
to the aggregate liquidation amount of Series A Capital Securities represented
by a Global Capital Security indicated in such Officers' Certificate as having
been properly tendered and (B) Definitive Capital Securities representing Series
B Capital Securities registered in the names of, and in the liquidation amounts
indicated in such Officers' Certificate.
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If, upon consummation of the Exchange Offer, less than all the
outstanding Series A Capital Securities shall have been properly tendered and
not withdrawn, the Property Trustee shall make an endorsement on the Global
Capital Security for Series A Capital Securities indicating the reduction in the
number and aggregate liquidation amount represented thereby as a result of the
Exchange Offer.
The Trust shall deliver such Definitive Capital Securities for
Series B Capital Securities to the Holders thereof as indicated in such
Officers' Certificate.
(n) Minimum Transfers. Series A Capital Securities may only be
transferred in minimum blocks of $100,000 aggregate Liquidation Amount until
such Series A Capital Securities are registered pursuant to an effective
registration statement filed under the Securities Act or "unrestricted" pursuant
to Rule 144 under the Securities Act.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Security
shall be registered on the books and records of the Trust as the sole owner of
such Security for purposes of receiving Distributions and for all other purposes
whatsoever and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such Security on the part of any Person, whether
or not the Trustees shall have actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
Global Capital Securities shall initially be registered on the
books and records of the Trust in the name of Cede & Co., the nominee of the
Clearing Agency, and no Capital Security Beneficial Owner will receive a
definitive capital security certificate (a "Capital Security Certificate")
representing such Capital Security Beneficial Owner's interests in such Global
Capital Securities, except as provided in Section 9.2. Unless and until
definitive, fully registered Capital Securities certificates have been issued to
the Capital Security Beneficial Owners pursuant to Section 9.2:
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(a) the provisions of this Section 9.4 shall be in full force
and effect;
(b) the Trust and the Trustees shall be entitled to deal with
the Clearing Agency for all purposes of this Declaration (including the payment
of Distributions on the Global Capital Securities and receiving approvals, votes
or consents hereunder) as the Holder of the Capital Securities and the sole
holder of the Global Certificates and shall have no obligation to the Capital
Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4
conflict with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the Capital Security Beneficial Owners shall
be exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Capital Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants and
receive and transmit payments of Distributions on the Global Certificates to
such Clearing Agency Participants. DTC will make book entry transfers among the
Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Capital
Security Holders is required under this Declaration, the Trustees shall give all
such notices and communications specified herein to be given to the Holders of
Global Capital Security to the Clearing Agency, and shall have no notice
obligations to the Capital Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Capital Securities, the Administrative
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to such Capital Securities.
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ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the
Securities Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of
the capital contributions (or any return thereon) of the Holders of the
Securities which shall be made solely from assets of the Trust; and
(ii) be required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust or otherwise.
(b) The Sponsor shall be liable for all of the fees, expenses,
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 ss. 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 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's gross negligence or
willful misconduct with respect to such acts or omissions.
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(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and liabilities relating thereto
to the Trust or to any other Covered Person, an Indemnified Person acting under
this Declaration shall not be liable to the Trust or to any other Covered Person
for its good faith reliance on the provisions of this Declaration. The
provisions of this Declaration, to the extent that they restrict the duties and
liabilities of an Indemnified Person otherwise existing at law or in equity
(other than the duties imposed on the 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 Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any Holder of Securities,
each Covered Person or 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
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such interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to consider such
interests and factors as it desires, including its own interests, and
shall have no duty or obligation to give any consideration to any
interest of or factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such express standard
and shall not be subject to any other or different standard imposed by
this Declaration or by applicable law.
SECTION 10.4 Indemnification.
(a) (i) The Sponsor shall indemnify, to the full
extent permitted by law, any Company Indemnified Person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the Trust) by reason of the fact that he is or was a Company
Indemnified Person against expenses (including attorneys' fees and
expenses), 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,
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conviction, or upon a plea of nolo contendere or its equivalent, shall
not, of itself, create a presumption that the Company Indemnified
Person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Trust,
and with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Trust to procure a
judgment in its favor by reason of the fact that he is or was a Company
Indemnified Person against expenses (including attorneys' fees and
expenses) actually and reasonably incurred by him in connection with
the defense or settlement of such action or suit if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Trust and except that no such indemnification
shall be made in respect of any claim, issue or matter as to which such
Company Indemnified Person shall have been adjudged to be liable to the
Trust unless and only to the extent that the Court of Chancery of
Delaware or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, such Person is fairly
and reasonably entitled to indemnity for such expenses which such Court
of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person
shall be successful on the merits or otherwise (including dismissal of
an action without prejudice or the settlement of an action without
admission of liability) in defense of any action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 10.4(a), or in
defense of any claim, issue or matter therein, he shall be indemnified,
to the full extent permitted by law, against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
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(iv) Any indemnification under paragraphs (i) and (ii)
of this Section 10.4(a) (unless ordered by a court) shall be made by
the Sponsor only as authorized in the specific case upon a
determination that indemnification of the Company Indemnified Person is
proper in the circumstances because he has met the applicable standard
of conduct set forth in paragraphs (i) 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 quorum of disinterested
Administrative Trustees so directs, by independent legal counsel in a
written opinion, or (3) by the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees and expenses)
incurred by a Company Indemnified Person in defending a civil,
criminal, administrative or investigative action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 10.4(a) shall be
paid by the Sponsor in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf of
such Company Indemnified Person to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by
the Sponsor as authorized in this Section 10.4(a). Notwithstanding the
foregoing, no advance shall be made by the Sponsor 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 Company Indemnified Person acted
in bad faith or in a manner that such Person did not believe to be in
or not opposed to the best interests of the Trust, or, with respect to
any criminal proceeding, that such Company Indemnified Person believed
or had reasonable cause to believe his conduct was unlawful. In no
event shall any advance be made in instances where the 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.
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(vi) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other paragraphs of this
Section 10.4(a) shall not be deemed exclusive of any other rights to
which those seeking indemnification and advancement of expenses may be
entitled under any agreement, vote of stockholders or disinterested
directors of the Sponsor 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 10.4(a) shall be deemed to be
provided by a contract between the Sponsor and each Company Indemnified
Person who serves in such capacity at any time while this Section
10.4(a) is in effect. Any repeal or modification of this Section
10.4(a) shall not affect any rights or obligations then existing.
(vii) The Sponsor or the Trust may purchase and maintain
insurance on behalf of any Person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or
not the Sponsor would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to
"the Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any Person
who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 10.4(a) with respect to the resulting or
surviving entity as he would have with respect to such constituent
entity if its separate existence had continued.
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(ix) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 10.4(a) shall, unless
otherwise provided when authorized or ratified, continue as to a Person
who has ceased to be a Company Indemnified Person and shall inure to
the benefit of the heirs, executors and administrators of such a
Person.
(b) The Sponsor 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 and all loss, liability,
damage, claim or expense including taxes (other than taxes based on the income
of such Fiduciary Indemnified Person) incurred without negligence or bad faith
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 10.4(b) shall survive the resignation or
removal of the Property Trustee or the Delaware Trustee and the satisfaction and
discharge of this Declaration.
(c) The Sponsor agrees to pay the Property Trustee and the
Delaware Trustee, from time to time, such compensation for all services rendered
by the Property Trustee and the Delaware Trustee hereunder as may be mutually
agreed upon in writing by the Sponsor and the Property Trustee or the Delaware
Trustee, as the case may be, and, except as otherwise expressly provided herein,
to reimburse the Property Trustee and the Delaware Trustee upon its or their
request for all reasonable expenses, disbursements and advances incurred or made
by the Property Trustee or the Delaware Trustee, as the case may be, in
accordance with the provisions of this Declaration, except any such expense,
disbursement or advance as may be attributable to its or their negligence or bad
faith.
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SECTION 10.5 Outside Businesses.
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 business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the 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.
ARTICLE XI
ACCOUNTING
SECTION 11.1 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 11.2 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
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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, any annual United
States federal income tax information statement, required by the Code,
containing such information with regard to the Securities held by each Holder as
is required by the Code and the Treasury Regulations. Notwithstanding any right
under the Code to deliver any such statement at a later date, the Administrative
Trustees shall endeavor to deliver all such information 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 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; provided, however, that all payments of
funds in respect of the Debentures held by the Property Trustee shall be made
directly to the Property Trustee Account and no other funds of the Trust shall
be deposited in the Property Trustee 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
Trustee Account.
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SECTION 11.4 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 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 XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by:
(i) the Administrative Trustees (or if there are more
than two Administrative Trustees a majority of the Administrative
Trustees);
(ii) if the amendment affects the rights, powers,
duties, obligations or immunities of the Property Trustee, the Property
Trustee; and
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(iii) if the amendment affects the rights, powers,
duties, obligations or immunities of the Delaware Trustee, the Delaware
Trustee.
(b) No amendment shall be made, and any such purported
amendment shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Property Trustee shall have first received an Officers' Certificate
from each of the Trust and the Sponsor that such amendment is permitted
by, and conforms to, the terms of this Declaration (including the terms
of the Securities);
(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or immunities of the
Property Trustee, 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 Declaration (including the
terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Trust) that (x) such amendment is permitted by,
and conforms to, the terms of this Declaration (including the
terms of the Securities) and (y) all conditions precedent to
the execution and delivery of such amendment have been
satisfied,
provided, however, that the Property Trustee shall not be required to
sign any such amendment, and
(iii) to the extent the result of such amendment would be
to:
(A) cause the Trust to fail to continue to be
classified for purposes of United States federal income
taxation as a grantor trust;
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(B) reduce or otherwise adversely affect the powers
of the Property Trustee in contravention of the Trust
Indenture Act; or
(C) cause the Trust to be deemed to be an Investment
Company required to be registered under the Investment Company
Act;
(c) At such time after the Trust has issued any Securities
that remain outstanding, any amendment that would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only with
such additional requirements as may be set forth in the terms of such
Securities;
(d) Section 10.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in Liquidation Amount of the Common Securities;
(f) The rights of the Holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove Trustees
shall not be amended without the consent of the Holders of a Majority in
Liquidation Amount of the Common Securities; and
(g) Notwithstanding Section 12.1(c), this Declaration may be
amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity, correct or supplement any
provision in this Declaration that may be inconsistent with any other
provision of this Declaration or to make any other provisions with
respect to matters or questions arising under this Declaration which
shall not be inconsistent with the other provisions of the Declaration;
and
(ii) to modify, eliminate or add to any provisions of
the Declaration to such extent as shall be necessary to ensure that the
Trust will be classified for United States federal income tax purposes
as a grantor trust at all times that any Securities are outstanding or
to ensure that the Trust will not be required to register as an
Investment Company under the Investment Company Act;
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provided, however, that in the case of clause (i), such action shall not
adversely affect in any material respect the interests of the Holders of the
Securities, and any amendments of this Declaration shall become effective when
notice thereof is given to the Holders of the Securities.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Securities may be
called at any time by the 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 Declaration, 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 notices in a writing stating that the signing Holders of Securities wish to
call a meeting and indicating the general or specific purpose for which the
meeting is to be called. Any Holders of Securities calling a meeting shall
specify in writing the Security Certificates held by the Holders of Securities
exercising the right to call a meeting and only those Securities specified shall
be counted for purposes of determining whether the required percentage set forth
in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of
the Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all
the Holders of Securities having a right to vote thereat at least 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 Declaration or the rules of any stock
84
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 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
Holder for the 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 it. Except as otherwise provided herein,
all matters relating to the giving, voting or validity of proxies shall
be governed by the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations thereunder, as if the
Trust were a Delaware corporation and the Holders of the Securities
were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities
shall be conducted by the Administrative Trustees or by such other
Person that the Administrative Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration,
the terms of the Securities, the Trust Indenture Act or the listing
rules of any stock exchange on which the Capital Securities are then
85
listed or 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 XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of 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 Declaration,
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 New York banking corporation
with trust powers and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Declaration;
(b) The execution, delivery and performance by the Property
Trustee of this Declaration has been duly authorized by all necessary corporate
action on the part of the Property Trustee. This Declaration has been duly
executed and delivered by the Property Trustee and 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);
86
(c) The execution, delivery and performance of this
Declaration by the Property Trustee does not conflict with or constitute a
breach of the charter or by-laws of the Property Trustee; and
(d) No consent, approval or authorization of, or registration
with or notice to, any New York State or federal banking authority is required
for the execution, delivery or performance by the Property Trustee of this
Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
with trust power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Declaration;
(b) The execution, delivery and performance by the Delaware
Trustee of this Declaration has been duly authorized by all necessary corporate
action on the part of the Delaware Trustee and does not conflict with or
constitute a breach of the charter or by-laws of the Delaware Trustee. This
Declaration has been duly executed and delivered by the Delaware Trustee and
constitutes a legal, valid and binding obligation of the Delaware Trustee,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of equity and
the discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law);
(c) No consent, approval or authorization of, or registration
with or notice to, any federal or Delaware banking
87
authority is required for the execution, delivery or performance by the Delaware
Trustee of this Declaration; and
(d) The Delaware Trustee is a natural person who is a resident
of the State of Delaware or, if not a natural person, an entity which has its
principal place of business in the State of Delaware.
ARTICLE XIV
REGISTRATION RIGHTS
SECTION 14.1 Registration Rights Agreement; Liquidated Damages.
The Holders of the Capital Securities, the Debentures and the
Capital Securities Guarantee (collectively, the "Registrable Securities") are
entitled to the benefits of a Registration Rights Agreement. Pursuant to the
Registration Rights Agreement, the Sponsor and the Trust have agreed for the
benefit of the Holders of Registrable Securities that (i) they will, at the
Sponsor's cost, within 150 days after January 8, 1997 (the "Issue Date"), use
their reasonable best efforts to file a registration statement (the "Exchange
Registration Statement") relating an Exchange Offer pursuant to which each
issuer of such respective Registrable Securities would issue amounts of such
Registrable Securities as are accepted in the Exchange Offer which shall be
identical in all respects to those exchanged, except they will have been
registered under the Securities Act and will no longer be subject to transfer
restrictions under the Securities Act or the $100,000 minimum aggregate
principal or Liquidation Amount transfer restriction and, if required pursuant
to the terms of the Registration Rights Agreement, file a shelf registration
statement (the "Shelf Registration Statement") with the Commission with respect
to resales of the Registrable Securities, (ii) they will use their reasonable
best efforts to cause such Exchange Registration Statement and/or Shelf
Registration Statement, as the case requires, to be declared effective by the
Commission within 180 days after the Issue Date and (iii) they will use their
reasonable best efforts to maintain the Shelf Registration Statement, if any,
continuously effective under the Securities Act until the third anniversary of
the effectiveness of the Shelf Registration Statement or such earlier date as is
provided in the Registration Rights Agreement (the "Effectiveness Period"). All
88
references herein to such Registrable Securities shall be deemed to include, as
the context may require, the Registrable Securities into which such Securities
have been exchanged pursuant to the Exchange Offer ("Exchange Securities") and
all reference to numbers or amounts of such Securities shall be deemed to
include, as the context may require, such Exchanged Securities. Capitalized
terms used in this Article XIV but not otherwise defined herein shall have the
meanings ascribed to such terms in the Registration Rights Agreement.
If (i) (A) neither the Exchange Offer Registration Statement
nor a Shelf Registration Statement is filed with the Commission on or
prior to the 150th day after the Issue Date or (B) notwithstanding that
the Debenture Issuer and the Trust have consummated or will consummate
an Exchange Offer, the Debenture Issuer and the Trust are required to
file a Shelf Registration Statement and such Shelf Registration
Statement is not filed on or prior to date required by the Registration
Rights Agreement, then commencing on the day after the applicable
required filing date, additional Distributions shall accumulate on the
Liquidation Amount of the Capital Securities at a rate of 0.25% per
annum; or
(ii) (A) neither the Exchange Offer Registration
Statement nor a Shelf Registration Statement is declared effective by
the Commission on or prior to the 30th day after the applicable
required filing date or (B) notwithstanding that the Debenture Issuer
and the Trust have consummated or will consummate an Exchange Offer,
the Debenture Issuer and the Trust are required to file a Shelf
Registration Statement and such Shelf Registration Statement is not
declared effective by the Commission on or prior to the 30th day after
the date such Shelf Registration Statement was required to be filed,
then, commencing on the 31st day after the applicable required filing
date, additional Distributions shall accumulate on the Liquidation
Amount of the Capital Securities at a rate of 0.25% per annum; or
(iii) (A) the Trust has not exchanged Series B Capital
Securities for all Capital Securities or the Debenture Issuer or the
Guarantor has not exchanged the Series B Guarantees or the Series B
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Debentures for all Series A Capital Securities Guarantees or Series A
Debentures validly tendered, in accordance with the terms of the
Exchange Offer on or prior to the 30th day after the date on which the
Exchange Offer Registration Statement was declared effective or (B) if
applicable, the Shelf Registration Statement has been declared
effective and such Shelf Registration Statement ceases to be effective
at any time prior to the expiration of the Rule 144(k) Period (other
than after such time as all Capital Securities have been disposed of
thereunder or otherwise cease to be Registrable Securities), additional
Distributions shall accumulate on the Liquidation Amount of the Capital
Securities at a rate of 0.25% per annum commencing on (x) the 31st day
after such effective date, in the case of (A) above, or (y) the day
such Shelf Registration Statement ceases to be effective in the case of
(B) above;
provided, however, that the additional Distributions rate on the liquidation
amount of the Capital Securities may not exceed in the aggregate 0.25% per
annum; provided, further, however, that (1) upon the filing of the Exchange
Offer Registration Statement or a Shelf Registration Statement (in the case of
clause (i) above), (2) upon the effectiveness of the Exchange Offer Registration
Statement or a Shelf Registration Statement (in the case of clause (ii) above),
or (3) upon the exchange of Exchange Capital Securities, Exchange Guarantees and
Exchange Subordinated Debentures for all Capital Securities, Guarantees and
Subordinated Debentures tendered (in the case of clause (iii)(A) above), or upon
the effectiveness of the Shelf Registration Statement which had ceased to remain
effective (in the case of clause (iii)(B) above), additional Distributions on
the Liquidation Amount of the Capital Securities as a result of such clause (or
the relevant subclause thereof), as the case may be, shall cease to accumulate.
Any amounts of additional Distributions due pursuant to
clauses (i), (ii) or (iii) above will be payable in cash on January 1 and July 1
of each year to the Holders of record at the close of business on the fifteenth
day prior to the relevant Distribution date.
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ARTICLE XV
MISCELLANEOUS
SECTION 15.1 Notices.
All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Administrative
Trustees at the Trust's mailing address set forth below (or such other address
as the Trust may give notice of to the Holders of the Securities):
Markel Capital Trust I
c/o Markel Corporation
4551 Cox Road
Glen Allen, Virginia 23060-3382
Attention: Corporate Counsel
Telecopy: (804) 527-3810
(b) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as Delaware Trustee may give notice of to
the Holders of the Securities):
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19001
Attention: Corporate Trust Department
Telecopy: (302) 428-3390
(c) if given to the Property Trustee, at the Property
Trustee's mailing address set forth below (or such other address as the Property
Trustee may give notice of to the Holders of the Securities):
The Chase Manhattan Bank
450 West 33rd Street
New York, NY 10001
Attention: Corporate Trustee Administration
Telecopy: (212) 946-8160
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(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust):
Markel Corporation
4551 Cox Road
Glen Allen, Virginia 23060-3382
Attention: Corporate Counsel
Telecopy: (804) 527-3810
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 15.2 Governing Law.
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 15.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes
as a grantor trust. The provisions of this Declaration shall be
interpreted to further this intention of the parties.
SECTION 15.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
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SECTION 15.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether or not so expressed.
SECTION 15.6 Partial Enforceability.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to Persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 15.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year first above written.
/s/ STEVEN A. MARKEL
------------------------------------
Steven A. Markel, solely in his
capacity as Administrative Trustee
/s/ ANTHONY F. MARKEL
------------------------------------
Anthony F. Markel, solely in his
capacity as Administrative Trustee
/s/ DARRELL D. MARTIN
------------------------------------
Darrell D. Martin, solely in his
capacity as Administrative Trustee
CHASE MANHATTAN BANK DELAWARE,
solely in its capacity as Delaware
Trustee
By: /s/ JOHN J. CASHIN
------------------------------------
Name: John J. Cashin
Title: Senior Trust Officer
THE CHASE MANHATTAN BANK,
solely in its capacity as Property
Trustee
By: /s/ C. J. HEINZELMANN
------------------------------------
Name: C. J. HEINZELMANN
Title: VICE PRESIDENT
MARKEL CORPORATION
as Sponsor
By: /s/ DARRELL D. MARTIN
------------------------------------
Name: Darrell D. Martin
Title: EVP/CFO
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ANNEX I
TERMS OF
8.71% SERIES A/SERIES B CAPITAL SECURITIES
8.71% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of January 13, 1997 (as amended from time to
time, the "Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Capital Securities and the
Common Securities (collectively, the "Securities") are set out below (each
capitalized term used but not defined herein has the meaning set forth in the
Declaration or, if not defined in such Declaration, as defined in the Offering
Memorandum referred to below in Section 2(c) of this Annex I):
1. Designation and Number.
(a) Capital Securities. 150,000 Series A Capital Securities of
the Trust and 150,000 Series B Capital Securities of the Trust, each series with
an aggregate liquidation amount with respect to the assets of the Trust of One
Hundred Fifty Million dollars ($150,000,000) and each with a liquidation amount
with respect to the assets of the Trust of $1,000 per security, are hereby
designated for the purposes of identification only as "8.71% Series A Capital
Securities" and "8.71% Series B Capital Securities", respectively (collectively,
the "Capital Securities"). The certificates evidencing the Capital Securities
shall be substantially in the form of Exhibit A-1 to the Declaration, 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 or quotation system on which the Capital Securities are listed or
quoted.
(b) Common Securities. 4,640 Common Securities of the Trust
with an aggregate liquidation amount with respect to the assets of the Trust of
Four Million Six Hundred Forty Thousand dollars ($4,640,000) and a liquidation
amount with respect to the assets of the Trust of $1,000 per security, are
hereby designated for the purposes of identification only as "8.71% Common
Securities" (the "Common Securities"). The certificates
I-1
evidencing the Common Securities shall be substantially in the form of Exhibit
A-2 to the Declaration, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a
rate per annum of 8.71% (the "Coupon Rate") of the liquidation amount of $1,000
per Security (the "Liquidation Amount"), such rate being the rate of interest
payable on the Debentures to be held by the Property Trustee. Distributions in
arrears for more than one semi-annual period will bear additional distributions
thereon compounded semi-annually at the Coupon Rate (to the extent permitted by
applicable law). Pursuant to the Registration Rights Agreement, in certain
limited circumstances the Debenture Issuer will be required to pay Liquidated
Damages (as defined in the Registration Rights Agreement) with respect to the
Debentures. The term "Distributions", as used herein, includes distributions of
any such interest and Liquidated Damages payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds on hand legally available therefor.
(b) Distributions on the Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or,
if no Distributions have been paid, from January 13, 1997, and will be payable
semi-annually in arrears on January 1 and July 1 of each year, commencing on
July 1, 1997, except as otherwise described below. The amount of Distributions
payable for any period will be computed on the basis of a 360-day year
consisting of twelve 30-day months and for any period less than a full calendar
month on the basis of the actual number of days elapsed in such month. 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 shall be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay), with the same force and effect as if made on such
date (each date on which Distributions are payable in accordance with the
foregoing, a "Distribution Date"). As long as no Event of Default has occurred
and is continuing under the Indenture,
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the Debenture Issuer has the right under the Indenture to defer payments of
interest by extending the interest payment period at any time and from time to
time on the Debentures for a period not exceeding 10 consecutive semi-annual
periods, including the first such semi-annual period during such period (each an
"Extension Period"), provided that no Extension Period shall extend beyond the
Maturity Date of the Debentures. Upon any such election, distributions will be
deferred during such Extension Period. Notwithstanding such deferral,
Distributions to which Holders of Securities are entitled shall continue to
accumulate with additional Distributions thereon (to the extent permitted by
applicable law but not at a rate greater than the rate at which interest is then
accruing on the Debentures) at the Coupon Rate compounded semi-annually from the
relevant Distribution Date, during any such Extension Period. Prior to the
expiration of any such Extension Period, the Debenture Issuer may further defer
payments of interest by further extending such Extension Period; provided that
such Extension Period, together with all such previous and further extensions
within such Extension Period, may not exceed 10 consecutive semi-annual periods,
including the first semi-annual period during such Extension Period, or extend
beyond the Maturity Date of the Debentures. Upon the expiration of any Extension
Period and the payment of all amounts then due, the Debenture Issuer may
commence a new Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the
Holders thereof as they appear on the books and records of the Trust at the
close of business on the date fifteen days prior to the relevant Distribution
Date, which Distribution Dates correspond to the interest payment dates on the
Debentures. Subject to any applicable laws and regulations and the provisions of
the Declaration, each such payment in respect of the Capital Securities will be
made as follows: (i) if the Capital Securities are held in global form by a
Clearing Agency (or its nominee), in accordance with the procedures of the
Clearing Agency; and (ii) if the Capital Securities are held in definitive form
by check mailed to the address of the Holder thereof as reflected in the records
of the Registrar unless otherwise agreed by the Trust. The relevant record dates
for the Common Securities shall be the same as the record dates for the Capital
Securities. Distributions payable on any Securities that are not punctually paid
on any Distribution Date, as a result of the Debenture
I-3
Issuer having failed to make a payment under the Debentures, will cease to be
payable to the Holder on the relevant record date, and such defaulted
Distribution will instead be payable to the Person in whose name such Securities
are registered on the special record date or other specified date determined in
accordance with the Indenture.
(d) In the event that there is any money or other property
held by or for the Trust that is not accounted for hereunder, such property
shall be distributed Pro Rata (as defined herein) pursuant to Section 8 among
the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any termination of the Trust or the Sponsor
otherwise gives notice of its election to liquidate the Trust pursuant to
Section 8.1(a)(iii) of the Declaration, the Trust shall be liquidated by the
Administrative Trustees as expeditiously as the Administrative Trustees
determine to be possible by distributing, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, to the Holders of the
Securities a Like Amount (as defined below) of the Debentures, unless such
distribution is determined by the Property Trustee not to be practicable, in
which event such Holders will be entitled to receive out of the assets of the
Trust legally available for distribution to Holders, after
satisfaction of liabilities to creditors of the Trust as provided by applicable
law, an amount equal to the aggregate of the Liquidation Amount of $1,000 per
Security plus accumulated and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution").
"Like Amount" means (i) with respect to a redemption of the
Securities, Securities having a Liquidation Amount equal to the principal amount
of Debentures to be paid in accordance with their terms and (ii) with respect to
a distribution of Debentures upon the liquidation of the Trust, Debentures
having a principal amount equal to the Liquidation Amount of the Securities of
the Holder to whom such Debentures are distributed.
If, upon any such liquidation, the Liquidation Distribution
can be paid only in part because the Trust has
I-4
insufficient assets on hand legally 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 as set forth in Section 8.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures on the Maturity Date
(as defined in the Indenture, which includes any advancement of the Maturity
Date pursuant to Section 14.06 of the Indenture) thereof or prepayment thereof
(in whole or in part) prior thereto in accordance with the terms thereof, the
proceeds from such repayment or prepayment shall be simultaneously applied by
the Property Trustee (subject to the Property Trustee having received notice no
later than 45 days prior to such repayment or prepayment) to redeem a Like
Amount of the Securities at a redemption price equal to (i) in the case of the
repayment of the Debentures on the Maturity Date, the Maturity Redemption Price
(as defined below), (ii) in the case of the optional prepayment of the
Debentures upon the occurrence and continuation of a Special Event, the Special
Event Redemption Price (as defined below) and (iii) in the case of the optional
prepayment of the Debentures other than as a result of the occurrence and
continuance of a Special Event, the Optional Redemption Price (as defined
below). The Maturity Redemption Price, the Special Event Redemption Price and
the Optional Redemption Price are referred to collectively as the "Redemption
Price." Holders will be given not less than 30 nor more than 60 days notice of
such redemption.
(b) (i) The "Maturity Redemption Price", with respect to a
redemption of Securities, shall mean an amount equal to the principal of and
accrued interest on the Debentures as of the Maturity Date thereof.
(ii) The Debenture Issuer shall have the right (subject to
the conditions in the Indenture) to elect to prepay the Debentures to whole or
in part at any time on or after January 1, 2007 (the "Initial Optional
Redemption Date"), upon not less than 30 days and not more than 60 days notice,
at the Optional Prepayment Price (as defined in the Indenture) and, simultaneous
with such prepayment, to cause a Like Amount of the Securities to be redeemed at
the Optional Redemption Price on a Pro Rata basis. "Optional Redemption Price"
shall mean a price
I-5
equal to the percentage of the Liquidation Amount of Securities to be redeemed
plus accumulated and unpaid Distributions thereon, if any, to the date of such
redemption if redeemed during the 12 month period beginning January 1 of the
years indicated below:
Year Percentage
2007 104.355%
2008 103.920%
2009 103.484%
2010 103.049%
2011 102.613%
2012 102.178%
2013 101.742%
2014 101.307%
2015 100.871%
2016 100.436%
2017 and thereafter 100.000%
(c) If at any time a Tax Event or an Investment Company Event
(each as defined below, and each a "Special Event") occurs, the Debenture Issuer
shall have the right (subject to the conditions set forth in the Indenture) at
any time prior to the Initial Optional Redemption Date, upon not less than 30
nor more than 60 days notice, to prepay the Debentures in whole, but not in
part, within the 90 days following the occurrence of such Special Event (the "90
Day Period"), and, simultaneous with such redemption, to cause a Like Amount of
the Securities to be redeemed by the Trust at the Special Event Redemption Price
on a Pro Rata basis.
"Tax Event" shall mean the receipt by the Sponsor and the
Trust of an Opinion of Counsel, requested by the Sponsor, (a "Tax Event
Opinion") experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced prospective change) in, the
laws or any regulations thereunder of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
I-6
official administrative written decision or pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement or decision is made on or after January 13,
1997, 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 United States federal
income tax with respect to income received or accrued on the Debentures, (ii)
interest payable by the Debenture Issuer on the Debentures is not, or within 90
days of the date of such opinion, will not be, deductible by the Debenture
Issuer, in whole or in part, for United States federal income tax purposes, or
(iii) the Trust is, or will be within 90 days of the date of such opinion,
subject to more than a de minimis amount of other taxes, duties or other
governmental charges.
"Investment Company Event" means the Sponsor and the Trust
shall have received an opinion, requested by the Sponsor of counsel experienced
in practice under the Investment Company Act of 1940, as amended (the "1940
Act"), to the effect that, as a result of the occurrence of a change in law or
regulation or a 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" which is required to be
registered under the 1940 Act, which Change in 1940 Act Law becomes effective on
or after January 13, 1997.
"Special Event Redemption Price" shall mean an amount in cash
equal to the greater of (i) 100% of the Liquidation Amount of the Securities and
(ii) the sum, as determined by a Quotation Agent (as defined in the Indenture),
of the present values of the principal amount and premium payable as part of the
Optional Redemption Price on the Initial Optional Redemption Date together with
the scheduled payments of interest thereon from the prepayment date to and
including the Initial Optional Redemption Date, discounted to the redemption
date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Adjusted Treasury Rate (as defined in the Indenture), plus, in
each case, accumulated and unpaid Distributions thereon, if any, to the date of
such redemption.
I-7
(d) On and from the date fixed by the Administrative Trustees
for any distribution of Debentures and liquidation of the Trust: (i) the
Securities will no longer be deemed to be outstanding, (ii) the Clearing Agency
or its nominee (or any successor Clearing Agency or its nominee), as the Holder
of the Capital Securities, will receive a registered global certificate or
certificates representing the Debentures to be delivered upon such distribution
and (iii) any certificates representing Securities not held by the Clearing
Agency or its nominee (or any successor Clearing Agency or its nominee) will be
deemed to represent beneficial interests in a Like Amount of Debentures until
such certificates are presented to the Administrative Trustees or their agent
for cancellation, whereupon the Debenture Issuer will issue to such holder, and
the Debenture Trustee will authenticate, a certificate representing such
Debentures.
(e) The Trust may not redeem fewer than all the outstanding
Securities unless all accumulated and unpaid Distributions have been paid on all
Securities for all semi-annual Distribution periods that expire on or before the
date of redemption.
(f) The procedure with respect to redemptions or
distributions of Debentures shall be as follows:
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities
to be redeemed or exchanged not fewer than 30 nor more than 60 days
before the date fixed for redemption or exchange thereof which, in the
case of a redemption, will be the date fixed for repayment or prepayment
of the Debentures. For purposes of the calculation of the date of
redemption or exchange and the dates on which notices are given pursuant
to this Section 4(f)(i), 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 books and
records of the Trust. No defect in the Redemption/Distribution Notice or
in the mailing of
I-8
either thereof with respect to any Holder shall affect the validity of
the redemption or exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Securities are
to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata
from each Holder of Capital Securities, it being understood that, in
respect of Capital Securities registered in the name of and held of
record by the Clearing Agency or its nominee (or any successor Clearing
Agency or its nominee) or any nominee, the distribution of the proceeds
of such redemption will be made to the Clearing Agency and disbursed by
such Clearing Agency in accordance with the procedures applied by such
agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, (which notice will be irrevocable), then
(A) with respect to Capital Securities registered in the name of or held
of record by a Clearing Agency or its nominee, by 12:00 noon, New York
City time, on the redemption date, provided that the Debenture Issuer
has paid the Property Trustee a sufficient amount of cash in connection
with the related maturity or prepayment of the Debentures by 10:00 a.m.,
New York City time, on the Maturity Date or the date of prepayment, as
the case may be, the Property Trustee will deposit irrevocably with the
Clearing Agency or its nominee (or successor Clearing Agency or its
nominee) funds sufficient to pay the applicable Redemption Price with
respect to such Capital Securities and will give the Clearing Agency
irrevocable instructions and authority to pay the Redemption Price to
the relevant Clearing Agency Participants, and (B) with respect to
Capital Securities issued in certificated form and Common Securities,
provided that the Debenture Issuer has paid the Property Trustee a
sufficient amount of cash in connection with the related maturity or
prepayment of the Debentures, the Property Trustee will pay the relevant
Redemption Price to the Holders of such Securities by check mailed to
the address of the relevant Holder appearing on the books and records of
the Trust on the redemption date. If a Redemption/Distribution Notice
shall have been given and funds deposited as required, if applicable,
then immediately
I-9
prior to the close of business on the date of such deposit, or on the
redemption date, as applicable, Distributions will cease to accumulate
on the Securities so called for redemption and all rights of Holders of
such Securities so called for redemption will cease, except the right of
the Holders of such Securities to receive the Redemption Price, but
without interest on such Redemption Price, and such Securities shall
cease to be outstanding.
(iv) Payment of accumulated and unpaid Distributions on the
Redemption Date of the Securities will be subject to the rights of
Holders of Securities on the close of business on a regular record date
in respect of a Distribution Date occurring on or prior to such
Redemption Date.
(v) Neither the Administrative Trustees nor the Trust shall be
required to register or cause to be registered the transfer of (i) any
Securities beginning on the opening of business 15 days before the day
of mailing of a notice of redemption or any notice of selection of
Securities for redemption or (ii) any Securities selected for redemption
(except the unredeemed portion of any Security being redeemed). 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), 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 the Paying Agent
or by the Sponsor as guarantor pursuant to the relevant Securities
Guarantee, Distributions on such Securities will continue to accumulate
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.
(vi) Redemption/Distribution Notices shall be sent by the Property
Trustee on behalf of the Trust to (A) in respect of the Capital
Securities, the Clearing Agency or its nominee (or any successor
Clearing Agency or its nominee) if the Global Certificates have been
issued or, if
I-10
Definitive Capital Security Certificates have been issued,
to the Holder thereof, and (B) in respect of the Common Securities to
the Holder thereof.
(vii) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws and banking laws),
provided the acquiror is not the Holder of the Common Securities or the
obligor under the Indenture, the Sponsor or any of its Affiliates may at
any time and from time to time purchase outstanding Capital Securities
by tender, in the open market or by private agreement.
5. Voting Rights - Capital Securities.
(a) Except as provided under Sections 5(b) and 7 and as
otherwise required by law and the Declaration, the Holders of the Capital
Securities will have no voting rights.
(b) So long as any Debentures are held by the Property
Trustee, the Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred on such Debenture Trustee with respect to
the Debentures, (ii) waive any past default that is waivable under Section 5.07
of the Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Debentures or (iv) consent
to any amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a Majority in Liquidation Amount
of all outstanding Capital Securities; provided, however, that where a consent
under the Indenture would require the consent of each holder of Debentures
affected thereby, no such consent shall be given by the Property Trustee without
the prior approval of each Holder of the Capital Securities. The Trustees shall
not revoke any action previously authorized or approved by a vote of
the Holders of the Capital Securities except by subsequent vote of such Holders.
The Property Trustee shall notify each Holder of Capital Securities of any
notice of default with respect to the Debentures. In addition to obtaining the
foregoing approvals of such Holders of the Capital Securities, prior to taking
any of the foregoing actions, the Trustees
I-11
shall obtain an opinion of counsel experienced in such matters to the effect
that the Trust will not be classified as an association taxable as a corporation
for United States federal income tax purposes on account of such action.
If an Event of Default under the Declaration has occurred and
is continuing and such event is attributable to the failure of the Debenture
Issuer to pay principal of or premium, if any, or interest on the Debentures on
any due date (including any Interest Payment Date or prepayment date or Maturity
Date), then a Holder of Capital Securities may directly institute a proceeding
for enforcement of payment to such Holder of the principal of or premium, if
any, or interest on a Like Amount of Debentures (a "Direct Action") on or after
the respective due date specified in the Debentures. In connection with such
Direct Action, the rights of the Common Securities Holder will be subrogated to
the rights of such Holder of Capital Securities to the extent of any payment
made by the Debenture Issuer to such Holder of Capital Securities in such Direct
Action. Except as provided in the second preceding sentence, the Holders of
Capital Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.
Any approval or direction of Holders of 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 in the Trust or
pursuant to written consent. The Property Trustee will cause a notice of any
meeting at which Holders of Capital Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Capital Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consent.
No vote or consent of the Holders of the Capital Securities
will be required for the Trust to redeem and cancel Capital Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
I-12
Notwithstanding that Holders of Capital Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Capital Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), 6(c), and 7 as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) Unless a Debenture Event of Default shall have occurred
and be continuing, any Trustee may be removed at any time by the Holder of the
Common Securities. If a Debenture Event of Default has occurred and is
continuing, the Property Trustee and the Delaware Trustee may be removed at such
time by the holders of a Majority in Liquidation Amount of the outstanding
Capital Securities. In no event will the Holders of the Capital Securities have
the right to vote to appoint, remove or replace the Administrative Trustees,
which voting rights are vested exclusively in the Sponsor as the holder of the
Common Securities. No resignation or removal of a Trustee and no appointment of
a successor trustee shall be effective until the acceptance of appointment by
the successor trustee in accordance with the provisions of the Declaration.
(c) So long as any Debentures are held by the Property
Trustee, the Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred on such Debenture Trustee with respect to
the Debentures, (ii) waive any past default that is waivable under Section 5.07
of the Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Debentures or (iv) consent
to any amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a Majority in Liquidation Amount
of all outstanding Common Securities; provided, however, that where a consent
under the Indenture would require the consent of each holder of Debentures
affected thereby, no such consent shall
I-13
be given by the Property Trustee without the prior approval of each Holder of
the Common Securities. The Trustees shall not revoke any action previously
authorized or approved by a vote of the Holders of the Common Securities except
by subsequent vote of such Holders. The Property Trustee shall notify each
Holder of Common Securities of any notice of default with respect to the
Debentures. In addition to obtaining the foregoing approvals of such Holders of
the Common Securities, prior to taking any of the foregoing actions, the
Trustees shall obtain an Opinion of Counsel experienced in such matters to the
effect that the Trust will not be classified as an association taxable as a
corporation for United States federal income tax purposes on account of such
action.
If an Event of Default under the Declaration has occurred and
is continuing and such event is attributable to the failure of the Debenture
Issuer to pay principal of or premium, if any, or interest on the Debentures on
the due date (including any Interest Payment Date or prepayment date or Maturity
Date) (or in the case of redemption, on the redemption date), then a Holder of
Common Securities may institute a Direct Action for enforcement of payment to
such Holder of the principal of or premium, if any, or interest on a Like Amount
of Debentures on or after the respective due date specified in the Debentures.
In connection with Direct Action, the rights of the Holders of Capital
Securities will be subrogated to the rights of such Holder of Common Securities
to the extent of any payment made by the Debenture Issuer to such Holder of
Common Securities in such Direct Action. Except as provided in the second
preceding sentence, the Holders of Common Securities will not be able to
exercise directly any other remedy available to the holders of the Debentures.
Any approval or direction of Holders of Common Securities may
be given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Administrative Trustees will cause a notice of
any meeting at which Holders of Common Securities are entitled to vote, or of
any matter upon which action by written consent of such Holders is to be taken,
to be mailed to each Holder of record of Common Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
I-14
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
7. Amendments to Declaration and Indenture.
In addition to the requirements set out in Section 12.1 of the
Declaration, the Declaration may be amended from time to time by the Sponsor and
the Trustees, without the consent of the Holders of the Securities (i) to cure
any ambiguity, correct or supplement any provisions in the Declaration that may
be inconsistent with any other provisions, or to make any other provisions with
respect to matters or questions arising under the Declaration which shall not be
inconsistent with the other provisions of the Declaration, or (ii) to modify,
eliminate or add to any provisions of the Declaration to such extent as shall be
necessary to ensure that the Trust will be classified for United States federal
income tax purposes as a grantor trust at all times that any Securities are
outstanding or to ensure that the Trust will not be required to register as an
"investment company" under the Investment Company Act; provided, however, that
in the case of clause (i), such action shall not adversely affect in any
material respect the interests of any Holder of Securities. Any amendments of
the Declaration pursuant to the foregoing shall become effective when notice
thereof is given to the holders of the Securities. The Declaration also may be
amended by the Trustees and the Sponsor with (i) the consent of Holders
representing a Majority in Liquidation Amount of all outstanding Securities, and
(ii) receipt by the Trustees of an Opinion of Counsel to the effect that such
amendment or the exercise of any power granted to the Trustees in accordance
with such amendment will not affect the Trust's status as a grantor trust for
United States federal income tax purposes or the Trust's exemption from status
as an investment company under the Investment Company Act, provided that,
without the consent of each Holder of Trust Securities, the Declaration may not
I-15
be amended to (i) change the amount or timing of any Distribution on the Trust
Securities or otherwise adversely affect the amount of any Distribution required
to be made in respect of the Trust Securities as of a specified date or (ii)
restrict the right of a holder of Trust Securities to institute suit for the
enforcement of any such payment on or after such date.
8. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate Liquidation Amount of the Securities
held by the relevant Holder in relation to the aggregate Liquidation Amount of
all Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the Capital
Securities pro rata according to the aggregate Liquidation Amount of Capital
Securities held by the relevant Holder relative to the aggregate Liquidation
Amount of all Capital Securities outstanding, and only after satisfaction of all
amounts owed to the Holders of the Capital Securities, to each Holder of Common
Securities pro rata according to the aggregate liquidation amount of Common
Securities held by the relevant Holder relative to the aggregate Liquidation
Amount of all Common Securities outstanding.
9. Ranking.
The Capital Securities rank pari passu with the Common
Securities and payment thereon shall be made Pro Rata with the Common
Securities, except that, if an Event of Default under the Declaration occurs and
is continuing, no payments in respect of Distributions on, or payments upon
liquidation, redemption or otherwise with respect to, the Common Securities
shall be made until the Holders of the Capital Securities shall be paid in full
the Distributions, Redemption Price, Liquidation Distribution and other payments
to which they are entitled at such time.
10. Acceptance of Securities Guarantee and Indenture.
Each Holder of Capital Securities and Common Securities, by
the acceptance thereof, agrees to the provisions
I-16
of the Capital Securities Guarantee and the Common Securities Guarantee,
respectively, including the subordination provisions therein and to the
provisions of the Indenture.
11. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights
to subscribe for any additional securities.
12. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the
Capital Securities Guarantee or the Common Securities Guarantee (as may be
appropriate) and the Indenture (including any supplemental indenture) to a
Holder without charge on written request to the Sponsor at its principal place
of business.
I-17
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[IF THIS GLOBAL SECURITY IS A GLOBAL CAPITAL SECURITY, INSERT:
THIS CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITY WITHIN THE MEANING OF THE
DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING
AGENCY. THIS CAPITAL SECURITY IS EXCHANGEABLE FOR CAPITAL SECURITIES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE ONLY IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO TRANSFER OF THIS
CAPITAL SECURITY (OTHER THAN A TRANSFER OF THIS CAPITAL SECURITY AS A WHOLE BY
THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE OF THE
CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING
AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.]
[IF THIS GLOBAL SECURITY IS A RULE 144A GLOBAL SECURITY,
INSERT: UNLESS THIS CAPITAL SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CAPITAL SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE CAPITAL SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER
THIS CAPITAL SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, SUCH REGISTRATION.
A1-1
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS CAPITAL SECURITY, PRIOR TO THE
DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE
LATER OF THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH MARKEL
CORPORATION ("THE COMPANY") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF
THIS CAPITAL SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL SECURITY) ONLY (A) TO
THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS CAPITAL SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A")
TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S.
PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN ACCOUNT, OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT,
SUBJECT TO THE RIGHT OF THE TRUST AND THE COMPANY PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER (i) PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND (ii) PURSUANT TO CLAUSE (E), TO REQUIRE THAT THE TRANSFEROR DELIVER
TO THE TRUST A LETTER FROM THE TRANSFEREE SUBSTANTIALLY IN THE FORM OF ANNEX A
TO THE OFFERING MEMORANDUM DATED JANUARY 8, 1997. SUCH HOLDER FURTHER AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS CAPITAL SECURITY IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF
ALSO AGREES, REPRESENTS AND WARRANTS THAT IT (A) IS NOT ITSELF, AND IS NOT
ACQUIRING CAPITAL SECURITIES WITH "PLAN ASSETS" OF, AN EMPLOYEE BENEFIT OR OTHER
PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE
A1-2
OF 1986, AS AMENDED (THE "CODE") (EACH, A "PLAN"), OR AN ENTITY WHOSE UNDERLYING
ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY (A
"PLAN ASSET ENTITY"), OR (B) IS ACQUIRING AND HOLDING THE CAPITAL SECURITIES IN
A TRANSACTION THAT IS NOT OTHERWISE PROHIBITED BY EITHER ERISA OR THE CODE.
[IF THIS GLOBAL SECURITY IS A REGULATION S GLOBAL SECURITY,
INSERT: THIS CAPITAL SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS UNLESS REGISTERED UNDER THE SECURITIES ACT
OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS
AVAILABLE.]
A1-3
Certificate Number Number of Capital Securities
CUSIP NO.
Certificate Evidencing Capital Securities
of
MARKEL CAPITAL TRUST I
8.71% Series _ Capital Securities
(Liquidation Amount $1,000 per Capital Security)
MARKEL CAPITAL TRUST I, 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 capital securities of the Trust representing undivided beneficial interests
in the assets of the Trust designated the 8.71% Series _ Capital Securities
(Liquidation Amount $1,000 per Capital Security) (the "Capital Securities"). The
Capital Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this certificate duly
endorsed and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Capital
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of January 13, 1997, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Capital Securities
as set forth in Annex I to the Declaration. Capitalized terms used but not
defined herein shall have the meaning given them in the Declaration. The Sponsor
will provide a copy of the Declaration, the Capital Securities Guarantee and the
Indenture to a Holder without charge upon written request to the Trust at its
principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Capital Securities Guarantee to the extent provided therein.
By its acceptance hereof, the Holder agrees to treat, for
United States federal income tax purposes, the Debentures
A1-4
as indebtedness and the Capital Securities as evidence of indirect beneficial
ownership in the Debentures.
A1-5
IN WITNESS WHEREOF, an Administrative Trustee on behalf of the
Trust has duly executed this certificate.
Date:_________________
MARKEL CAPITAL TRUST I
By:_____________________________
Name:
Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Capital Securities referred to in the
within-mentioned Declaration.
THE CHASE MANHATTAN BANK, as
Property Trustee
By:________________________________
Authorized Officer
A1-6
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security
will be fixed at a rate per annum of 8.71% (the "Coupon Rate") of the
Liquidation Amount of $1,000 per Capital Security, such rate being the rate of
interest payable on the Debentures to be held by the Property Trustee.
Distributions in arrears for more than one semi-annual period will bear interest
thereon compounded semi-annually at the Coupon Rate (to the extent permitted by
applicable law). Pursuant to the Registration Rights Agreement, in certain
limited circumstances the Debenture Issuer will be required to pay Liquidated
Damages (as defined in the Registration Rights Agreement) with respect to the
Debentures. The term "Distributions", as used herein, includes such cash
distributions and any such interest and such Liquidated Damages payable unless
otherwise stated. A Distribution is payable only to the extent that payments are
made in respect of the Debentures held by the Property Trustee and to the extent
the Property Trustee has funds on hand legally available therefor.
Distributions on the Capital Securities will be cumulative,
will accumulate from the most recent date to which Distributions have been paid
or, if any Distributions have been paid, from January 13, 1997 and will be
payable semi-annually in arrears, on January 1 and July 1 of each year,
commencing on July 1, 1997, except as otherwise described below and in the
Declaration. Distributions will be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period less than a full calendar
month, the number of days elapsed in such month. As long as no Event of Default
has occurred and is continuing under the Indenture, the Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period at any time and from time to time on the Debentures for
a period not exceeding 10 consecutive calendar semi-annual periods, including
the first such semi-annual period during such extension period (each an
"Extension Period"), provided that no Extension Period shall extend beyond the
Maturity Date of the Debentures. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, semi-annual
Distributions will continue to accumulate with interest thereon (to the extent
permitted by applicable law, but not at a rate exceeding the rate of interest
then accruing on the Debentures) at the Coupon Rate
A1-7
compounded semi-annually during any such Extension Period. Prior to the
termination of any such Extension Period, the Debenture Issuer may further defer
payments of interest by further extending such Extension Period; provided that
such Extension Period, together with all such previous and further extensions
within such Extension Period, may not exceed 10 consecutive semi-annual periods,
including the first semi-annual period during such Extension Period, or extend
beyond the Maturity Date of the Debentures. Payments of Distributions that have
accumulated but not been paid during any Extension Period will be payable to
Holders as they appear on the books and records of the Trust on the records of
the Trust on the record date for the first scheduled Distribution payment date
following the expiration of such first record date after the end of the
Extension Period. Upon the expiration of any Extension Period and the payment of
all amounts then due, the Debenture Issuer may commence a new Extension Period,
subject to the above requirements.
Subject to certain conditions set forth in the Declaration and
the Indenture, the Property Trustee shall, at the direction of the Sponsor, at
any time liquidate the Trust and cause the Debentures to be distributed to the
holders of the Securities in liquidation of the Trust or, simultaneous with any
redemption of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.
The Capital Securities shall be redeemable as provided in the
Declaration upon the maturity or prepayment of the Debentures. The maturity date
of the Debentures is January 1, 2046, which date is subject to advancement as
described in the next sentence. If a Tax Event occurs, then the Sponsor will
have the right (i) prior to the termination of the Trust, to advance the
Maturity Date of the Debentures to the minimum extent required, but not to a
date earlier than twenty years from January 13, 1997 (the "Issue Date"), or (ii)
to terminate the Trust (if not previously terminated) and advance the Maturity
Date of the Debentures to the minimum extent required, but not to a date earlier
than forty years from the Issue Date, in each case such that, in the written
opinion of counsel experienced in such matters delivered to the Sponsor, after
advancing the Maturity Date, interest paid on the Debentures shall be deductible
for United States federal income tax purposes.
A1-8
--------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Capital Security Certificate to:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert assignee's social security or tax identification number)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
_______________________________________________________________________________
_______________________________________________________________________________
________________________________________________________ agent
to transfer this Capital Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date:____________________________________
Signature:______________________________
(Sign exactly as your name appears on the other side of this
Capital Security Certificate)
Signature Guarantee*:___________________
_______________________________________
* Signature must be guaranteed by an "eligible guarantor institution" that is a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
A1-10
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities and Exchange Act of 1934, as amended.
A1-11
[Include the following if the Capital Security bears a Restricted
Capital Securities Legend --
In connection with any transfer of any of the Capital Securities evidenced by
this certificate, the undersigned confirms that such Capital Securities are
being:
CHECK ONE BOX BELOW
(1) (_) exchanged for the undersigned's own account
without transfer; or
(2) (_) transferred pursuant to and in compliance with
Rule 144A under the Securities Act of 1933, as
amended; or
(3) (_) transferred pursuant to and in compliance with
Regulation S under the Securities Act of 1933, as
amended; or
(4) (_) to an institutional "accredited investor" within
the meaning of subparagraph (a)(1), (2), (3) or
(7) of Rule 501 under the Securities Act of 1933,
as amended, that is acquiring the Capital
Securities for its own account, or for the account
of such an institutional "accredited investor,"
for investment purposes and not with a view to, or
for offer or sale in connection with, any
distribution in violation of the Securities Act of
1933, as amended; or
(5) (_) transferred pursuant to another available
exemption from the registration requirements of
the Securities Act of 1933, as amended; or
(6) (_) transferred pursuant to an effective registration
statement.
Unless one of the boxes is checked, the Exchange Agent will refuse to register
any of the Capital Securities evidenced by this certificate in the name of any
A1-12
person other than the registered Holder thereof; provided, however, that if box
(3), (4) or (5) is checked, the Exchange Agent may require, prior to registering
any such transfer of the Capital Securities such legal opinions, certifications
and other information as the Trust has reasonably requested to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of 1933, as
amended, such as the exemption provided by Rule 144 under such Act; provided,
further, that (i) if box 2 is checked, the transferee must also certify that it
is a qualified institutional buyer as defined in Rule 144A or (ii) if box (4) is
checked, the transferee must also provide to the Exchange Agent a Transferee
Letter of Representation in the form attached to the Offering Memorandum of the
Trust dated January 8, 1997; provided, further, that after the date that a
Registration Statement has been filed and so long as such Registration Statement
continues to be effective, the Exchange Agent may only permit transfers for
which box (5) has been checked.
Date:
Signature_________________________________
(Sign exactly as you name
appears on the other side
of this Capital Security
Certificate)
A1-13
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW.
THIS COMMON SECURITY MAY NOT BE TRANSFERRED EXCEPT TO
MARKEL CORPORATION OR A RELATED PARTY (AS DEFINED IN THE
DECLARATION).
A2-1
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
Markel Corporate Trust I
8.71% Common Securities
(Liquidation Amount $1,000 per Common Security)
MARKEL CAPITAL TRUST I, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
Markel Corporation (the "Holder") is the registered owner of _________________
common securities of the Trust representing undivided beneficial interests in
the assets of the Trust designated the 8.71% Common Securities (liquidation
amount $1,000 per Common Security) (the "Common Securities"). The Common
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of January 13, 1997, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Common Securities
as set forth in Annex I to the Declaration. Capitalized terms used but not
defined herein shall have the meaning given them in the Declaration. The Sponsor
will provide a copy of the Declaration, the Common Securities Guarantee and the
Indenture (including any supplemental indenture) to a Holder without charge upon
written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Common Securities Guarantee to the extent provided therein.
A2-2
By its acceptance hereof, the Holder agrees to treat, for
United States federal income tax purposes, the Debentures as indebtedness and
the Common Securities as evidence of indirect beneficial ownership in the
Debentures.
A2-3
IN WITNESS WHEREOF, the Trust has executed this certificate
this ___ day of January, 1997.
MARKEL CAPITAL TRUST I
By:________________________________
Name:
Administrative Trustee
A2-4
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at
a rate per annum of 8.71% (the "Coupon Rate") of the liquidation amount of
$1,000 per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one semi-annual period will bear interest thereon compounded semiannually
at the Coupon Rate (to the extent permitted by applicable law). Pursuant to the
Registration Rights Agreement, in certain limited circumstances the Debenture
Issuer will be required to pay Liquidated Damages (as defined in the
Registration Rights Agreement) with respect to the Debentures. The term
"Distributions", as used herein, includes such cash distributions and any such
interest and such Liquidated Damages payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds available therefor.
Distributions on the Common Securities will be cumulative,
will accrue from the most recent date to which Distributions have been paid or,
if no Distributions have been paid, from January 13, 1997 and will be payable
semi-annually in arrears, on January 1 and July 1 of each year, commencing on
July 1, 1997, except as otherwise described below and in the Declaration.
Distributions will be computed on the basis of a 360-day year consisting of
twelve 30 day months and, for any period less than a full calendar month, the
number of days elapsed in such month. As long as no Event of Default has
occurred and is continuing under the Indenture, the Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period at any time and from time to time on the Debentures for
a period not exceeding 10 consecutive calendar semi-annual periods, including
the first such semi-annual period during such extension period (each an
"Extension Period"), provided that no Extension Period shall extend beyond the
Maturity Date of the Debentures. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, Distributions will
continue to accumulate with interest thereon (to the extent permitted by
applicable law, but not at a rate exceeding the rate of interest then accruing
on the Debentures) at the Coupon Rate compounded
A2-5
semi-annually during any such Extension Period. Prior to the termination of any
such Extension Period, the Debenture Issuer may further defer payments of
interest by further extending such Extension Period; provided that such
Extension Period, together with all such previous and further extensions within
such Extension Period, may not exceed 10 consecutive semi-annual periods,
including the first semi-annual period during such Extension Period, or extend
beyond the Maturity Date of the Debentures. Payments of Distributions that have
accumulated will be payable to Holders as they appear on the books and records
of the Trust on the record date for the first Distribution Date following the
expiration of such Extension Period. Upon the expiration of any Extension Period
and the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
Subject to certain conditions set forth in the Declaration and
the Indenture, the Property Trustee shall, at the direction of the Sponsor, at
any time liquidate the Trust and cause the Debentures to be distributed to the
holders to the Securities in liquidation of the Trust or, simultaneous with any
redemption of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.
The Common Securities shall be redeemable as provided in the
Declaration.
A2-6
-------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(Insert assignee's social security or tax identification number)
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints_____________________________________________________
_____________________________________________________________________________
_________________________________ agent to transfer this Common Security
Certificate on the books of the Trust. The agent may substitute another to act
for him or her.
Date:____________________________
Signature:______________________________
(Sign exactly as your name appears on the other side of this
Common Security Certificate)
Signature Guarantee*:___________________________________________________
______________________
* Signature must be guaranteed by an "eligible guarantor
institution" that is a bank, stockbroker, savings and loan
association or credit union meeting the requirements of the
Registrar, which requirements include membership or
A2-7
participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in addition
to, or in substitution for, STAMP, all in accordance with
the Securities and Exchange Act of 1934. as amended.
A2-8
[Include the following if the Common Security bears a Restricted
Common Securities Legend -
In connection with any transfer of any of the Common Securities evidenced by
this certificate, the undersigned confirms that such Common Securities are
being:
CHECK ONE BOX BELOW
(1) (_) exchanged for the undersigned's own account
without transfer; or
(2) (_) transferred pursuant to and in compliance with
Rule 144A under the Securities Act of 1933, as
amended; or
(3) (_) transferred pursuant to and in compliance with
Regulation S under the Securities Act of 1933, as
amended; or
(4) (_) to an institutional "accredited investor" within
the meaning of subparagraph (a)(1), (2), (3) or
(7) of Rule 501 under the Securities Act of 1933,
as amended that is acquiring the Preferred
Security for its own account, or for the account
of such an institutional "accredited investor,"
for investment purposes and not with a view to, or
for offer or sale in connection with, any
distribution in violation of the Securities Act of
1933, as amended; or
(5) (_) transferred pursuant to another available
exemption from the registration requirements of
the Securities Act of 1933; or
(6) (_) transferred pursuant to an effective registration
statement
Unless one of the boxes is checked, the Exchange Agent will refuse to register
any of the Common Securities evidenced by this certificate in the name of any
A2-9
person other than the registered Holder thereof; provided, however, that if box
(3), (4) or (5) is checked, the Exchange Agent may require, prior to registering
any such transfer of the Preferred Securities such legal opinions,
certifications and other information as the Trust has reasonably requested to
confirm that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act
of 1933, as amended, such as the exemption provided by Rule 144 under such
Act; provided, further, that (i) if box 2 is checked, the transferee must also
certify that it is a qualified institutional buyer as defined in Rule 144A or
(ii) if box 4 is checked, the transferee must also provide a Transferee
Representation Letter in the form attached to the Offering Memorandum of the
Trust, dated January 8, 1997, after the date that a Registration Statement has
been filed and so long as such Registration Statement continues to be effective,
the Exchange Agent may only permit transfers for which box (5) has been checked.
Date: __________________________
Signature
(Sign exactly as your name
appears on the other side
of this Common Security
Certificate)
A2-10