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EXHIBIT 4(x)
AMENDED
AND
RESTATED
DECLARATION OF TRUST
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TABLE OF CONTENTS
PAGE
ARTICLE 1: INTERPRETATION AND DEFINITIONS..........................................................2
Section 1.1 Interpretation and Definitions...........................................2
ARTICLE 2: TRUST INDENTURE ACT....................................................................19
Section 2.1 Trust Indenture Act; Application........................................19
Section 2.2 Lists of Holders of the Securities......................................19
Section 2.3 Reports by the Property Trustee.........................................20
Section 2.4 Periodic Reports to the Property Trustee................................20
Section 2.5 Evidence of Compliance with Conditions Precedent........................20
Section 2.6 Trust Enforcement Events; Waiver........................................21
Section 2.7 Trust Enforcement Event; Notice.........................................22
ARTICLE 3: ORGANIZATION...........................................................................23
Section 3.1 Name and Organization...................................................23
Section 3.2 Office..................................................................23
Section 3.3 Purpose.................................................................23
Section 3.4 Authority...............................................................24
Section 3.5 Title to Property of the Trust..........................................24
Section 3.6 Powers and Duties of the Regular Trustees...............................25
Section 3.7 Prohibition of Actions by the Trust and the Trustees....................28
Section 3.8 Powers and Duties of the Property Trustee...............................29
Section 3.9 Certain Duties and Responsibilities of the Property
Trustee.................................................................32
Section 3.10 Certain Rights of Property Trustee......................................34
Section 3.11 Delaware Trustee........................................................37
Section 3.12 Execution of Documents..................................................37
Section 3.13 Not Responsible for Recitals or Issuance of Securities..................37
Section 3.14 Duration of Trust.......................................................38
Section 3.15 Mergers.................................................................38
Section 3.16 Compensation and Reimbursement..........................................40
Section 3.17 Property Trustee May File Proofs of Claim...............................41
Section 3.18 Registration Statement and Related Matters..............................42
Section 3.19 Books and Records.......................................................43
ARTICLE 4: THE SPONSOR............................................................................43
Section 4.1 Responsibilities of the Sponsor.........................................43
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Section 4.2 Indemnification and Expenses of the Trustees............................44
ARTICLE 5: THE HOLDERS OF THE COMMON SECURITIES...................................................44
Section 5.1 Subordinated Deferrable Notes Issuer's Purchase of the
Common Securities.......................................................44
Section 5.2 Covenants of the Subordinated Deferrable Notes Issuer...................45
Section 5.3 Holder of the Common Securities.........................................45
Section 5.4 Exchanges...............................................................46
ARTICLE 6: THE TRUSTEES...........................................................................47
Section 6.1 Number of Trustees......................................................47
Section 6.2 Delaware Trustee; Eligibility...........................................47
Section 6.3 Property Trustee; Eligibility...........................................48
Section 6.4 Qualifications of the Regular Trustees Generally........................49
Section 6.5 Initial Regular Trustees................................................49
Section 6.6 Appointment, Removal and Resignation of the
Trustees................................................................49
Section 6.7 Vacancies among Trustees................................................51
Section 6.8 Effect of Vacancies.....................................................51
Section 6.9 Meetings................................................................52
Section 6.10 Delegation of Power by the Regular Trustees.............................52
Section 6.11 Merger, Consolidation, Conversion or Succession to
Business................................................................53
ARTICLE 7: TERMS OF THE SECURITIES................................................................53
Section 7.1 General Provisions Regarding the Securities.............................53
Section 7.2 Distributions...........................................................57
Section 7.3 Redemption of Securities................................................59
Section 7.4 Redemption Procedures...................................................62
Section 7.5 Voting Rights of the Preferred Securities...............................64
Section 7.6 Voting Rights of the Common Securities..................................67
Section 7.7 Paying Agent............................................................69
Section 7.8 Listing.................................................................69
Section 7.9 Transfer of the Securities..............................................69
Section 7.10 Mutilated, Destroyed, Lost or Stolen Certificates.......................71
Section 7.11 Deemed Holders..........................................................71
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Section 7.12 Global Securities.......................................................72
Section 7.13 Remarketing.............................................................75
ARTICLE 8: DISSOLUTION AND TERMINATION OF THE TRUST.........................................78
Section 8.1 Dissolution and Termination of the Trust................................78
Section 8.2 Liquidation Distribution Upon Dissolution of the Trust..................79
ARTICLE 9: LIMITATION OF LIABILITY OF HOLDERS OF THE
SECURITIES, THE DELAWARE TRUSTEE AND OTHERS......................................81
Section 9.1 Liability...............................................................81
Section 9.2 Exculpation.............................................................82
Section 9.3 Fiduciary Duty..........................................................82
Section 9.4 Indemnification.........................................................84
Section 9.5 Outside Businesses......................................................85
ARTICLE 10: ACCOUNTING.......................................................................85
Section 10.1 Fiscal Year.............................................................85
Section 10.2 Certain Accounting Matters..............................................85
Section 10.3 Banking.................................................................86
Section 10.4 Withholding.............................................................86
ARTICLE 11: AMENDMENTS AND MEETINGS..........................................................87
Section 11.1 Amendments..............................................................87
Section 11.2 Meetings of the Holders of the Securities; Action by
Written Consent.........................................................90
ARTICLE 12: REPRESENTATIONS OF THE PROPERTY
TRUSTEE AND THE DELAWARE TRUSTEE.................................................91
Section 12.1 Representations and Warranties of the Property Trustee..................91
Section 12.2 Representations and Warranties of the Delaware
Trustee.................................................................92
ARTICLE 13: MISCELLANEOUS....................................................................93
Section 13.1 Notices.................................................................93
Section 13.2 Governing Law...........................................................95
Section 13.3 Intention of the Parties................................................95
Section 13.4 Headings................................................................95
Section 13.5 Successors and Assigns..................................................95
Section 13.6 Partial Enforceability..................................................95
Section 13.7 Counterparts............................................................96
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AMENDED AND RESTATED DECLARATION OF TRUST
This Amended and Restated Declaration of Trust of CMS Energy Trust III
("Declaration"), dated as of August 22, 2000, by and among CMS Energy Corpora-
tion, a Michigan corporation, including any successors or assigns, as Sponsor,
Alan M. Wright, an individual, and Thomas A. McNish, an individual, as the
initial Regular Trustees, The Bank of New York, as the initial Property Trustee,
and The Bank of New York (Delaware), as the initial Delaware Trustee, not in
their individual capacities but solely as Trustees, and the Holders, from time
to time, of the Securities representing undivided beneficial ownership interests
in the assets of the Trust to be issued pursuant to this Declaration.
WHEREAS, certain of the Trustees and the Sponsor established CMS Energy
Trust III (the "Trust"), a business trust under the Business Trust Act, pursuant
to a Declaration of Trust dated as of December 10, 1998, (the "Original
Declaration") and a Certificate of Trust (the "Certificate of Trust") filed with
the Secretary of State of the State of Delaware on December 10, 1998; and
WHEREAS, the sole purpose of the Trust shall be to sell and issue
certain securities representing undivided beneficial interests in the assets of
the Trust, to invest the proceeds from such sales in the Subordinated Deferrable
Notes issued by the Subordinated Deferrable Notes Issuer and to engage in only
those activities necessary or incidental thereto; and
WHEREAS, the parties hereto, by this Declaration, amend and restate
each and every term and provision of the Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
trustees hereby declare that all assets contributed to the Trust be held in
trust for the benefit of the Holders, from time to time, of the Securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE 1: INTERPRETATION AND DEFINITIONS
Section 1.1 Interpretation and Definitions. Unless the context
otherwise requires:
(a) capitalized terms used in this Declaration but not defined in the
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preamble above shall have the meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Declaration shall have the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration" shall be
to this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles, Sections, Recitals
and Exhibits shall be to Articles and Sections of, or Recitals and Exhibits to,
this Declaration unless otherwise specified;
(e) unless otherwise defined in this Declaration, a term defined in
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), shall
have the same meaning when used in this Declaration; and
(f) a reference to the singular shall include the plural and vice
versa, and a reference to any masculine form of a term shall include the
feminine or neuter form of a term, as applicable.
(g) the following terms shall have the following meanings:
"Adjusted Treasury Rate" means, with respect to any Cash Merger
Event Early Redemption, the rate per annum equal to the quarterly equivalent
yield to maturity of the Comparable Treasury Issue, assuming a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price at such date of Cash Merger Event Early
Redemption, plus 2.50%.
"Affiliate" of any specified Person shall mean any other Person
directly or indirectly controlling or controlled by, or under direct or indirect
common control with, such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person shall mean the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" shall have meanings correlative to
the foregoing.
"Applicable Margin" shall mean the spread determined as set
forth below, based on the prevailing rating of the subordinated notes of the
Subordinated Deferrable Notes Issuer in effect at the close of business on the
Business Day immediately preceding the date of a Failed Remarketing:
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Prevailing Rating Spread
AA/"Aa".......................... 3.00%
A/"a"............................ 4.00%
BBB/"Baa"........................ 5.00%
Below BBB/"Baa".................. 7.00%
For purposes of this definition, the "prevailing rating" of the subordinated
notes of the Subordinated Deferrable Notes Issuer shall be:
(i) AA/ "Aa" if the subordinated notes of the Subordinated
Deferrable Notes Issuer have a credit rating of AA or better by S&P and
"Aa3" or better by Moody's or the equivalent of such ratings by such
agencies or a comparable rating agency or comparable rating agencies
selected by the Remarketing Agent (after consultation with the
Company);
(ii) if not under clause (i) above, then A/"a" if the
subordinated notes of the Subordinated Deferrable Notes Issuer have a
credit rating of A- or better by S&P and "A3" or better by Moody's or
the equivalent of such ratings by such agencies or a comparable rating
agency or comparable rating agencies selected by the Remarketing Agent
(after consultation with the Company);
(iii) if not under clauses (i) or (ii) above, then BBB/"Baa" if
the subordinated notes of the Subordinated Deferrable Notes Issuer have
a credit rating of BBB- or better by S&P and "Baa" or better by Moody's
or the equivalent of such ratings by such agencies or a comparable
rating agency or comparable rating agencies selected by the Remarketing
Agent (after consultation with the Company); or
(iv) if not under clauses (i) through (iii) above, then Below
BBB/"Baa."
Notwithstanding the foregoing, (A) if (i) the credit rating of the subordinated
notes of the Company by S&P shall be on the "Credit Watch" of S&P with a
designation of "negative implications" or "developing," or (ii) the credit
rating of the subordinated notes of the Company by Moody's shall be on the
"Corporate Credit Watch List" of Moody's with a designation of "downgrade" or
"uncertain," or, in each case, on any successor list of S&P or Moody's with a
comparable designation, the prevailing ratings of the subordinated notes of the
Company shall be deemed to be within a range one full level lower in the above
table than those actually assigned to the subordinated notes of the Company by
Moody's and S&P and (B) if the subordinated
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notes of the Company are rated by only one rating agency on or before the
Remarketing Date, the prevailing rating shall at all times be determined without
reference to the rating of any other rating agency; provided that if no such
rating agency shall have in effect a rating for the subordinated notes of the
Company, and the Remarketing Agent is unable to identify a comparable rating
agency or rating agencies, as required above, the prevailing rating shall be
Below BBB/ "baa."
"Applicable Ownership Interest" shall mean, with respect to a PEPS
Units and the U.S. treasury securities in the Treasury Portfolio, (A) a 1/40, or
2.5%, undivided beneficial ownership interest in a $1,000 face amount of a
principal or interest strip in a U.S. treasury security included in such
Treasury Portfolio that matures on or prior to August 15, 2003 and (B) for each
scheduled interest payment date on the Subordinated Deferrable Notes after the
Tax Event Redemption Date, a 1/40, or 2.5%, undivided beneficial ownership
interest in a $1,000 face amount of a principal or interest strip in a U.S.
treasury security that matures on or prior to such date.
"Applicable Principal Amount" shall mean either (A) if the Tax Event
Redemption Date occurs prior to the Purchase Contract Settlement Date, the
aggregate principal amount of the Subordinated Deferrable Notes corresponding to
the aggregate stated liquidation amount of the Preferred Securities that are
components of the PEPS Units on the Tax Event Redemption Date or (B) if the Tax
Event Redemption Date occurs on or after the Purchase Contract Settlement Date,
the aggregate principal amount of the Subordinated Deferrable Notes
corresponding to the aggregate stated liquidation amount of the Preferred
Securities outstanding on such Tax Event Redemption Date.
"Authorized Officer" of a Person shall mean any Person that is
authorized to bind such Person.
"Beneficial Owner" shall mean, with respect to a Global Security, a
Person who is the beneficial owner of a book-entry interest in such Global
Security as reflected on the books of the Depositary or on the books of a Person
maintaining an account with such Depositary (directly as a Depositary
Participant or as an indirect participant, in each case in accordance with the
rules of such Depositary).
"Business Day" shall mean any day other than a Saturday or Sunday or a
day on which banking institutions in the City of New York, New York or Delaware
are authorized or required by law or executive order to remain closed.
"Business Trust Act" shall mean Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to time,
or any successor legislation.
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"Cash Settlement" shall have the meaning specified in the Purchase
Contract Agreement.
"Certificate" shall mean a Common Security Certificate or a Preferred
Security Certificate.
"Clearing Agency" shall mean an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Preferred Securities and in whose name or in the name of a nominee of
that organization shall be registered a Global Certificate and which shall
undertake to effect book-entry transfers and pledges of the Preferred
Securities.
"Closing Date" shall mean the date on which the Preferred Securities
are initially issued and sold.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, or any successor legislation. A reference to a specific section of
the Code refers not only to such specific section but also to any corresponding
provision of any federal tax statute enacted after the date of this Declaration,
as such specific section or corresponding provision is in effect on the date of
application of the provisions of this Declaration containing such reference.
"Collateral Agent" shall mean The Chase Manhattan Bank.
"Commission" shall mean the Securities and Exchange Commission.
"Common Security" shall have the meaning specified in Section 7.1(a).
"Common Security Certificate" shall mean a definitive certificate in
fully registered form representing a Common Security, substantially in the form
of Exhibit B hereto.
"Company" shall mean CMS Energy Corporation, a Michigan corporation,
the Sponsor, Subordinated Deferrable Notes Issuer, and the parent of the Trust.
"Comparable Treasury Issue" means the United States treasury security
selected by an Independent Investment Banker as having a maturity on August 15,
2003, to be redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of trust
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preferred securities and corporate debt securities of comparable maturity.
"Comparable Treasury Price" means, with respect to any date of Cash
Merger Event Early Redemption:
(1) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on
the third Business Day preceding such date of redemption, as set forth in
the daily statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities"; or
(2) if such release (or any successor release) is not published or does
not contain such prices on such Business Day, (a) the average of the
Reference Treasury Dealer Quotations for such date of redemption, after
excluding the highest and lowest such Reference Treasury Dealer Quotations,
or (b) if The Bank of New York obtains fewer than three such Reference
Treasury Dealer Quotations, the average of both such Reference Treasury
Dealer Quotations.
"Compounded Distributions" shall have the meaning specified in Section
7.2(b).
"Corporate Trust Office" shall mean the principal office of the
Property Trustee at which, at any particular time, its corporate trust business
shall be administered, which office at the date hereof is located at 101 Barclay
Street, 21 West, New York, New York 10286, Attn: Corporate Trust Services
Division.
"Covered Person" shall mean (A) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Sponsor, (ii) any
Affiliate of the Sponsor, (iii) the Trust or (iv) any Affiliate of the Trust and
(B) any Holder.
"Depositary" shall mean, with respect to Securities issuable in whole
or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as depositary for
such Securities, and initially shall be The Depository Trust Company.
"Depositary Agreement" shall mean the agreement among the Trust, the
Property Trustee and the Depositary dated as of the Closing Date, as the same
may be amended or supplemented from time to time.
"Depositary Participant" shall mean a member of, or participant in, the
Depositary.
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"Direct Action" shall have the meaning specified in Section 3.8(e).
"Distribution" shall mean a distribution payable to the Holders in
accordance with Section 7.2.
"Exchange Act" shall mean the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.
"Failed Remarketing" shall have the meaning specified in Section
7.13(h).
"Fiscal Year" shall have the meaning specified in Section 10.1.
"Foreign Person" shall mean any Person that is not a United States
Person.
"Global Certificate" shall have the meaning specified in Section
7.1(h).
"Global Security" shall mean a global Preferred Security Certificate
registered in the name of the Depositary or its nominee.
"Guarantee" shall mean the Guarantee Agreement, dated as of August 22,
2000, of the Sponsor, as may be amended from time to time, in respect of the
Preferred Securities.
"Holder" shall mean any holder of Securities, as registered on the
books and records of the Trust, such holder being a beneficial owner within the
meaning of the Business Trust Act, provided that in determining whether the
Holders of the requisite liquidation amount of Preferred Securities have voted
on any matter provided for in this Declaration, then for the purpose of such
determination only (and not for any other purpose hereunder), if the Preferred
Securities remain in the form of one or more Global Securities and if the
Depositary has sent an omnibus proxy to the Depositary Participants to whose
accounts the Preferred Securities are credited on the record date, the term
"Holders" shall mean such Depositary Participants acting at the direction of the
Beneficial Owners.
"Indemnified Person" shall mean any Trustee, any Affiliate of any
Trustee, any Paying Agent, any officers, directors, shareholders, members,
partners,
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employees, representatives or agents of any Trustee, Affiliate of a Trustee or
Paying Agent, or any officer, employee or agent of the Trust or any of its
Affiliates.
"Indenture" shall mean the indenture dated as of June 1, 1997 between
the Subordinated Deferrable Notes Issuer and the Indenture Trustee (including
the provisions of the Trust Indenture Act that are deemed incorporated therein),
as the same may be amended, modified or supplemented from time to time in
accordance with the terms thereof, pursuant to which the Subordinated Deferrable
Notes are to be issued.
"Indenture Event of Default" shall have the meaning given to the term
"Event of Default" in the Indenture.
"Indenture Trustee" shall mean The Bank of New York, in its capacity as
trustee under the Indenture, until a successor is appointed thereunder, and
thereafter shall mean such successor trustee.
"Independent Investment Banker" means one of the "Reference Treasury
Dealers" appointed by The Bank of New York after consultation with the Sponsor.
"Investment Company" shall mean an investment company as defined in the
Investment Company Act and the regulations promulgated thereunder.
"Investment Company Act" shall mean the Investment Company Act of 1940,
as amended from time to time, or any successor legislation.
"Legal Action" shall have the meaning specified in Section 3.6(f).
"List of Holders" shall have the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount" shall mean, except as provided by the
Trust Indenture Act, Holders of outstanding Securities, voting together as a
single class, or, as the context may require, Holders of outstanding Preferred
Securities or Holders of the outstanding Common Securities, voting separately as
a class, who are the record owners of more than 50% of the aggregate liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accumulated and unpaid Distributions to the date
upon which the voting percentages are determined) of all outstanding Securities,
Preferred Securities or Common Securities, as the case may be.
"Make-Whole Price" shall mean, with respect to a Security that is to be
redeemed early in a Cash Merger Event Early Redemption, an amount equal to the
sum of
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(1) 100% of the stated liquidation amount of such Securities; and
(2) as determined by an "Independent Investment Banker," the sum
of the present values of the remaining scheduled payments of
Distributions, assuming that the Securities would otherwise be redeemed
on August 18, 2003, discounted to the date of Cash Merger Event Early
Redemption on a quarterly basis (assuming a 360-day year consisting of
twelve 30-day months) at the "Adjusted Treasury Rate,"
plus accumulated and unpaid distributions thereon to the date of the Cash Merger
Event Early Redemption.
"Moody's" shall mean Moody's Investors Service, Inc.
"New York Stock Exchange" shall mean the New York Stock Exchange,
Inc. or any successor thereto.
"Officers' Certificate" shall mean, when delivered by the Trust, a
certificate signed by a majority of the Regular Trustees of the Trust and, when
delivered by the Sponsor, a certificate signed by (A) the Chairman of the Board,
President or a Vice President of the Sponsor and (B) the Chief Financial
Officer, the Treasurer, Assistant Treasurer, Secretary or Assistant Secretary of
the Sponsor. Any Officers' Certificate delivered with respect to compliance with
a condition or covenant provided for in this Declaration shall include, where
applicable:
(i) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(ii) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(iii) 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
(iv) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
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"Over-allotment Option" shall mean any over-allotment option contained
in an underwriting agreement pursuant to which the PEPS Units are sold.
"Paying Agent" shall have the meaning specified in Section 3.8(h).
"Payment Amount" shall have the meaning specified in Section 7.2(c).
"PEPS Units" shall mean a security consisting of a unit comprised of
(A) a purchase contract under which the holder of the unit will purchase from
the Company, for $25 in cash, a certain number of shares of common stock, par
value $.01 per share, of the Company and (B) beneficial ownership of a Preferred
Security or Subordinated Deferrable Note, or in certain circumstances following
the occurrence of a Tax Event, the appropriate Applicable Ownership Interest of
the Treasury Portfolio.
"Person" shall mean 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.
"Pledge Agreement" shall mean the Pledge Agreement dated as of August
22, 2000 among the Company, the Collateral Agent, The Chase Manhattan Bank, as
Securities Intermediary, and the Purchase Contract Agent.
"Preferred Security" shall have the meaning specified in Section
7.1(a).
"Preferred Security Certificate" shall mean a definitive certificate in
fully registered form representing a Preferred Security, substantially in the
form of Exhibit A.
"Primary Treasury Dealer" shall mean a primary U.S. government
securities dealer in New York City.
"Property Account" shall have the meaning specified in Section 3.8(c)
"Property Trustee" shall mean the Trustee meeting the eligibility
requirements set forth in Section 6.3.
"Pro Rata" shall mean pro rata to each Holder according to the
aggregate liquidation amount of the Securities held by such Holder in relation
to the aggregate liquidation amount of all Securities outstanding.
"Purchase Contract Agent" shall mean The Bank of New York.
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"Purchase Contract Agreement" shall mean the Purchase Contract
Agreement dated as of August 22, 2000 between the Company and The Bank of New
York, as Purchase Contract Agent.
"Purchase Contract Settlement Date" shall mean August 18, 2003.
"Quorum" shall mean a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"Quotation Agent" shall mean (A) Morgan Stanley & Co. Incorporated and
any respective successor, provided that if Morgan Stanley & Co. Incorporated or
any respective successor ceases to be a Primary Treasury Dealer, the Sponsor
shall substitute another Primary Treasury Dealer therefor or (B) any other
Primary Treasury Dealer selected by the Sponsor.
"Redemption Amount" shall mean, for each Subordinated Deferrable Note,
the product of the principal amount of such Subordinated Deferrable Note and a
fraction, the numerator of which shall be the Treasury Portfolio Purchase Price
and the denominator of which shall be the Applicable Principal Amount.
"Redemption/Distribution Notice" shall have the meaning specified in
Section 7.4(a).
"Redemption Price" shall mean the amount for which the Securities will
be redeemed, which amount will equal, (i) in the case of a Cash Merger Event
Redemption, the Make-Whole Prize, and (ii) in the case of all other redemptions,
the lesser of (i) the redemption price paid by the Subordinated Deferrable Notes
Issuer to repay or redeem, in whole or in part, the Subordinated Deferrable
Notes held by the Trust plus an amount equal to accumulated and unpaid
Distributions on such Securities through the date of their redemption or (ii)
the amount received by the Trust in respect of the Subordinated Deferrable Notes
so repaid or redeemed.
"Reference Treasury Dealer" means, for the trust preferred securities,
each of Morgan Stanley & Co. Incorporated, Banc of America Securities LLC and
Donaldson, Lufkin & Jenrette Securities Corporation and their respective
successors; provided, however, that if any of the foregoing shall not be a
primary U.S. government securities dealer in New York City ( a "primary
treasury dealer"), the Sponsor shall substitute therefor another primary
treasury dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
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Reference Treasury Dealer and any date of Cash Merger Event Early Redemption,
the average, as determined by The Bank of New York, of the bid and asked prices
for the Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the trustee by such Reference Treasury
Dealer at 5:00 p.m. on the third Business Day preceding such date of redemption.
"Regular Trustee" shall mean any trustee of the Trust other than the
Property Trustee and the Delaware Trustee.
"Remarketing" shall mean the operation of the procedures for
remarketing specified in Section 7.13.
"Remarketed Securities" shall mean (i) so long as the Trust has not
been dissolved, the Preferred Securities or (ii) if the Trust has been
dissolved, the Subordinated Deferrable Notes.
"Remarketing Agent" shall mean Morgan Stanley & Co. Incorporated or if
the Remarketing Agent is removed or resigns, any successor remarketing agent
selected by the Sponsor.
"Remarketing Agreement" shall mean the Remarketing Agreement dated as
of August 22, 2000 among the Company, the Trust and the Remarketing Agent.
"Remarketing Date" shall mean the third Business Day preceding August
22, 2003.
"Remarketing Settlement Date" shall mean the date, if any, on which the
settlement of the Remarketed Securities has occurred through the normal
settlement procedures in effect at such time of the Depositary or any successor
Depositary.
"Reset Rate" shall mean the distribution rate per annum, as deter mined
by the Remarketing Agent, that results from the Remarketing pursuant to Section
7.13.
"Responsible Officer" shall mean, with respect to the Property Trustee,
any officer with direct responsibility for the administration of this
Declaration and also shall mean, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred due to that officer's
knowledge of and familiarity with the particular subject.
"Rule 3a-5" shall mean Rule 3a-5 under the Investment Company Act or
any successor rule thereunder.
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"S&P" shall mean Standard & Poor's Corporation.
"Scheduled Remarketing Settlement Date" shall mean the date, if any, on
which the settlement of the Remarketed Securities is scheduled to occur.
"Securities" shall mean the Common Securities and the Preferred
Securities.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"Security Registrar" shall have the meaning specified in Section
7.9(a)(iv).
"66 2/3% in Liquidation Amount" shall mean Holders of outstanding
Securities, voting together as a single class, or, as the context may require,
Holders of outstanding Preferred Securities voting separately as a class, who
are the record owners of 66 2/3% or more of the aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accumulated and unpaid Distributions to the date upon which the
voting percentages are determined) of all outstanding Securities or Preferred
Securities, as the case may be.
"Sponsor" shall mean CMS Energy Corporation, a Michigan corporation,
or any successor entity in a merger, consolidation, conversion, amalgamation or
replacement by or conveyance, transfer or lease of its properties substantially
as an entirety, in its capacity as sponsor of the Trust.
"Subordinated Deferrable Notes" shall mean the series of Subordinated
Deferrable Notes to be issued by the Subordinated Deferrable Notes Issuer under
the Indenture and to be purchased by the Trust and held by the Property Trustee.
"Subordinated Deferrable Notes Issuer" shall mean CMS Energy
Corporation, a Delaware corporation, or any successor entity in a merger,
consolidation, conversion, amalgamation or replacement by or conveyance,
transfer or lease of its properties substantially as an entirety, in its
capacity as issuer of the Subordinated Deferrable Notes under the Indenture.
"Successor Delaware Trustee" shall have the meaning specified in
Section 6.6(b).
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"Successor Entity" shall have the meaning specified in Section
3.15(b)(i).
"Successor Property Trustee" shall have the meaning specified in
Section 6.6(b).
"Successor Security" shall have the meaning specified in Section
3.15(b)(i)(B).
"Supermajority" shall have the meaning specified in Section 2.6(a)(ii).
"Tax Event" shall mean the receipt by the Sponsor and the Trust of an
opinion of a law firm having a nationally recognized tax practice, to the effect
that, as a result of any amendment to, change in or announced proposed change in
the laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative decision, pronouncement, judicial decision or action
interpreting or applying such laws or regulations, which amendment or change is
effective or which proposed change, pronouncement, action or decision is
announced on or after the Closing Date, there is more than an insubstantial
increase in the risk that (i) the Trust is, or within 90 days of the date of
such opinion will be, subject to United States federal income tax with respect
to income received or accrued on the Subordinated Deferrable Notes, (ii)
interest payable by the Subordinated Deferrable Notes Issuer on the Subordinated
Deferrable Notes is not, or within 90 days of the date of such opinion will not
be, deductible by the Subordinated Deferrable Notes Issuer, in whole or in part,
for United States federal income tax purposes, or (iii) the Trust is, or within
90 days of the date of such opinion will be, subject to more than a deminimis
amount of other taxes, duties or other governmental charges.
"Tax Event Redemption" shall mean that a Tax Event has occurred and is
continuing and the Subordinated Deferrable Notes have been called for redemption
pursuant to the Indenture.
"Tax Event Redemption Date" shall mean the date of the Tax Event
Redemption, if any, specified by the Subordinated Deferrable Notes Issuer.
"10% in Liquidation Amount" shall mean, except as provided by the Trust
Indenture Act, Holder(s) of outstanding Securities, voting together as a single
class, or, as the context may require, Holders of outstanding Preferred
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 accumulated and unpaid Distributions to the date
upon which the voting percentages
19
are determined) of all outstanding Securities of the relevant class.
"Termination Event" shall have the meaning set forth in Section 1.1 of
the Purchase Contract Agreement.
"Treasury PEPS Units" shall mean a PEPS Units with respect to which
Treasury Securities have been substituted for the Preferred Securities or
Applicable Ownership Interest of the Treasury Portfolio component, as
applicable.
"Treasury Portfolio" shall mean, with respect to the Applicable
Principal Amount of Subordinated Deferrable Notes, a portfolio of zero-coupon
U.S. treasury securities consisting of (i) principal or interest strips of U.S.
treasury securities that mature on or prior to the Purchase Contract Settlement
Date in an aggregate amount at maturity equal to the Applicable Principal Amount
and (ii) with respect to each scheduled interest payment date on the
Subordinated Deferrable Notes that occurs after the Tax Event Redemption Date,
principal or interest strips of U.S. treasury securities that mature on or prior
to such date in an aggregate amount at maturity equal to the aggregate interest
payment that would have been due on the Applicable Principal Amount of the
Subordinated Deferrable Notes on such date.
"Treasury Portfolio Purchase Price" shall mean the lowest aggregate
price quoted by a Primary Treasury Dealer, to the Quotation Agent on the third
Business Day preceding the Tax Event Redemption Date for the purchase of the
Treasury Portfolio for settlement the Tax Event Redemption Date.
"Treasury Regulations" shall mean the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Department of the Treasury, as such regulations may be amended from time
to time (including corresponding provisions of succeeding regulations).
"Treasury Securities" shall mean zero-coupon U.S. Treasury Securi ties
(CUSIP Number 912820BG1) with a principal amount at maturity equal to $1,000 and
maturing on August 15, 2003, the business day preceding the Purchase Contract
Settlement Date.
"Trust" shall have the meaning specified in the Recitals hereto.
"Trust Enforcement Event" in respect of the Securities shall mean that
an Indenture Event of Default has occurred and is continuing in respect of the
Subordinated Deferrable Notes.
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"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Trustee" or "Trustees" shall mean each Person that has signed this
Declaration as a trustee, so long as such Person continues in office in
accordance with the terms hereof, and all other Persons that from time to time
may 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.
"Two-Year Benchmark Treasury Rate" shall mean the bid side rate
displayed at 10:00 A.M., New York City time, on the third Business Day
immediately preceding the Purchase Contract Settlement Date for direct
obligations of the United States (which may be obligations traded on a
when-issued basis only) having a maturity comparable to the remaining term to
maturity of the Subordinated Deferrable Notes, as agreed upon by the Company and
the Remarketing Agent in the Telerate system (or if the Telerate system is (a)
no longer available on the third Business Day immediately preceding the Purchase
Contract Settlement Date or (b) in the opinion of the Remarketing Agent (after
consultation with the Company) no longer an appropriate system from which to
obtain such rate, such other nationally recognized quotation system as, in the
opinion of the Remarketing Agent (after consultation with the Company) is
appropriate. If such rate is not so displayed, the rate for the Two-Year
Benchmark Treasury Rate shall be, as calculated by the Remarketing Agent, the
yield to maturity for the Preferred Securities, expressed as a bond equivalent
on the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis, and computed by taking the arithmetic mean of the secondary market bid
rates, as of 10:30 A.M., New York City time, on the third Business Day
immediately preceding the Purchase Contract Settlement Date of three leading
United States government securities dealers selected by the Remarketing Agent
(after consultation with the Company) (which may include the Remarketing Agent
or an affiliate thereof).
"United States Person" shall mean a United States person for United
States federal income tax purposes.
"Underwriting Agreement" shall mean the Underwriting Agreement dated as
of August 16, 2000 among the Trust, the Sponsor and the underwriters named
therein.
21
ARTICLE 2: TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and, to the
extent applicable, shall be governed by such provisions.
(b) The Property Trustee shall be the only Trustee that is a trustee
for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
conflicts with the duties imposed by Sections 310 to 317, inclusive, of the
Trust Indenture Act, such imposed duties of the Trust Indenture Act shall
control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the Trust's classification as a grantor trust for United States
federal income tax purposes and shall not affect the nature of the Securities as
equity securities representing undivided beneficial interests in the assets of
the Trust.
Section 2.2 Lists of Holders of the Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Property Trustee a list of the names and addresses of the
Holders of the Securities in such form as the Property Trustee may reasonably
require ("List of Holders") (i) as of the record date relating to the payment of
any Distribution, at least one Business Day prior to the date for payment of
such Distribution, except while the Preferred Securities are represented by one
or more Global Securities, and (ii) at any other time, within 30 days of receipt
by the Trust of a written request from the Property Trustee for a List of
Holders as of a date no more than 15 days before such List of Holders is
provided to the Property Trustee. If at any time the List of Holders does not
differ from the most recent List of Holders provided to the Property Trustee by
the Sponsor and the Regular Trustees on behalf of the Trust, then neither the
Sponsor nor the Regular Trustees shall be obligated to deliver such List of
Holders. The Property Trustee shall preserve, in as current a form as is
reasonably practicable, all information contained in Lists of Holders provided
to it or that it receives in its capacity as Paying Agent (if acting in such
capacity); provided that the Property Trustee may destroy any List of Holders
previously provided to it on receipt of a new List of Holders.
22
(b) The Property Trustee shall comply with its obligations under, and
shall be entitled to the benefits of, Sections 311(a), 311(b) and 312(b) of the
Trust Indenture Act.
Section 2.3 Reports by the Property Trustee.
Within 60 days after June 15 of each year (commencing with the year
of the first anniversary of the issuance of the Preferred Securities), the
Property Trustee shall provide to the Holders of the Preferred Securities such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Property Trustee also shall comply with the requirements of Section 313(d)
of the Trust Indenture Act. The Sponsor shall promptly notify the Property
Trustee when any Preferred Securities are listed for trading on any stock
exchange and any delisting thereof.
Section 2.4 Periodic Reports to the Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
Compliance certificates required by Section 314(a)(4) of the Trust Indenture
Act shall be delivered to the Property Trustee annually on or before 120 days
after the end of each fiscal year of the Sponsor.
Section 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
Section 2.6 Trust Enforcement Events; Waiver.
(a) The Holders of a Majority in Liquidation Amount of the Preferred
Securities may waive, by vote or written consent, on behalf of the Holders of
all of the Preferred Securities, any past Trust Enforcement Event in respect of
the Preferred Securities and its consequences, provided that if the underlying
Indenture Event of Default:
(i) is not waivable under the Indenture, then the Trust
23
Enforcement Event under this Declaration also shall not be waivable;
and
(ii) requires the vote or consent of the holders of greater than a
majority in principal amount of the Subordinated Deferrable Notes (a
"Supermajority") to be waived under the Indenture, the related Trust
Enforcement Event under this Declaration only may be waived by the
vote or written consent of the Holders of at least the same
Supermajority in aggregate stated liquidation amount of the Preferred
Securities outstanding.
The foregoing provisions of this Section 2.6 shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act, and Section 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
Trust Enforcement Event in respect of the Preferred Securities shall be deemed
to have been cured for every purpose of this Declaration and the Preferred
Securities, but no such waiver shall extend to any subsequent or other Trust
Enforcement Event with respect to the Preferred Securities or impair any right
consequent thereon. Any waiver by the Holders of the Preferred Securities of a
Trust Enforcement Event with respect to the Preferred Securities also shall be
deemed to constitute a waiver by the Holders of the Common Securities of any
such Trust Enforcement Event with respect to the Common Securities for all
purposes of this Declaration without any further act, vote or consent of the
Holders of the Common Securities.
(b) The Holders of the Common Securities may waive, by vote or written
consent, any past Trust Enforcement Event in respect of the Common Securities
and its consequences, provided that if the underlying Indenture Event of Default
is not waivable under the Indenture, then, except where the Holders of the
Common Securities have been deemed to have waived such Trust Enforcement as
provided below in this Section 2.6(b), the related Trust Enforcement Event under
this Declaration also shall not be waivable. The Holders of the Common
Securities shall be deemed to have waived any and all Trust Enforcement Events
in respect of the Common Securities and the consequences thereof until all Trust
Enforcement Events in respect of the Preferred Securities have been cured,
waived or otherwise eliminated. Until all Trust Enforcement Events in respect
of the Preferred Securities have been so cured, waived or otherwise eliminated,
the Property Trustee shall be deemed to be acting solely on behalf of the
Holders of the Preferred Securities, and only the Holders of the Preferred
Securities shall have the right to direct the Property Trustee. The foregoing
provisions of this Section 2.6(b) shall be in lieu of Sections 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act, and Sections 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act are hereby expressly excluded from this
24
Declaration and the Securities, as permitted by the Trust Indenture Act. Subject
to the foregoing provisions of this Section 2.6(b), upon such cure, waiver or
other elimination, any Trust Enforcement Event in respect of the Common
Securities shall be deemed to have been cured for every purpose of this
Declaration and the Common Securities, but no such waiver shall extend to any
subsequent or other Trust Enforcement Event with respect to the Common
Securities or impair any right consequent thereon.
(c) A waiver of an Indenture Event of Default under the Indenture by
the Property Trustee at the direction of the Holders of the Preferred Securities
shall constitute a waiver of the corresponding Trust Enforcement Event under
this Declaration. Any such waiver by the Holders of the Preferred Securities
also shall be deemed to constitute a waiver by the Holders of the Common
Securities of any such Trust Enforcement Event 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. The foregoing provisions of
this Section 2.6(c) shall be in lieu of Section 316(a)(1)(B) of the Trust
Indenture Act, and Section 316(a)(1)(B) of the Trust Indenture Act is hereby
expressly excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act.
Section 2.7 Trust Enforcement Event; Notice.
(a) Within 90 days after the occurrence of a Trust Enforcement Event
actually known to a Responsible Officer of the Property Trustee, the Property
Trustee shall transmit by mail, first class postage prepaid, to the Holders of
the Securities, notice of such Trust Enforcement Event, unless such Trust
Enforcement Event has 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 Subordinated Deferrable Notes, the Property Trustee
shall be protected in withholding such notice if and so long as a Responsible
Officer of the Property Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of any
Trust Enforcement Event except for:
(i) a default under Section 501(1) and (2) of the Indenture; or
(ii) any 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 this Declaration
shall have actual knowledge.
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ARTICLE 3: ORGANIZATION
Section 3.1 Name and Organization.
The Trust hereby continued is named "CMS Energy Trust III," as
such name may be modified from time to time by the Regular Trustees following
written notice to the Holders of the Securities. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable by the
Regular Trustees.
Section 3.2 Office.
The address of the principal office of the Trust is c/o CMS Energy
Corporation, Fairlane Plaza, Suite 1100, 330 Town Center Drive, Dearborn,
Michigan 48126. On ten Business Days' written notice to the Holders of the
Securities, the Regular Trustees may designate another principal office.
Section 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue
and sell the Securities, (b) to use the gross proceeds from such sale to acquire
the Subordinated Deferrable Notes and (c) except as otherwise limited herein, to
engage in only those other activities necessary or incidental thereto. The Trust
shall not borrow money, issue debt, reinvest proceeds derived from investments,
pledge any of its assets or otherwise undertake (or permit to be undertaken) any
activity that would cause the Trust not to be classified as a grantor trust for
United States federal income tax purposes.
By the acceptance of this Trust, none of the Trustees, the
Sponsor, the Holders of the Preferred Securities or the Common Securities or the
Beneficial Owners of the Preferred Securities will take any position that is
contrary to the classification of the Trust as a grantor trust for United State
federal income tax purposes.
Section 3.4 Authority.
(a) Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Regular Trustees shall have
exclusive authority to carry out the purposes of the Trust. Any action taken by
the Regular Trustees in accordance with their powers shall constitute the act of
and shall serve to bind the Trust, and any action taken by the Property Trustee
in accordance with its powers shall constitute the act of and shall serve to
bind the Trust. In dealing with
26
the Trustees acting on behalf of the Trust, no Person shall be required to
inquire into the authority of the Trustees to bind the Trust. Persons dealing
with the Trust are entitled to rely conclusively on the power and authority of
the Trustees as set forth in this Declaration.
(b) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by or with the consent of any one such Regular Trustee.
(c) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee may delegate to any other natural person over the age of 21, by power of
attorney consistent with applicable law, his or her power for the purposes of
signing any documents that the Regular Trustees have power and authority to
cause the Trust to execute pursuant to Section 3.6.
Section 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Subordinated
Deferrable Notes and the Property Account or as otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders of the Securities shall not have legal title to any part of
the assets of the Trust but shall have undivided beneficial ownership interests
in the assets of the Trust.
Section 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Securities in accordance with this
Declaration; provided that the Trust may issue no more than one series of
Preferred Securities and no more than one series of Common Securities; and
provided further that there shall be no interests in the Trust other than the
Securities, and the issuance of the Securities shall be limited to a one-time,
simultaneous issuance of both Preferred Securities and Common Securities on the
Closing Date, subject to the issuance of additional Securities pursuant to the
exercise of any Over-allotment Option;
(b) to acquire the Subordinated Deferrable Notes with the proceeds of
the sale of the Securities; provided that the Regular Trustees shall cause legal
title to the Subordinated Deferrable Notes to be held of record in the name of
the Property Trustee for the benefit of the Holders of the Securities;
(c) to give the Sponsor and the Property Trustee prompt written notice
of
27
the occurrence of a Tax Event; provided that the Regular Trustees shall consult
with the Sponsor and the Property Trustee before taking or refraining from
taking any action in relation to any such Tax Event;
(d) to establish a record date with respect to all actions to be taken
hereunder that require a record date to be established, including and with
respect to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of the Securities as to such actions and applicable
record dates;
(e) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of this Declaration;
(f) 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;
(g) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants to conduct only those services that the Regular Trustees have
authority to conduct directly, and to pay reasonable compensation for such
services, provided that any Person so employed or engaged is a United States
Person;
(h) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(i) to give to the Property Trustee the certificate required by
Section 314(a)(4) of the Trust Indenture Act, which certificate may be executed
by any Regular Trustee;
(j) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(k) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(l) to take all action that may be necessary or appropriate for the
preservation and continuation of the Trust's valid existence, rights, franchise
and privileges as a statutory business trust under the laws of the State of
Delaware and of
28
each other jurisdiction in which such existence is necessary to protect the
limited liability of the Holders of the Securities or to enable the Trust to
effect the purposes for which it was created;
(m) to take any action not inconsistent with applicable law that the
Regular Trustees determine in their discretion to be necessary or desirable in
carrying out the purposes and functions of the Trust as set forth in Section 3
or the activities of the Trust as set forth in this Section 3.6, including:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified as a grantor trust for
United States federal income tax purposes; and
(iii) cooperating with the Subordinated Deferrable Notes Issuer
to ensure that the Subordinated Deferrable Notes will be treated as
indebtedness of the Subordinated Deferrable Notes Issuer for United
States federal income tax purposes;
(n) 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;
(o) to prepare, execute and file a certificate of cancellation
pursuant to Section 8.1(b);
(p) in connection with the issuance of the Preferred Securities, to
execute, deliver and perform the Depositary Agreement on behalf of the Trust;
(q) if and to the extent that the Sponsor on behalf of the Trust has
not already done so, to cause the Trust to enter into the Underwriting Agreement
and/or such other agreements and arrangements as may be necessary or desirable
in connection with the sale of the Preferred Securities to the initial
purchasers thereof and the consummation thereof, and to take all action, and
exercise all discretion, as may be necessary or desirable in connection with the
consummation thereof; and
(r) 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.
29
The Regular Trustees shall exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall have no power
to, and shall not, take any action that is inconsistent with the purposes and
functions of the Trust set forth in Section 3.3.
Subject to this Section 3.6, the Regular 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 Regular Trustees pursuant to this Section
3.6 shall be reimbursed by the Subordinated Deferrable Notes Issuer.
Section 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the Property
Trustee) shall cause the Trust not to, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust shall not
and the Trustees (including the Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust in connection with
its ownership of the Subordinated Deferrable Notes, but the Property
Trustee shall distribute all such proceeds to the Holders of the
Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess property for any purpose other than a Trust purpose;
(iv) make any loans or incur any indebtedness;
(v) possess any power or otherwise act in such a way as to vary
the Trust's assets;
(vi) possess any power or otherwise act in such a way as to
vary the terms of the Securities in any way whatsoever (except to the
extent expressly authorized in this Declaration or by the terms of the
Securities);
(vii) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities;
(viii) other than as provided in this Declaration, (A) direct the
time, method and place of exercising any trust or power conferred upon
the Indenture Trustee with respect to the Subordinated Deferrable
Notes, (B)
30
waive any past default that is waivable under the Indenture, (C)
exercise a right to rescind or annul any declaration that the principal
of all the Subordinated Deferrable Notes shall be due and payable or
(D) consent to any amendment, modification or termination of the
Indenture or the Subordinated Deferrable Notes where such consent is
required, unless the Trust has received an opinion of counsel to the
effect that such modification will not cause more than an insubstantial
increase in the risk that the Trust will not be classified as a grantor
trust for United States federal income tax purposes;
(ix) take any action inconsistent with the status of the Trust as
grantor trust for United States federal income tax purposes;
(x) revoke any action previously authorized or approved by vote
of the Holders of the Preferred Securities; or
(xi) after the date hereof, enter into any contract or agreement
(other than any depositary agreement or any agreement with any
securities exchange or automated quotation system) that does not
expressly provide that the Holders of Preferred Securities, in their
capacities as such, have limited liability (in accordance with the
provisions of the Business Trust Act) for the liabilities and
obligations of the Trust, which express provision shall be in
substantially the following form:
The Holders of the Preferred Securities, in their capacities as
such, shall not be personally liable for any liabilities or
obligations of the Trust arising out of this Agreement, and the
parties hereto hereby agree that the Holders of the Preferred
Securities, in their capacities as such, shall be entitled to the
same limitation of personal liability extended to stockholders of
private corporations for profit organized under the General
Corporation Law of the State of Delaware.
Section 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Subordinated Deferrable Notes shall be owned
by and held of record in the name of the Property Trustee in trust for the
benefit of the Trust and the Holders of the Securities. The right, title and
interest of the Property Trustee to the Subordinated Deferrable Notes shall vest
automatically in each Person that hereafter may be appointed as Property Trustee
in accordance with Section 6.6. To the fullest extent permitted by law, such
vesting and cessation of title shall be effective whether or not conveyancing
documents with regard to the Subordinated
31
Deferrable Notes have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Subordinated Deferrable Notes to the Regular Trustees nor to the
Delaware Trustee (if the Property Trustee does not also act as Delaware
Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Property Account") in the name of and under the exclusive
control of the Property Trustee on behalf of the Holders of the
Securities and, upon the receipt of payments of funds made in respect
of the Subordinated Deferrable Notes, deposit such funds into the
Property Account and make payments to the Holders of the Securities
from the Property Account in accordance with Section 7.2. Funds in the
Property Account shall be held uninvested until disbursed in accordance
with this Declaration. The Property Account shall be an account that is
maintained with a banking institution, the rating on whose long-term
unsecured indebtedness is at least equal to the rating assigned to the
Company's subordinated notes by a "nationally recognized statistical
rating organization" within the meaning of Rule 436(g)(2) under the
Securities Act;
(ii) engage in such ministerial activities as shall be necessary
or appropriate to effect the redemption of the Securities to the extent
the Subor dinated Deferrable Notes are redeemed or mature;
(iii) upon written direction by the Sponsor to dissolve the Trust,
to engage in such ministerial activities as shall be necessary or
appropriate to effect the distribution of the Subordinated Deferrable
Notes to the Holders of the Securities in exchange for the Securities;
and
(iv) be a United States Person.
(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) The Property Trustee shall take any Legal Action that arises out of
or in connection with (i) a Trust Enforcement Event of which a Responsible
Officer of the Property Trustee has actual knowledge or (ii) the Property
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act; provided that if a Trust Enforcement Event has occurred and is continuing
and such event is attributable to the failure of the Subordinated Deferrable
Notes Issuer to make payments on the Subordinated Deferrable Notes on the date
such interest or principal is otherwise
32
Section 3.3, and the Property Trustee shall have no power to, and shall not,
take any action that is inconsistent with the purposes and functions of the
Trust set out in Section 3.3.
Section 3.9 Certain Duties and Responsibilities of the Property
Trustee.
(a) The Property Trustee, before the occurrence of any Trust
Enforcement Event and after the cure or waiver of all Trust Enforcement Events
that may have occurred, shall undertake to perform only such duties as are
specifically set forth in this Declaration, and no implied covenants shall be
read into this Declaration against the Property Trustee. If a Trust Enforcement
Event has occurred (that has not been cured or waived pursuant to Section 2.6)
of which a Responsible Officer of the Property Trustee has actual knowledge, the
Property Trustee shall exercise such of the rights and powers vested in it by
this Declaration and shall use the same degree of care and skill in its 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 a Trust Enforcement Event and
after the cure or waiver of all such Trust Enforcement Events that may
have occurred:
(A) the duties and obligations of the Property
Trustee shall be determined solely by the express provisions
of this Declaration, 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 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; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Property
Trustee, the Property Trustee shall be under a duty to examine
such certificates or
33
opinions to determine whether or not they conform to the
requirements of this Declaration (but need not confirm or
investigate the accuracy of mathematical calculations or
other facts stated therein);
(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 has been proven 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 without negligence, 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 has 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 Subordinated
Deferrable Notes and the Property Account shall be to deal with such
property in a similar manner as the Property Trustee deals with similar
property for its own account, subject to the protections and
limitations on liability afforded to the Property Trustee under this
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 Subordi nated Deferrable Notes or the payment of any taxes or
assessments levied thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any
interest on any money received by it except as it otherwise may agree
with the Sponsor.
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Money held by the Property Trustee need not be segregated from other
funds held by it except in relation to the Property Account maintained
by the Property Trustee pursuant to Section 3.8(c)(i) and except to
the extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Regular 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 Regular 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 contemplated by this
Declaration shall 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 request, in the absence of bad faith on its part, and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor.
(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 registration thereof.
(v) The Property Trustee may consult with counsel of its
choice or other experts, and the advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope of
such experts' area of expertise shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion. Such counsel may be counsel to the Sponsor or any of
its Affiliates and may include any of its employees. The
35
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 of Securities, unless such
Holder of Securities has provided to the Property Trustee security and
indemnity, reasonably satisfactory to the Property Trustee, against
the costs, expenses (including attorneys' fees and expenses and the
expenses of the Property Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such request
or direction, including such reasonable advances as may be requested by
the Property Trustee; provided that nothing contained in this Section
3.10(a) shall be taken to relieve the Property Trustee, upon the
occurrence of an Indenture 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
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 sees fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Sponsor,
personally or by agent or attorney at the sole cost of the Sponsor and
shall incur no liability or additional liability of any kind by reason
of such inquiry or investigation.
(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, provided that any
such action (other than ministerial action) executed or performed by
such agent or attorney is executed or performed by an agent or an
attorney that is a United States Person, 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
36
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 evidenced
conclusively 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 (A) may request instructions from the
Holders of the Securities, which instructions only may 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 this
Declaration in respect of such remedy, right or action, (B) may refrain
from enforcing such remedy or right or taking such other action until
such instructions are received and (C) shall be protected in
conclusively relying on or acting in 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.
(xii) The Property Trustee shall not be liable for any action
taken, suffered or omitted to be taken by it without negligence, in
good faith and reasonably believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Declaration.
(xiii) the Property Trustee shall not be deemed to have notice
of any Indenture Event of Default or Trust Enforcement Event unless a
Responsible Officer of the Property Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a
default is received by the Property Trustee at the Corporate Trust
Office of the Property Trustee, and such notice references the Trust
Preferred Securities and 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
37
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 6.2, the Delaware Trustee shall not be entitled to exercise any
powers of, nor shall the Delaware Trustee have any of the duties and
responsibilities of, the trustees described in this Declaration. Except as set
forth in Section 6.2, the Delaware Trustee shall be a Trustee for the sole and
limited purpose of fulfilling the require ments of Section 3807(a) of the
Business Trust Act and shall be a United States Person. If the Property Trustee,
meeting the requirements of Section 6.2, also acts as Delaware Trustee, this
Section 3.11 shall not apply.
Section 3.12 Execution of Documents.
Except as otherwise required by the Business Trust Act or
applicable law, any Regular Trustee is authorized to execute on behalf of the
Trust any documents that the Regular Trustees have the power and authority to
execute pursuant to Section 3.6.
Section 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities
shall be taken as the statements of the Sponsor, and the Trustees do not assume
any responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Declaration, the Securities, the Subordinated Deferrable Notes or the Indenture.
Section 3.14 Duration of Trust.
The Trust shall exist until dissolved pursuant to the
provisions of Article 8 hereof.
Section 3.15 Mergers.
(a) The Trust may not consolidate with, convert into, amalgamate or
merge with or into, be replaced by or convey, transfer or lease its properties
and assets substantially as an entirety to any corporation or other body, except
as described in Section 3.15(b) and (c) or Section 8.2.
(b) At the request of the Sponsor and with the consent of the Regular
Trustees or, if there are more than two, a majority of the Regular Trustees and
without the consent of the Holders of the Preferred Securities, the Delaware
Trustee
38
or the Property Trustee, the Trust may consolidate with, convert into,
amalgamate or merge with or into, be replaced by or convey, transfer or lease
its properties substantially as an entirety to a trust organized as such under
the laws of any state; provided that:
(i) if the Trust is not the successor entity, such successor
entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the
Trust with respect to the Securities; or
(B) substitutes for the Securities other securities
having substantially the same terms as the
Securities (the "Successor Securities"), so
long as such Successor Securities rank the same
as the Securities with respect to Distributions
and payments upon liquidation, redemption and
otherwise;
(ii) the Subordinated Deferrable Notes Issuer expressly
appoints a trustee of such Successor Entity that possesses the same
powers and duties as the Property Trustee as the holder of the
Subordinated Deferrable Notes;
(iii) the Preferred Securities or any Successor Securities are
or, upon notification of issuance will be, listed on any national
securities ex change or with any other organization on which the
Preferred Securities are then listed or quoted;
(iv) such consolidation, conversion, amalgamation, merger,
replacement, conveyance, transfer or lease does not cause the Preferred
Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization;
(v) such consolidation, conversion, amalgamation, merger,
replacement, conveyance, transfer or lease does not adversely affect
the rights, preferences and privileges of the Holders of the Preferred
Securities (including any Successor Securities) in any material
respect;
(vi) such Successor Entity has a purpose substantially
identical to that of the Trust;
39
(vii) prior to such consolidation, conversion, amalgamation,
merger, replacement, conveyance, transfer or lease, the Sponsor has
received an opinion of independent counsel to the Trust experienced in
such matters to the effect that:
(A) such consolidation, conversion, amalgamation,
merger, 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;
(B) following such consolidation, conversion,
amalgamation, merger, replacement, conveyance,
transfer or lease, neither the Trust nor such
Successor Entity will be required to register as
an Investment Company under the Investment
Company Act; and
(C) following such consolidation, conversion,
amalgamation or merger, replacement,
conveyance, transfer or lease, the Trust (or
such Successor Entity) will continue to be
classified as a grantor trust for United
States federal income tax purposes;
(viii) the Sponsor or any permitted successor or assignee owns
all of the common securities of such Successor Entity and guarantees
the obligations of such Successor Entity under the Successor
Securities, at least to the extent provided by the Guarantee; and
(ix) such Successor Entity expressly assumes all of the
obligations of the Trust.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in aggregate liquidation amount of the
Securities, consolidate with, convert into, amalgamate or merge with or into, be
replaced by or convey, transfer or lease its properties and assets substantially
as an entirety to, any other entity or permit any other entity to consolidate
with, amalgamate, merge with or into, or replace it, if such consolidation,
conversion, amalgamation, merger, replacement, conveyance, transfer or lease
would cause the Trust or any successor Entity to be classified as other than a
grantor trust for United States federal income tax purposes or would cause each
Holder of Securities not to be treated as owning an undivided beneficial
ownership interest in the Subordinated Deferrable Notes.
40
Section 3.16 Compensation and Reimbursement.
The Sponsor agrees to pay each of the Trustees from time to
time such compensation for all services rendered by such Trustee hereunder as
the Sponsor and such Trustee may agree upon from time to time (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust). To the fullest extent permitted
by law the parties intend that Section 3561 of Title 12 of the Delaware Code
shall not apply to the Trust and that compensation paid pursuant to this
Section 3.16 not be subject to review by any court under Section 3560 of Title
12 of the Delaware Code.
Section 3.17 Property Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other similar judicial proceeding relative to the Trust or any other obligor
upon the Securities or the property of the Trust or of such other obligor or
their creditors, the Property Trustee (irrespective of whether any Distributions
on the Securities are then due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee has
made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any Distributions
owing and unpaid in respect of the Securities (or, if the Securities are
original issue discount securities, such portion of the liquidation amount as
may be specified in the terms of such securities) and to file such other papers
or documents as may be necessary or advisable in order to have the claims of the
Property Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Property Trustee, its agents and counsel) and
of the Holders of the Securities allowed in such judicial proceeding; and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities to make such payments to the Property Trustee and, in
the event the Property Trustee consents to the making of such payments directly
to the Holders, to pay to the Property Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Property
Trustee, its agents and counsel, and any other amounts due the Property Trustee.
41
Nothing herein contained shall be deemed to authorize the Property
Trustee to authorize or consent to or accept or adopt, on behalf of any Holder
of Securities, any plan of reorganization, arrangement, adjustment or
compensation affecting the Securities or the rights of any Holder thereof or to
authorize the Property Trustee to vote in respect of the claim of any Holder of
Securities in any such proceeding.
Section 3.18 Registration Statement and Related Matters.
In accordance with the Original Declaration, the Sponsor was
authorized (a) to prepare and file with the Commission and execute, in each
case on behalf of the Trust, (i) a Registration Statement on Form S-3
(Registration Nos. 333-68937 and 333-68937-01) (the "1933 Act Registration
Statement"), including any pre-effective or post-effective amendments thereto,
relating to the registration under the Securities Act of the Preferred
Securities and certain other securities of the Sponsor and (ii) if the Sponsor
deemed it desirable, a Registration Statement on Form 8-A (the "1934 Act
Registration Statement"), including all pre-effective and post-effective
amendments thereto, relating to the registration of the Preferred Securities
under Section 12 of the Exchange Act; (b) if the Sponsor deemed it desirable, to
prepare and file with New York Stock Exchange, Inc. or any other automated
quotation system, exchange or over-the-counter market (collectively, the
"Exchanges") and execute on behalf of the Trust a listing application or
applications and all other applications, statements, certificates, agreements
and other instruments as shall be necessary or desirable to cause the Preferred
Securities to be listed on any Exchange; (c) to prepare and file and execute on
behalf of the Trust such applications, reports, surety bonds, irrevocable
consents, appointments of attorney for service of process and other papers and
documents as the Sponsor, on behalf of the Trust, deemed necessary or desirable
to register the Preferred Securities under the securities or "Blue Sky" laws of
such jurisdictions as the Sponsor, on behalf of the Trust, deemed necessary or
desirable; (d) to negotiate the terms of and execute on behalf of the Trust the
Underwriting Agreement; and (e) to execute and deliver on behalf of the Trust
letters or documents to, or instruments for filing with, the Clearing Agency
relating to the Preferred Securities. In the event that any filing referred to
in clauses (a)-(c) above is required by the rules and regulations of the
Commission, any Exchange, the National Association of Securities Dealers, Inc.
or state securities or blue sky laws, to be executed on behalf of the Trust by
the Regular Trustees, the Regular Trustees, in their capacities as Trustee of
the Trust, are hereby authorized to join in any such filing and to execute on
behalf of the Trust any and all of the foregoing. In connection with all of the
foregoing, each Regular Trustee, solely in its capacity as Trustee of the Trust,
has constituted and appointed, and hereby confirms the appointment of Alan M.
Wright and Thomas A. McNish, and each of them, as his, her or its, as the case
may be, true and lawful attorneys-in-fact, and agents, with full power of
substitution and resubstitution, for such Trustee or in such Trustee's name,
place and stead, in any and all capacities, to sign any and all amendments
(including
42
post-effective amendments) to the 1933 Act Registration Statement and the 1934
Act Registration Statement and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as such Trustee might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof. Notwithstanding anything in
this Section 3.18 to the contrary, no Foreign Person (acting in its capacity as
attorney-in-fact or agent of any Foreign Person) shall be authorized to take or
perform any action on behalf of the Trust pursuant to this Section 3.18 at any
time on or after the Closing Date.
Section 3.19 Books and Records.
The books and records of the Trust will be maintained at the
principal office of the Trust and will be open for inspection by each Holder of
Preferred Securities or any authorized representative of such Holder for any
purpose reason ably related to the Holder's interest in the Trust during normal
business hours.
ARTICLE 4: THE SPONSOR
Section 4.1 Responsibilities of the Sponsor.
In connection with the sale and issuance of the Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare, execute and file with the Commission, on behalf of the
Trust, a registration statement on Form S-3 in relation to the Preferred
Securities, including any amendments or supplements thereto, and to take any
other action relating to the registration and sale of the Preferred Securities
under federal and state securities laws;
(b) if necessary, to determine the states in which to take appropriate
action to qualify or register for sale all or part of the PEPS Units and to do
any and all such acts, other than actions that must be taken by the Trust, and
advise the Trust of actions it must take; to prepare, execute and file, on
behalf of the Trust, any documents it deems necessary or advisable in order to
comply with the applicable laws of any such states; and to prepare, execute and
file, on behalf of the Trust, any such documents or take any acts determined by
it to be necessary in order to qualify or register all or part of the PEPS Units
in any state in which it has determined to qualify or register such PEPS Units
for sale;
43
(c) if necessary, to prepare, execute and file on behalf of the Trust,
an application to the New York Stock Exchange or any other national stock
exchange or the NASDAQ National Market for listing upon notice of issuance of
any Preferred Securities;
(d) if necessary, to prepare, execute and file with the Commission, on
behalf of the Trust, a registration statement on Form 8-A relating to the
registration of the Preferred Securities under Section 12 of the Exchange Act,
including any amendments thereto; and
(e) to negotiate the terms of, and execute and enter into, an
Underwriting Agreement providing for the sale of the PEPS Units and a
Remarketing Agreement providing for the Remarketing.
Section 4.2 Indemnification and Expenses of the Trustees.
To the fullest extent permitted by law, the Sponsor, in its
capacity as Subordinated Deferrable Notes Issuer, agrees to indemnify the
Regular Trustees, the Property Trustee and the Delaware Trustee for, and to hold
each of them harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Regular Trustees, the Property
Trustee or the Delaware Trustee, as the case may be, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending any of them against any
claim (whether asserted by the Sponsor, a Holder or any other Person) or
liability in connection with the exercise or performance of any of their
respective powers or duties hereunder. The provisions of this Section 4.2 shall
survive the resignation or removal of the Regular Trustees, the Delaware Trustee
or the Property Trustee and the termination of this Declaration.
ARTICLE 5: THE HOLDERS OF THE COMMON SECURITIES
Section 5.1 Subordinated Deferrable Notes Issuer's Purchase of the
Common Securities.
On the Closing Date, the Subordinated Deferrable Notes Issuer
shall purchase all of the Common Securities issued by the Trust, in an aggregate
liquidation amount equal to at least three percent of the total capital of the
Trust, at such time as the Preferred Securities are sold and issued. If any
additional Preferred Securities are issued pursuant to the exercise of any
Over-allotment Option, then the Subordinated Deferrable Notes Issuer shall
purchase, on the date of such issuance, an amount of
44
additional Common Securities such that the aggregate number of Common
Securities held by the Subordinated Deferrable Notes Issuer, upon such purchase,
will equal at least three percent of the total capital of the Trust.
The aggregate stated liquidation amount of the Common
Securities outstanding at any time shall not be less than three percent of the
total capital of the Trust.
Section 5.2 Covenants of the Subordinated Deferrable Notes Issuer.
For so long as the Preferred Securities remain outstanding,
the Subordinated Deferrable Notes Issuer shall covenant (i) to maintain,
directly or indirectly, 100% ownership of the Common Securities, (ii) to cause
the Trust to remain a statutory business trust and not to voluntarily dissolve,
wind up, liquidate or be terminated, except as permitted by this Declaration,
(iii) to use its commercially reasonable efforts to ensure that the Trust will
not be an Investment Company required to be registered under the Investment
Company Act and (iv) not to take any action that would be reasonably likely to
cause the Trust to be classified as an association or a publicly traded
partnership taxable as a corporation for United States federal income tax
purposes.
Section 5.3 Holder of the Common Securities.
Each Holder of the Common Securities shall at all times hold
the Common Securities in its individual capacity on its own behalf and shall
not, in its capacity as a Holder of the Common Securities, be under (or subject
to) the control or direction of any Foreign Person (pursuant to a contractual
arrangement or other wise) other than by virtue of such Foreign Person's direct
or indirect stock owner ship, if any, of the Holder of Common Securities.
Notwithstanding anything in this Declaration to the contrary, each Holder of the
Common Securities shall at all times be a United States Person and shall be
authorized to give any direction hereunder with respect to the Trust as shall be
necessary for the Trust not to be considered a foreign trust for United States
Federal income tax purposes.
Section 5.4 Exchanges.
(a) If at any time the Subordinated Deferrable Notes Issuer or any of
its Affiliates (in either case, a "Issuer Affiliated Holder") is the Holder of
any Preferred Securities, such Issuer Affiliated Holder shall have the right to
deliver to the Property Trustee all or such portion of its Preferred Securities
as it elects and receive, in exchange therefor, Subordinated Deferrable Notes in
an aggregate principal amount equal to the aggregate stated liquidation amount
of, with an interest rate identical to the distribution rate of, and accrued and
unpaid interest equal to accumulated and unpaid Distributions on, such Preferred
Securities. Such election (i) shall be
45
exercisable effective on any Distribution payment date by such Issuer
Affiliated Holder delivering to the Property Trustee a written notice of such
election specifying the aggregate liquidation amount of the Preferred Securities
with respect to which such election is being made and the Distribution payment
date on which such exchange shall occur, which Distribution payment date shall
be not less than ten Business Days after the date of receipt by the Property
Trustee of such election notice and (ii) shall be conditioned upon such Issuer
Affiliated Holder having delivered or caused to be delivered to the Property
Trustee or its designee the Preferred Securities which are the subject of such
election by 10:00 A.M. New York time, on the Distribution payment date on which
such exchange is to occur. After the exchange, such Preferred Securities will
be canceled and will no longer be deemed to be outstanding and all rights of the
Subordinated Deferrable Notes Issuer or its Affiliate(s) with respect to such
Preferred Securities will cease.
(b) In the case of an exchange described in Section 5.4(a), the Trust
will, on the date of such exchange, exchange Subordinated Deferrable Notes
having a principal amount equal to a proportional amount of the aggregate
liquidation amount of the outstanding Common Securities based on the ratio of
the aggregate liquidation amount of the Preferred Securities exchanged pursuant
to Section 5.4(a) divided by the aggregate liquidation amount of the Preferred
Securities outstanding immediately prior to such exchange, for such proportional
amount of Common Securities held by the Subordinated Deferrable Notes Issuer
(which contemporaneously shall be canceled and no longer be deemed to be
outstanding); provided, that the Subordinated Deferrable Notes Issuer delivers
or causes to be delivered to the Property Trustee or its designee the required
amount of Common Securities to be exchanged by 10:00 A.M., New York City time,
on the Distribution payment date on which such exchange is to occur.
ARTICLE 6: THE TRUSTEES
Section 6.1 Number of Trustees.
The number of Trustees initially shall be four, and:
(a) at any time before the issuance of any Securities, the Sponsor may
increase or decrease the number of Trustees by written instrument; and
(b) after the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the Holders of the Common Securities at a
meeting of the Holders of the Common Securities or by written consent without
prior notice in
46
lieu of such meeting;
provided that the number of Trustees shall be at least three; and provided
further that: (i) the Delaware Trustee, in the case of a natural person, shall
be a person who is a resident of the State of Delaware or that, if not a natural
person, is an entity that has its principal place of business in the State of
Delaware and otherwise meets the requirements of applicable law; (ii) at least a
half of the Trustees shall be employees or officers of, or are affiliates of,
the Sponsor; (iii) 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 Property Trustee also may serve as Delaware Trustee if it meets
the applicable requirements; (iv) each Trustee shall be a United States Person;
and (v) each Trustee, or any delegee of, any Trustee, shall at all times act as
Trustee in its individual capacity on its own behalf and will not, at any time,
in its capacity as Trustee, be under (or subject to) the control or direction of
any Foreign Person (pursuant to a contractual arrangement or otherwise).
Section 6.2 Delaware Trustee; Eligibility.
If required by the Business Trust Act, one Trustee (which may
be the Property Trustee) (the "Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity that 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 also shall be the Delaware Trustee and
Section 3.11 shall have no application.
Section 6.3 Property Trustee; Eligibility.
(a) There shall be at all times one Trustee (which may be the Delaware
Trustee) that shall act as Property Trustee that shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation that is a United States Person organized
and doing business under the law of the United States of America or any
state or territory thereof or of the District of Columbia, or a
corporation or other Person that is a United States Person permitted by
the Commission to act as
47
an institutional trustee under the Trust Indenture Act, authorized
under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least fifty 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 purpose of this Section
6.3(a)(ii), the combined capital and surplus of such corporation shall
be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b) If at any time the Property Trustee shall cease to be eligible to
so act under Section 6.3(a), the Property Trustee immediately shall resign in
the manner and with the effect set forth in Section 6.6(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holders of the Common Securities (as if it were the
obligor referred to in Section 310(b) of the Trust Indenture Act) shall comply
in all respects with the provisions of Section 310(b) of the Trust Indenture
Act.
(d) The Guarantee shall be deemed to be specifically described in this
Declaration for purposes of clause (i) of the first proviso contained in Section
310(b) of the Trust Indenture Act.
Section 6.4 Qualifications of the Regular Trustees Generally.
Each Regular Trustee shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
Section 6.5 Initial Regular Trustees.
The initial Regular Trustees shall be Alan M. Wright and
Thomas A. McNish, the business address of all of whom is in care of CMS Energy
Corporation, Fairlane Plaza South, Suite 1100, 330 Town Center Drive, Dearborn,
Michigan 48126.
Section 6.6 Appointment, Removal and Resignation of the Trustees.
(a) Subject to Sections 6.6(b) and 7.5(k), the Trustees may be
appointed or removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
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(ii) after the issuance of any Securities, by a vote of the
Holders of a Majority in Liquidation Amount of the Common Securities at
a meeting of the Holders of the Common Securities or by written consent
without prior notice in lieu of such meeting.
(b) The Property Trustee shall not be removed in accordance with
Section 6.6(a) or Section 7.5(k) until a successor Trustee possessing the
qualifications to act as Property Trustee under Section 6.3(a) (a "Successor
Property Trustee") has been appointed and has accepted such appointment by
written instrument executed by such Successor Property Trustee and delivered to
the Regular Trustees and the Sponsor. The Delaware Trustee shall not be removed
in accordance with Section 6.6(a) or Section 7.5(k) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections 6.2 and
6.4 (a "Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until a successor
has been appointed, until death or dissolution or until removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by written instrument executed by such Trustee and delivered to the
Sponsor and the other Trustees, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided that:
(i) no such resignation of the Property Trustee shall be
effective:
(A) until 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 Regular
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 Delaware Trustee shall be
effective until a Successor Delaware Trustee has been appointed and has
accepted such appointment by written instrument executed by such
Successor Delaware
49
Trustee and delivered to the Regular 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 Property Trustee or Successor Delaware Trustee,
as the case may be, if the Property Trustee or the Delaware Trustee delivers an
instrument of resignation in accordance with this Section 6.6.
(e) If no Successor Property Trustee or Successor Delaware Trustee, as
the case may be, has been appointed and accepted appointment as provided in this
Section 6.6 within 60 days after delivery of an instrument of resignation or
removal, the resigning or removed Property Trustee or Delaware Trustee, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Property Trustee or Successor Delaware Trustee, as applicable. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Property Trustee or Successor Delaware Trustee, as
the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
(g) In case of the appointment hereunder of a Successor Property
Trustee or a Successor Delaware Trustee, such Successor Property Trustee or
Successor Delaware Trustee so appointed shall execute, acknowledge and deliver
to the Trust and to the retiring Property Trustee or Delaware Trustee, as the
case may be, an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Property Trustee or Delaware Trustee
shall become effective and such Successor Property Trustee or Successor Delaware
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Property Trustee or
Delaware Trustee; but, on the request of the Sponsor or the Successor Property
Trustee or Successor Delaware Trustee, such retiring Property Trustee or
Delaware Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such Successor Property Trustee or Successor Delaware
Trustee all the rights, powers and trusts of the retiring Property Trustee or
Delaware Trustee, as the case may be, and if the Property Trustee is the
resigning Trustee, it shall duly assign, transfer and deliver to the Successor
Property Trustee all property and money held by such retiring Property Trustee
hereunder.
Section 6.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 6.1, or if the number of
Trustees is increased pursuant to Section 6.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the Regular Trustees or,
if there are more than two, a
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majority of the Regular Trustees shall be conclusive evidence of the existence
of such vacancy. The vacancy shall be filled with a Trustee appointed in
accordance with Section 6.6.
Section 6.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul, dissolve or terminate the Trust nor to
terminate this Declaration. Whenever a vacancy in the number of Regular Trustees
shall occur until such vacancy is filled by the appointment of a Regular Trustee
in accordance with Section 6.6, the Regular Trustees in office, regardless of
the number, shall have all the powers granted to the Regular Trustees and shall
discharge all the duties imposed upon the Regular Trustees by this Declaration.
Section 6.9 Meetings.
If there is more than one Regular Trustee, meetings of the
Regular Trustees shall be held from time to time upon the call of any Regular
Trustee. Regular meetings of the Regular Trustees may be held at a time and
place fixed by resolution of the Regular Trustees. Notice of any in-person
meetings of the Regular Trustees shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 48 hours before such meeting. Notice of any telephonic meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 24
hours before a meeting. Notices shall contain a brief statement of the time,
place and anticipated purposes of the meeting. The presence (whether in person
or by telephone) of a Regular Trustee at a meeting shall constitute a waiver of
notice of such meeting except where a Regular Trustee attends a meeting for the
express purpose of objecting to the transaction of any activity on the ground
that the meeting has not been lawfully called or convened. Unless provided
otherwise in this Declaration, any action of the Regular Trustees may be taken
at a meeting by vote of a majority of the Regular Trustees present (whether in
person or by telephone) and eligible to vote with respect to such matter,
provided a Quorum is present, or without a meeting and without prior notice by
the unanimous written consent of the Regular Trustees. In the event there is
only one Regular Trustee, any and all action of such Regular Trustee shall be
evidenced by a written consent of such Regular Trustee.
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Section 6.10 Delegation of Power by the Regular Trustees.
(a) Any Regular Trustee may delegate to any natural person over the age
of 21 that is a United States Person, by power of attorney consistent with
applicable law, his, her or its power for the purpose of executing any documents
contemplated in Section 3.6.
(b) The Regular Trustees shall have the power to delegate from time to
time to such of their number or to officers of the Trust or any other Person the
doing of such things and the execution of such instruments either in the name of
the Trust or the names of the Regular Trustees or otherwise as the Regular
Trustees may deem expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of the Trust, as set forth herein.
Section 6.11 Merger, Consolidation, Conversion or Succession to
Business.
Any entity into which the Property Trustee, the Delaware
Trustee or any Regular Trustee that is not a natural person may be merged or
converted or with such Trustee may be consolidated, or any entity resulting from
any merger, conversion or consolidation to which such Trustee is a party, or
any entity succeeding to all or substantially all the corporate trust business
of such Trustee, shall be the successor of such Trustee hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such entity otherwise is qualified and eligible
under this Article.
ARTICLE 7: TERMS OF THE SECURITIES
Section 7.1 General Provisions Regarding the Securities.
(a) The Regular Trustees shall issue, on behalf of the Trust, one class
of preferred securities representing undivided beneficial interests in the
assets of the Trust (the "Preferred Securities") and one class of common
securities representing undivided beneficial interests in the assets of the
Trust (the "Common Securities"). The Trust shall issue no securities or other
interests in the assets of the Trust other than the Preferred Securities and the
Common Securities and the aggregate liquidation amount of all Securities issued
by the Trust and outstanding at any time shall not exceed $257,731,975.
(i) Preferred Securities. The Preferred Securities of the
Trust shall have an aggregate stated liquidation amount with respect to
the assets of the Trust of two hundred twenty million and 00/100
dollars ($220,000,000)
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(subject to increase to not more than two hundred fifty million and
00/100 dollars ($250,000,000) in the event of the exercise of any
Over-allotment Option) and a stated liquidation amount with respect to
the assets of the Trust of $25 per Preferred Security. The Preferred
Securities are hereby designated for identification purposes only as
the Preferred Securities. The Preferred Security Certificates shall be
substantially in the form of Exhibit A hereto, with such changes and
additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.
(ii) Common Securities. The Common Securities of the Trust
shall have an aggregate liquidation amount with respect to the assets
of the Trust of six million eight hundred four thousand one hundred
twenty-five and 00/100 dollars ($6,804,125) (subject to increase to not
more than seven million seven hundred thirty-one thousand nine hundred
seventy-five and 00/100 dollars ($7,731,975) in the event of the
exercise of any Over-allot ment Option) and a liquidation amount with
respect to the assets of the Trust of $25 per Common Security. The
Common Securities are hereby designated for identification purposes
only as the Common Securities. The Common Security Certificates shall
be substantially in the form of Exhibit B hereto, with such changes and
additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice.
(b) Except with respect to a Cash Merger Event Redemption, payment of
Distributions on, and any payment of the Redemption Price upon a redemption of,
the Preferred Securities and the Common Securities, as applicable, shall be made
Pro Rata based on the liquidation amount of such Preferred Securities and Common
Securities; provided that if on any date on which amounts payable on
distribution or redemption, an Indenture Event of Default has occurred and is
continuing, then such amounts payable shall not be made on any of the Common
Securities, and no other payment on account of the redemption, liquidation or
other acquisition of such Common Securities shall be made, until all accumulated
and unpaid Distributions, or payments of the Redemption Price, as the case may
be, on all of the outstanding Preferred Securities for which Distributions are
to be paid or that have been called for redemption, as the case may be, are
fully paid. All funds available to the Property Trustee shall first be applied
to the payment in full in cash of all Distributions on, or the Redemption Price
of, the Preferred Securities then due and payable.
(c) 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.
(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be validly issued, fully paid and non-assessable
beneficial ownership interests in the assets of the Trust.
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(e) Every Person, by virtue of having become a Holder of Securities or
a Beneficial Owner of Preferred Securities 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, the Guarantee, the Indenture, the
Purchase Contract Agreement, the Pledge Agreement and the Subordinated
Deferrable Notes.
(f) The Holders of the Securities shall not have any preemptive or
similar rights.
(g) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual or facsimile signature of
any Regular Trustee. If a Regular Trustee of the Trust who has signed any of the
Certificates ceases to be a Regular Trustee before such signed Certificates have
been delivered by the Trust, such Certificates nevertheless may be delivered as
though the Person who signed such Certificates had not ceased to be a Regular
Trustee. Any Certificate may be signed on behalf of the Trust by such Persons
who, at the actual date of execution of such Certificate, shall be the Regular
Trustees of the Trust, although at the date of the execution and delivery of
this Declaration any such Person was not such a Regular Trustee. Certificates
shall be printed, lithographed or engraved or may be produced in any other
manner as is reasonably acceptable to the Regular Trustees, as evidenced by
their execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the Regular
Trustees may deem appropriate, or as may be required to comply with any law or
with any rule or regulation of any stock exchange on which the Securities may be
listed, or to conform to usage.
A Preferred Security Certificate shall not be valid until
authenticated by the manual signature of an authorized signatory of the Property
Trustee. Such signature shall be conclusive evidence that such Preferred
Security Certificate has been authenticated under this Declaration.
Upon a written order of the Trust signed by one Regular
Trustee, the Property Trustee shall authenticate the Preferred Security
Certificates for original issue. The aggregate number of Preferred Securities
outstanding at any time (including the Over-allotment Option) shall not exceed
the liquidation amount set forth in Section 7.1(a)(i).
The Property Trustee may appoint an authenticating agent
acceptable to the Trust, as determined by the Regular Trustees on behalf of the
Trust, to
54
authenticate Certificates. An authenticating agent may authenticate Certificates
whenever the Property Trustee may do so. Each reference in this Declaration to
authentication by the Property Trustee shall include authentication by such
agent. An authenticating agent shall have the same rights as the Property
Trustee to deal with the Sponsor or an Affiliate of the Sponsor.
(h) The Preferred Securities Certificates, upon original issuance
(including Preferred Securities, if any, issued pursuant to the exercise of any
Over-allotment Option), shall be issued as Global Securities in the form of one
or more fully registered global Preferred Security Certificates (each a "Global
Certificate"), to be delivered to The Depository Trust Company, the initial
Depositary, by or on behalf of the Trust. Such Global Certificates initially
shall be registered on the books and records of the Trust in the name of "Cede &
Co.," the nominee of the initial Depositary. No Beneficial Owner of Preferred
Securities shall receive a definitive Preferred Security Certificate
representing such Beneficial Owner's interests in such Global Certificates,
except as provided in Section 7.12. Unless and until definitive, fully
registered Preferred Security Certificates have been issued to the Beneficial
Owners of Preferred Securities pursuant to Section 7.12,
(i) the provisions of this Section 7.1 shall be in full force
and effect;
(ii) the Trust and the Trustees shall be entitled to deal with
the Depositary for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents thereunder) as the Holder of the Preferred
Securities and the sole Holder of the Global Certificates and, except
as set forth herein or in Rule 3a- 7 (if the Trust is excluded from the
definition of an Investment Company solely by reason of Rule 3a-7) with
respect to the Property Trustee, shall have no obligation to the
Beneficial Owners of the Preferred Securities;
(iii) to the extent that the provisions of this Section 7.1
conflict with any other provisions of this Declaration, the provisions
of this Section 7.1 shall control; and
(iv) the rights of the Beneficial Owners of the Preferred
Securities shall be exercised only through the Depositary and shall be
limited to those established by law and agreements between such
Beneficial Owners and the Depositary and/or the Depositary
Participants. The Depositary shall make book-entry transfers among
Depositary Participants and receive and transmit Distributions on the
Global Certificates to such Depositary Participants; provided that
solely for the purposes of determining whether the Holders of
the requisite amount of Preferred Securities have voted on any matter
provided for in this Declaration, so long as definitive Preferred
Security
55
Certificates have not been issued, the Trustees may rely conclusively
on, and shall be fully protected in relying on, any written instrument
(including a proxy) delivered to the Trustees by the Depositary
setting forth the votes of the Beneficial Owners of the Preferred
Securities or assigning the right to vote on any matter to any other
Persons either in whole or in part.
Whenever a notice or other communication to the Holder of the
Preferred Securities is required to be given under this Declaration, unless and
until definitive Preferred Security Certificates have been issued pursuant to
Section 7.1(g), the Trustees shall deliver all such notices and communications
specified herein to be given to the Holders of the Preferred Securities to the
Depositary, and, with respect to any Preferred Security Certificate registered
in the name of a Depositary or the nominee of a Depositary, the Trustees may
conclusively rely on, and shall be fully protected in relying on, any written
instrument (including a proxy) delivered to the Trustees by the Depositary
setting forth the votes of the Beneficial Owners of the Preferred Securities or
assigning the right to vote on any matter or any other Persons either in whole
or in part.
Section 7.2 Distributions.
(a) Holders of the Securities shall be entitled to receive
Distributions that shall accumulate and be payable at the rate per annum of %
of the stated liquidation amount of $25 per Security until August 18, 2003, and
at the Reset Rate thereafter. The amount of Distributions payable for any period
shall be computed (i) for any full quarterly distribution period, on the basis
of a 360-day year of twelve 30-day months and (ii) for any period shorter than a
full quarterly distribution period, on the basis of a 30-day month and, for any
period of less than one month, on the basis of the actual number of days elapsed
per 30-day month. Subject to Section 7.1(b), Distributions shall be made on the
Securities on a Pro Rata basis. Distributions on the Securities shall accumulate
from August 22, 2000, shall be cumulative and shall be payable quarterly, in
arrears, on August 18, November 18, February 18 and May 18 of each year,
commencing November 18, 2000, when, as and if available for payment, by the
Property Trustee, except as otherwise described below. Distributions shall be
payable only to the extent that payments are made to the Trust in respect of the
Subordinated Deferrable Notes held by the Property Trustee and to the extent
that the Trust has funds available for the payment of such Distributions in the
Property Account.
(b) Distributions not paid on the scheduled payment date shall
accumulate and compound quarterly at the rate of % per annum through and
including August 18, 2003 and at the Reset Rate thereafter ("Compounded
Distributions").
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"Distributions" shall mean ordinary cumulative distributions together with any
Compounded Distributions.
(c) Except with respect to a Cash Merger Event Redemption, if and to
the extent that the Subordinated Deferrable Notes Issuer makes a payment of
principal of and any premium or interest on the Subordinated Deferrable Notes
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 Pro Rata distribution of the Payment
Amount to Holders, subject to Section 7.1(b). Redemption payments made on the
Subordinated Deferrable Notes held by the Property Trustee in connection with a
Cash Merger Event Redemption shall only be distributed as set forth in Section
7.3 (c) hereof.
(d) Distributions on the Securities shall be payable to the Holders
thereof as they appear on the register of the Trust as of the close of business
on the relevant record dates. If the Preferred Securities are represented by one
or more Global Securities, the relevant record dates shall be the close of
business on the Business Day preceding such Distribution payment date, unless a
different regular record date is established or provided for the corresponding
interest payment date on the Subordinated Deferrable Notes. The relevant record
dates for the Common Securities shall be the same as for the Preferred
Securities. If the Preferred Securities are not represented by one or more
Global Securities, the relevant record dates for the Preferred Securities shall
be selected by the Regular Trustees and shall be the fifteenth Business Day
prior to the relevant Distribution payment dates. At all times, the Distribution
payment dates shall correspond to the interest payment dates on the Subordinated
Deferrable Notes. Distributions payable on any Securities that are not
punctually paid on any Distribution payment date, as a result of the
Subordinated Deferrable Notes Issuer having failed to make a payment under the
Subordinated Deferrable Notes, shall cease to be payable to the Person in whose
name such Securities are registered on the relevant record date, and such
defaulted Distribution instead shall 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 this Declaration. 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 day that is a
Business Day (and without any interest or other payment in respect of any such
delay), except that if such Business Day is in the next calendar year, such
payment shall be made on the preceding Business Day, with the same force and
effect as if made on such payment date.
(e) In the event that there is any money or other property held by or
for
57
the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata among the Holders of the Securities, subject to Section
7.1(b).
Section 7.3 Redemption of Securities.
(a) With respect to redemptions other than in connection with a Cash
Merger Event Redemption, upon the repayment or redemption, in whole or in part,
of the Subordinated Deferrable Notes held by the Trust, whether at the stated
maturity of the Subordinated Deferrable Notes or upon earlier redemption as
provided in the Indenture, the proceeds from such repayment or redemption shall
be simultaneously applied Pro Rata (subject to Section 7.1(b)) to redeem
Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Subordinated Deferrable Notes so repaid or redeemed at
the Redemption Price. Holders of the Securities shall be given not less than 30
nor more than 60 days notice of such redemption in accordance with Section 7.4.
(b) If the Subordinated Deferrable Notes Issuer redeems the
Subordinated Deferrable Notes upon the occurrence and continuance of a Tax
Event, the proceeds from such redemption shall be applied by the Property
Trustee to redeem the Securities in whole (but not in part) at a redemption
price per Security equal to the Redemption Amount plus any accumulated and
unpaid Distributions thereon to the Tax Event Redemption Date. If, following the
occurrence of a Tax Event, the Subordinated Deferrable Notes Issuer exercises
its option to redeem the Subordinated Deferrable Notes, the Subordinated
Deferrable Notes Issuer shall appoint the Quotation Agent; if a Tax Event
Redemption occurs prior to the Purchase Contract Settlement Date, the redemption
price payable in liquidation of the Securities that are part of PEPS Units will
be distributed to The Chase Manhattan Bank, acting as the securities
intermediary under the Pledge Agreement, which in turn will apply that amount to
purchase the Treasury Portfolio and remit the remaining portion, if any, of such
price to The Bank of New York, acting as the purchase contract agent under the
Purchase Contract Agreement, for payment to the Holders of the Securities. If a
Tax Event Redemption occurs after the Purchase Contract Settlement Date, the
Treasury Portfolio shall not be purchased and the Property Trustee shall
distribute to the
Holders of the Securities on the Tax Event Redemption Date the Redemption Price
payable in liquidation of such Holders' interests in the assets of the Trust.
(c) In connection with a Cash Merger Event, each Holder of Securities
shall have the right to require the Trust to redeem all or any part (equal to
$25 or an integral multiple thereof) of such Holder's Securities pursuant to the
offer described below (the "Cash Merger Event Offer") at an offer price in cash
equal to the applicable Redemption Price.
No later than the day of the Cash Merger Event, the Trust
shall mail or cause to be mailed a notice of a pending Cash Merger Event to each
Holder (at its last
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registered address with a copy to the Trustee and the Paying Agent) offering to
repurchase the Securities held by such Holder pursuant to the procedures
specified in such notice. The Cash Merger Event Offer shall remain open from the
time of mailing until at least 5:00 p.m. on the last day of the second week
immediately following the last day of the corresponding Early Settlement Week.
The notice, which shall govern the terms of the Cash Merger Event Offer, shall
contain all instructions and materials necessary to enable the Holders to tender
Securities pursuant to the Cash Merger Event Offer and shall state:
(i) that the Cash Merger Event Offer is being made pursuant to
this Section 7.3(c) and that all Securities tendered will be accepted
for payment;
(ii) the applicable Redemption Price and the Cash Merger
Redemption Date (as such term is defined below in this Section 7.3(c)),
which date shall be no earlier than 20 business days from the date such
notice is mailed;
(iii) that any Security not tendered will continue to accrue
Distributions in accordance with this Declaration;
(iv) that, unless the Trust defaults in the payment of the
applicable Redemption Price, all Securities accepted for payment
pursuant to the Cash Event Merger Offer will cease to accrue interest
after the Cash Merger Redemption Date;
(v) that Holders electing to have a Security purchased
pursuant to any Cash Event Merger Offer will be required to surrender
the Security, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Security completed, to the Trust, a
depositary, if appointed by the Trust, or a Paying Agent at the address
specified in the notice prior to the 5:00 p.m. on the last day of the
second week immediately following the end of the corresponding Early
Settlement Week;
(vi) that Holders will be entitled to withdraw their election
if the Trust, depositary or Paying Agent, as the case may be, receives,
not later than 5:00 p.m. on the last day of the second week immediately
following the end of the corresponding Early Settlement Week, a
facsimile transmission or letter setting forth the name of the Holder,
the liquidation amount of the Securities the Holder delivered for
purchase, and a statement that such Holder is
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withdrawing his election to have such Securities purchased;
(vii) that Holders whose Securities are being purchased only
in part will be issued new Securities equal in liquidation amount to
the unpurchased portion of the Securities surrendered, which
unpurchased portion must be equal to $25 in liquidation amount or an
integral multiple thereof; and
(viii) the circumstances and relevant facts regarding such
Cash Merger Event and any other information that would be material to a
decision as to whether to tender a Security pursuant to the Cash Merger
Event Offer.
On the Cash Merger Redemption Date, the Trust shall, to the
extent lawful, (x) accept for payment all Securities or portions thereof
properly tendered and not withdrawn pursuant to the Cash Merger Event Offer, (y)
deposit with the Paying Agent an amount equal to the Cash Merger Event Payment
in respect of all Securities or portions thereof so tendered and (z) deliver or
cause to be delivered to the Trustee the Securities so accepted together with an
Officers' Certificate stating the aggregate liquidation amount of Securities or
portions thereof being purchased by the Trust. The Paying Agent shall promptly
mail to each Holder of Securities so tendered the Redemption Price for each such
Security, and the Property Trustee shall promptly authenticate and mail (or
cause to be transferred by book entry) to each Holder a new Security equal in
liquidation amount to any unpurchased portion of the Securities surrendered, if
any; provided that each such new Security shall be in a liquidation amount of
$25 or an integral multiple thereof. The Trust shall publicly announce the
results of the Cash Merger Event Offer on or as soon as practicable after the
applicable Cash Merger Redemption Date.
The Trust shall comply with the requirements of Rule 14e-1 and
Rule 13e-4 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the redemption of Securities as a result of a Cash Merger Event.
The aggregate Redemption Price to be paid in connection with
this Section 2.5(b) shall be paid prior to 12:00 noon, New York City time, on
the Business Day immediately following the last day of the second week
immediately following the last day of the corresponding Early Settlement Week
(the "Cash Merger Redemption Date") or such earlier time as the Trust
determines, provided that the Trust shall have deposited with the Trustee an
amount sufficient to pay the aggregate Redemption Price by 10:00 a.m. on the
Cash Merger Redemption Date.
Section 7.4 Redemption Procedures.
(a) Except with respect to any Cash Merger Event Redemption, notice of
any redemption of, or notice of distribution of Subordinated Deferrable Notes in
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exchange for, the Securities (a "Redemption/Distribution Notice"), which notice
shall be irrevocable, shall be given by the Trust by mail to each Holder of
Securities to be redeemed or exchanged at least 30 but no more than 60 days
before the date fixed for redemption or exchange thereof which, in the case of a
redemption, shall be the date fixed for redemption of the Subordinated
Deferrable Notes. For purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given pursuant to this Section
7.4(a), a Redemption/Distribution Notice shall be deemed to be given on the day
such notice is first mailed by first-class mail, postage prepaid, to the Holders
of the Securities. Each Redemption/Distribution Notice shall be addressed to the
Holders of the Securities at the address of each such Holder appearing in the
register of the Trust. All notices of redemption shall state:
(i) the date fixed for redemption;
(ii) the Redemption Price;
(iii) the applicable CUSIP number;
(iv) if less than all of the outstanding Securities are to be
re deemed, the identification and amount of the particular Trust
securities to be redeemed;
(v) that on the date fixed for redemption the Redemption Price
will become due and payable upon each Security to be redeemed and that
Distributions thereon will cease to accrue on and after said date; and
(vi) the place or places where such Securities are to be
surrendered for payment of the Redemption Price.
No defect in the Redemption/Distribution Notice or in the mailing of either
thereof with respect to any Holder shall affect the validity of the redemption
or exchange proceedings with respect to any other Holder.
(b) With respect to redemptions other than a Cash Merger Event
Redemption, subject to the Trust's fulfillment of the notice requirements set
forth in Section 7.4(a), if Securities are to be redeemed, then (provided that
the Subordinated Deferrable Notes Issuer has paid the Property Trustee a
sufficient amount of cash in connection with the related redemption or maturity
of the Subordinated Deferrable Notes) (i) with respect to the Preferred
Securities represented by one or more Global Securities, by 12:00 noon, New York
City time, on the redemption date, the Property Trustee will deposit irrevocably
with the Depositary or its nominee funds sufficient to
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pay the applicable Redemption Price, and the Property Trustee shall give the
Depositary irrevocable instructions and authority to pay the Redemption Price to
the Beneficial Owners of the Preferred Securities, and (ii) with respect to
Securities not represented by one or more Global Securities, the Property
Trustee shall pay the applicable Redemption Price to the Holders of such
Securities by check mailed to the address of each Holder appearing on the
register of the Trust on the redemption date. If any date fixed for redemption
of Securities is not a Business Day, then payment of the Redemption Price
payable on such date shall be made on the next Business Day (without any
interest thereon), except that if such Business Day falls in the next calendar
year, such payment shall be made on the preceding Business Day, in each case
with the same force and effect as if made on such date fixed for redemption.
Notwithstanding the foregoing, so long as the Holder of any Preferred Securities
is the Collateral Agent or the Purchase Contract Agent, the payment of the
Redemption Price in respect of the Preferred Securities held by the Collateral
Agent or the Purchase Contract Agent shall be made no later than 12:00 noon, New
York City time, on the redemption date by check or wire transfer in immediately
available funds at such place and to such account as may be designated by the
Collateral Agent or the Purchase Contract Agent. If payment of the Redemption
Price in respect of any Securities is improperly withheld or refused and not
paid either by the Trust or by the Sponsor as guarantor pursuant to the
Guarantee, then Distributions on such Securities shall continue to accumulate at
the then applicable rate, from the original redemption date to the actual date
of payment, in which case the actual payment date shall be the date fixed for
redemption for purposes of calculating the Redemption Price. For these purposes,
the applicable Redemption Price shall not include Distributions that are being
paid to Holders of Securities who were not Holders of Securities on a relevant
record date. If a Redemption/Distribution Notice has been given and funds have
been deposited or paid as required, then immediately prior to the close of
business on the date of such deposit or payment, Distributions will cease to
accumulate on the Securities called for redemption, and all rights of Holders of
such Securities so called for redemption shall cease, except the right of the
Holders of such Securities to receive the Redemption Price, but without interest
on such Redemption Price, and from and after the date fixed for redemption, such
Securities will cease to be outstanding.
Neither the Regular Trustees nor the Trust shall be required
to register or cause to be registered the transfer of any Securities that have
been called for redemption, except for the unredeemed portion of any Securities
being redeemed in part.
(c) Subject to the foregoing and applicable law (including, without
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limitation, United States federal securities laws), the Subordinated Deferrable
Notes Issuer or its Affiliates may purchase, at any time and from time to time,
outstanding Preferred Securities by tender, in the open market, by private
agreement or other wise.
Section 7.5 Voting Rights of the Preferred Securities.
(a) Except as provided under this Section 7.5 and Section 11.1 and as
otherwise required by the Business Trust Act, the Trust Indenture Act and other
applicable law, the Holders of the Preferred Securities shall have no voting
rights.
(b) Subject to the requirement of the Property Trustee obtaining a tax
opinion in certain circumstances set forth in Section 7.5(d), the Holders of a
Majority in Liquidation Amount of the Preferred Securities, voting separately as
a class, shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Property Trustee, or to direct
the exercise of any trust or power conferred upon the Property Trustee under
this Declaration, including the right to direct the Property Trustee, as Holder
of the Subordinated Deferrable Notes, to (i) exercise the remedies available to
it under the Indenture, (ii) consent to any amendment or modification of the
Indenture or the Subordinated Deferrable Notes where such consent is required or
(iii) waive any past default and its consequences that are waivable under the
Indenture; provided that if an Indenture Event of Default has occurred and is
continuing, then the Holders of 25% of the aggregate stated liquidation amount
of the Preferred Securities may direct the Property Trustee to declare the
principal of and interest on the Subordinated Deferrable Notes due and payable;
provided further that where a consent or action under the Indenture would
require the consent or act of the Holders of more than a majority of the
aggregate principal amount of Subordinated Deferrable Notes affected thereby,
the Property Trustee only may give such consent or take such action at the
direction of the Holders of at least the same proportion in aggregate stated
liquidation amount of the Preferred Securities; and provided further, however,
that (subject to the provisions of Section 3.09) the Property Trustee shall have
the right to decline to follow any such direction if the Property Trustee, being
advised by counsel, determines that the action or proceeding so directed may not
lawfully be taken or if the Property Trustee, in good faith, by its board of
directors or trustees, executive committee, or a trust committee of directors or
trustees, and/or Responsible Officers, shall determine that the action or
proceeding so directed would involve the Property Trustee in personal liability.
(c) If the Property Trustee fails to enforce its rights under the
Subordinated Deferrable Notes after a Holder of Preferred Securities has made a
written request, such Holder of Preferred Securities may institute, to the
fullest extent permitted by law, a legal proceeding directly against the
Subordinated Deferrable Notes Issuer to enforce the Property Trustee's rights
under the Indenture without first instituting any legal proceeding against the
Property Trustee or any other Person. In addition, if a Trust Enforcement Event
has occurred and is continuing and such event
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is attributable to the failure of the Subordinated Deferrable Notes Issuer to
make any interest, principal or other required payments when due under the
Indenture, then a Holder of Preferred Securities may institute a Direct Action
against the Subordinated Deferrable Notes Issuer on or after the respective due
date specified in the Subordinated Deferrable Notes. In connection with such
Direct Action, the Subordinated Deferrable Notes Issuer will be subrogated to
the rights of such Holder of Preferred Securities to the extent of any payment
made by the Subordinated Deferrable Notes Issuer to such Holders of Preferred
Securities in such Direct Action.
(d) The Property Trustee shall notify all Holders of the Preferred
Securities of any notice of any Indenture Event of Default received from the
Subordinated Deferrable Notes Issuer with respect to the Subordinated Deferrable
Notes. Such notice shall state that such Indenture Event of Default also
constitutes a Trust Enforcement Event. Except with respect to directing the
time, method, and place of conducting a proceeding for a remedy, the Property
Trustee shall be under no obligation to take any of the actions described in
clauses (i) and (ii) of Section 7.5(b) above, unless the Property Trustee has
obtained an opinion of independent tax counsel to the effect that the Trust will
not fail to be classified as a grantor trust for United States federal income
tax purposes as a result of such action, and that each Holder of Preferred
Securities shall be treated as owning an undivided beneficial ownership interest
in the Subordinated Deferrable Notes.
(e) If the consent of the Property Trustee, as the Holder of the
Subordinated Deferrable Notes, is required under the Indenture with respect to
any amendment or modification of the Indenture, the Property Trustee shall
request the direction of the Holders of the Securities with respect to such
amendment or modification and shall vote with respect to such amendment or
modification as directed by a Majority in Liquidation Amount of the Securities
voting together as a single class; provided that where a consent under the
Indenture would require the consent of the Holders of more than a majority of
the aggregate principal amount of the Subordinated Deferrable Notes, the
Property Trustee only may give such consent at the direction of the Holders of
at least the same proportion in aggregate stated liquidation amount of the
Securities. The Property Trustee shall not take any such action in accordance
with the directions of the Holders of the Securities unless the Property Trustee
has obtained an opinion of independent tax counsel to the effect that the Trust
will not be classified as other than a grantor trust for United States federal
income tax purposes as a result of such action, and that each Holder will be
treated as owning an undivided beneficial ownership interest in the Subordinated
Deferrable Notes.
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(f) A waiver of an Indenture Event of Default with respect to the
Subordinated Deferrable Notes shall constitute a waiver of the corresponding
Trust Enforcement Event.
(g) Any required approval or direction of the Holders of the Preferred
Securities may be given at a separate meeting of the Holders of the Preferred
Securities convened for such purpose, at a meeting of all of the Holders of the
Securities or pursuant to written consent without prior notice. The Regular
Trustees shall cause a notice of any meeting at which Holders of the Preferred
Securities are entitled to vote to be mailed to each Holder of record of
Preferred Securities. Each such notice shall include a statement setting forth:
(i) the date of such meeting; (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote; and (iii)
instructions for the delivery of proxies.
(h) No vote or consent of the Holders of the Preferred Securities shall
be required for the Trust to redeem and cancel the Preferred Securities or
distribute the Subordinated Deferrable Notes in accordance with this Declaration
and the terms of the Securities.
(i) Notwithstanding that the Holders of the Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Preferred Securities that are owned at such time by the Subordinated
Deferrable Notes Issuer the Trustees or any entity directly or indirectly
controlled by, or under direct or indirect common control with, the Subordinated
Deferrable Notes Issuer or any Trustee shall not be entitled to vote or consent
and shall be treated, for purposes of such vote or consent, as if such Preferred
Securities were not outstanding.
(j) Except as provided under Section 7.5(k), the Holders of the
Preferred Securities shall have no rights to appoint or remove the Trustees,
who, subject to Section 6.6, may be appointed, removed or replaced by the
Holders of the Common Securities.
(k) If an Indenture Event of Default has occurred and is continuing,
the Property Trustee and the Delaware Trustee may be removed and replaced,
subject to Section 6.6(b), at such time by a Majority in Liquidation Amount of
the Preferred Securities.
Section 7.6 Voting Rights of the Common Securities.
(a) Except as provided under Section 6.1(b), this Section 7.6 and
Section
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11.1 and as otherwise required by the Business Trust Act, the Trust Indenture
Act or other applicable law or provided by this Declaration, the Holders of the
Common Securities shall have no voting rights.
(b) Subject to Section 7.5(k), the Holders of the Common Securities
shall be entitled to vote to appoint, remove or replace any Trustee or to
increase or decrease the number of Trustees in accordance with Article 6.
(c) Subject to Section 2.6 and only after all Trust Enforcement Events
with respect to the Preferred Securities have been cured, waived, or otherwise
eliminated and subject to the requirement of the Property Trustee obtaining a
tax opinion in certain circumstances set forth in this paragraph (c), the
Holders of the Common Securities shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Property
Trustee, or to direct the exercise of any trust or power conferred upon the
Property Trustee under this Declaration, including the right to direct the
Property Trustee, as Holder of the Subordinated Deferrable Notes, to (i)
exercise the remedies available to it under the Indenture, (ii) consent to any
amendment or modification of the Indenture or the Subordinated Deferrable Notes
where such consent is required or (iii) waive any past default and its
consequences that are waivable under the Indenture; provided that where a
consent or action under the Indenture would require the consent or act of the
Holders of more than a majority of the aggregate principal amount of
Subordinated Deferrable Notes affected thereby, only the Holders of at least the
same proportion of the aggregate stated liquidation amount of the Common
Securities may direct the Property Trustee to give such consent or take such
action. Except with respect to directing the time, method, and place of
conducting a proceeding for a remedy, the Property Trustee shall be under no
obligation to take any of the actions described in clause 7.6(c)(i) and (ii)
above unless the Property Trustee has obtained an opinion of independent tax
counsel to the effect that, as a result of such action, for United States
federal income tax purposes the Trust will not fail to be classified as a
grantor trust and each Holder will be treated as owning an undivided beneficial
ownership interest in the Subordinated Deferrable Notes.
(d) If the Property Trustee fails to enforce its rights under the
Subordinated Deferrable Notes after the Holders of the Common Securities have
made a written request, the Holders of the Common Securities may institute, to
the fullest extent permitted by law, a legal proceeding directly against the
Subordinated Deferrable Notes Issuer to enforce the Property Trustee's rights
under the Subordinated Deferrable Notes without first instituting any legal
proceeding against the Property Trustee or any other Person.
(e) A waiver of an Indenture Event of Default with respect to the
Subordinated Deferrable Notes shall constitute a waiver of the corresponding
Trust Enforcement Event.
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(f) Any required approval or direction of the Holders of the Common
Securities may be given at a separate meeting of the Holders of the Common
Securities convened for such purpose, at a meeting of all of the Holders of the
Securities or pursuant to written consent without prior notice. The Regular
Trustees shall cause a notice of any meeting at which the Holders of the Common
Securities are entitled to vote to be mailed to the Holders of the Common
Securities. Such notice shall include a statement setting forth: (i) the date of
such meeting; (ii) a description of any resolution proposed for adoption at such
meeting on which the Holders of the Common Securities are entitled to vote; and
(iii) instructions for the delivery of proxies.
(g) No vote or consent of the Holders of the Common Securities shall be
required for the Trust to redeem and cancel the Common Securities or to
distribute Subordinated Deferrable Notes in accordance with this Declaration and
the terms of the Securities.
Section 7.7 Paying Agent.
If any Preferred Securities are not represented by one or more
Global Securities, the Trust shall maintain in the Borough of Manhattan, New
York City, State of New York, an office or agency where the Preferred Securities
may be presented for payment ("Paying Agent"). The Regular Trustees shall
appoint the paying agent (which shall be a bank or trust company acceptable to
the Subordinated Deferrable Notes Issuer) and may appoint one or more additional
paying agents in such other locations as they shall determine. The term "Paying
Agent" includes any additional paying agent. The Regular Trustees may change any
Paying Agent without prior notice to the Holders of the Securities. The Regular
Trustees shall notify the Property Trustee of the name and address of any Paying
Agent not a party to this Declaration. If the Regular Trustees, on behalf of the
Trust, fail to appoint or maintain another entity as Paying Agent, the Property
Trustee shall act as such. The Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Property Trustee and the
Subordinated Deferrable Notes Issuer.
Section 7.8 Listing.
The Sponsor shall use its best efforts to cause the PEPS Units
to be listed and maintained as listed for quotation on the New York Stock
Exchange.
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Section 7.9 Transfer of the Securities.
(a) (i) The Preferred Securities initially shall be pledged,
pursuant to the terms of the Pledge Agreement, as collateral to secure
the obligations of the Holders of PEPS Units to purchase common shares
of the Company in accordance with the terms of the Purchase Contract
Agreement.
(ii) The Preferred Securities may be transferred, in whole or
in part, only in accordance with the terms and conditions set forth in
this Declaration and pursuant to the Pledge Agreement. To the fullest
extent permitted by law, any transfer or purported transfer of any
Preferred Security not made in accordance with this Declaration shall
be null and void.
(iii) Subject to this Section 7.9 and Section 7.12, the
Preferred Securities shall be freely transferable.
(iv) The Trust shall cause to be kept at the Corporate Trust
Office a register in which, subject to such reasonable regulations as
it may prescribe, the Trust shall provide for the registration of
Preferred Securities and of transfers of Preferred Securities. The
Property Trustee is hereby appointed "Security Registrar" for the
purpose of registering Preferred Securities and transfers of Preferred
Securities as herein provided.
(v) Upon surrender for registration of transfer of any
Preferred Securities at an office or agency of the Trust designated for
such purpose, a Regular Trustee shall execute, and the Property Trustee
shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Preferred Securities of any
authorized denominations and of a like aggregate principal amount.
(vi) At the option of the Holder, Securities may be exchanged
for other Preferred Securities of any authorized denominations and of a
like aggregate principal amount, upon surrender of the Preferred
Securities to be exchanged at such office or agency. Whenever any
Preferred Securities are so surrendered for exchange, a Regular Trustee
shall execute, and the Property Trustee shall authenticate and
deliver, the Preferred Securities that the Holder making the exchange
is entitled to receive.
(vii) If so required by the Trust or the Property Trustee,
every Preferred Security presented or surrendered for registration of
transfer or for exchange shall be duly endorsed, or accompanied by a
duly executed written
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instrument of transfer in form satisfactory to the Trust and the
Security Registrar, by the Holder thereof or his attorney duly
authorized in writing.
(viii) No service charge shall be made for any registration of
transfer or exchange of Preferred Securities, but the Trust may require
payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of
transfer or exchange of Preferred Securities.
(b) The Subordinated Deferrable Notes Issuer may not transfer the
Common Securities except in connection with the transactions permitted under
Section 801 of the Indenture; provided, that each Holder of the Common
Securities shall at all times be a United States Person. To the fullest extent
permitted by law, any attempted transfer of the Common Securities other than as
set forth in this Section 7.9(b) shall be null and void.
Section 7.10 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates are surrendered to the Regular Trustees,
or if the Regular Trustees receive evidence to their satisfaction of the
destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security or
indemnity as may be required by them to keep each of them and the Property
Trustee harmless, then, in the absence of notice that such Certificate has been
acquired by a bona fide purchaser, any Regular Trustee shall execute and the
Property Trustee shall authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like denomination. In connection with the issuance of any new Certificate under
this Section 7.10, the Regular Trustees may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Certificate issued pursuant to this Section
7.10 shall constitute conclusive evidence of an ownership interest in the
relevant Securities, as if originally issued, whether or not the lost, stolen or
destroyed Certificate is found at any time.
Section 7.11 Deemed Holders.
The Trustees may treat the Person in whose name any
Certificate is registered on the register of the Trust as the sole holder of
such Certificate and of the Securities represented thereby for purposes of
receiving Distributions and for all other purposes whatsoever. Accordingly, the
Trustees shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities
69
represented by such Certificate on the part of any Person, whether or not the
Trust has actual or other notice thereof.
Section 7.12 Global Securities.
The Preferred Securities initially shall be issued in the form
of one or more Global Securities. A Regular Trustee on behalf of the Trust shall
execute, and the Property Trustee shall authenticate and deliver, one or more
Global Securities that (i) shall represent and be denominated in an amount equal
to the aggregate stated liquidation amount of all of the Preferred Securities to
be issued in the form of Global Securities and not yet canceled, (ii) shall be
registered in the name of the Depositary for the Preferred Securities or the
nominee of such Depositary and (iii) shall be delivered by the Property Trustee
to such Depositary or pursuant to such Depositary's instructions. Global
Securities shall bear a legend substantially to the following effect:
"This Preferred Security is a Global Security within the
meaning of the Declaration and is registered in the name of
The Depository Trust Company, a New York corporation (the
"Depositary"), or a nominee of the Depositary. This Preferred
Security is exchangeable for Preferred Securities registered
in the name of a person other than the Depositary or its
nominee only in the limited circumstances described in the
Declaration, and no transfer of this Preferred Security (other
than a transfer of this Preferred Security as a whole by the
Depositary to a nominee of the Depositary or by a nominee of
the Depositary to the Depositary or another nominee of the
Depositary) may be reregistered except in limited
circumstances.
Unless this certificate is presented by an authorized
representative of the Depositary to CMS Energy Trust III or
its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede &
Co. or such other name as requested by an authorized
representative of the Depositary (and any payment hereon is
made to Cede & Co. or to such other entity as is requested by
an authorized representative of the Depositary), and except as
otherwise provided in the Amended and Restated Declaration of
CMS Energy Trust III dated as of August 22, 2000, as amended
from time to time, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON (OTHER THAN
PURSUANT TO THE PLEDGE AGREEMENT) IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein."
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Preferred Securities not represented by a Global Security
issued in exchange for all or a part of a Global Security pursuant to this
Section 7.12 shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Property Trustee. Upon
execution and authentication, the Property Trustee shall deliver any Preferred
Securities not represented by a Global Security to the Persons in whose names
such definitive Preferred Securities are so registered.
At such time as all interests in Global Securities have been
redeemed, repurchased or canceled, such Global Securities shall be canceled,
upon receipt thereof, by the Property Trustee in accordance with standing
procedures of the Depositary. At any time prior to such cancellation, if any
interest in a Global Security is exchanged for Preferred Securities not
represented by a Global Security, redeemed, canceled or transferred to a
transferee who receives Preferred Securities not represented by a Global
Security, or if any Preferred Security not represented by a Global Security is
exchanged or transferred for part of a Global Security, then, in accordance with
the standing procedures of the Depositary, the liquidation amount of such Global
Security shall be reduced or increased, as the case may be, and an endorsement
shall be made on such Global Security by the Property Trustee to reflect such
reduction or increase.
The Trust and the Property Trustee, as the authorized
representative of the Holders of the Preferred Securities, may deal with the
Depositary for all purposes of this Declaration, including the making of
payments due on the Preferred Securities and exercising the rights of Holders of
the Preferred Securities hereunder. The rights of any Beneficial Owner shall be
limited to those established by law and agreements between such owners and
Depository Participants; provided that no such agreement shall give to any
Person any rights against the Trust or the Property Trustee without the written
consent of the parties so affected. Multiple requests and directions from and
votes of the Depositary as the Holder of the Preferred Securities represented by
Global Securities with respect to any particular matter shall not be deemed
inconsistent to the extent they do not represent an amount of Preferred
Securities in excess of those held in the name of the Depositary or its nominee.
If at any time the Depositary notifies the Trust that it is
unwilling or unable to continue as Depositary for the Preferred Securities or if
at any time the Depositary no longer is eligible under this Section 7.12, the
Regular Trustees shall appoint a successor Depositary with respect to the
Preferred Securities. If a successor Depositary is not appointed by the Trust
within 90 days after the Trust receives such notice or becomes aware of such
ineligibility, the Trust's election that the Preferred Securities be represented
by one or more Global Securities shall no longer be effective, and a Regular
Trustee shall execute, and the Property Trustee will
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authenticate and deliver, Preferred Securities in definitive registered form, in
any authorized denominations, in an aggregate stated liquidation amount equal to
the aggregate stated liquidation amount of the Global Securities representing
the Preferred Securities in exchange for such Global Securities.
A Regular Trustee on behalf of the Trust at any time and in
its sole discretion may determine that the Preferred Securities issued in the
form of one or more Global Securities shall no longer be represented by Global
Securities. In such event a Regular Trustee on behalf of the Trust shall
execute, and the Property Trustee shall authenticate and deliver, Preferred
Securities in definitive registered form, in any authorized denominations, in an
aggregate stated liquidation amount equal to the aggregate stated liquidation
amount of the Global Securities representing the Preferred Securities, in
exchange for such Global Securities.
Notwithstanding any other provisions of this Declaration
(other than the provisions set forth in Section 7.9), Global Securities may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
Interests of Beneficial Owners may be transferred or exchanged
for Preferred Securities not represented by a Global Security, and Preferred
Securities not represented by a Global Security may be transferred or exchanged
for a Global Security or Securities, in accordance with rules of the Depositary
and the provisions of Section 7.9.
Section 7.13 Remarketing.
(a) So long as the Preferred Securities, the PEPS Units and the
Treasury Securities are evidenced by one or more global certificates held by the
Depositary, the Subordinated Deferrable Notes Issuer shall request, not later
than 15 nor more than 30 calendar days prior to the Remarketing Date, that the
Depositary notify the Holders of the Preferred Securities and the holders of
PEPS Units and the Treasury PEPS Units of the Remarketing and of the procedures
that must be followed if a Holder of Preferred Securities wishes to make a Cash
Settlement.
(b) Not later than 5:00 P.M., New York City time, on the seventh
Business Day preceding August 18, 2003, each Holder of Preferred Securities may
elect to have the Preferred Securities held by such Holder remarketed in the
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Remarketing. Under Section 5.02 of the Purchase Contract Agreement, holders of
PEPS Units that do not give notice of their intention to make a Cash Settlement
(that is not a Cash Merger Early Settlement) of the Purchase Contract component
of their PEPS Units prior to such time in the manner specified in such Section,
or have given such notice but fail to deliver cash prior to 11:00 A.M., New York
City time, on or prior to the fifth Business Day preceding August 18, 2003,
shall be deemed to have consented to the disposition of the Preferred Securities
comprising a component of their PEPS Units in the Remarketing. Holders of the
Preferred Securities that are not a component of PEPS Units wishing to elect to
have their Preferred Securities remarketed shall give to the Property Trustee
notice of their election prior to 11:00 A.M., New York City time on the fifth
Business Day prior to August 18, 2003. Any such notice shall be irrevocable and
may not be conditioned upon the level at which the Reset Rate is established in
the Remarketing. Promptly after 11:00 A.M., New York City time, on such fifth
Business Day, the Property Trustee, based on the notices received by it prior to
such time (including notices from the Purchase Contract Agent as to Purchase
Contracts for which Cash Settlement has been elected and cash received), shall
notify the Trust, the Sponsor and the Remarketing Agent of the number of
Preferred Securities to be tendered for purchase in the Remarketing.
(c) If any Holder of PEPS Units does not give a notice of its intention
to make a Cash Settlement (that is not a Cash Merger Early Settlement) or gives
such notice but fails to deliver cash as described in Section 7.13(b), or gives
a notice of election to have Preferred Securities that are not a component of
PEPS Units remarketed, then the Preferred Securities of such Holder shall be
deemed tendered for purchase in the Remarketing, notwithstanding any failure by
such Holder to deliver or properly deliver such Preferred Securities to the
Remarketing Agent for purchase.
(d) The right of each Holder to have Preferred Securities tendered for
purchase shall be limited to the extent that (i) the Remarketing Agent conducts
a Remarketing pursuant to the terms of the Remarketing Agreement, (ii) the
Remarketing Agent is able to find a purchaser or purchasers for the tendered
Preferred Securities and (iii) such purchaser or purchasers deliver the purchase
price therefor to the Remarketing Agent.
(e) On the Remarketing Date, the Remarketing Agent shall use
commercially reasonable efforts to remarket, at a price equal to 100.50% of the
aggregate stated liquidation amount thereof, the Preferred Securities tendered
or deemed tendered for purchase.
(f) If, as a result of the efforts described in 7.13(e), the
Remarketing Agent has determined that it will not be able to remarket all of the
Preferred Securities tendered or deemed tendered for purchase at a price of
100.50% of the aggregate stated liquidation amount of such Preferred Securities,
the Remarketing Agent shall determine the Reset Rate, which shall be the rate
per annum (rounded to
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the nearest one-thousandth (0.001) of one percent per annum), adjusted up or
down, sufficient to cause the then current aggregate market value of the
Preferred Securities to be equal to 100.50% of the aggregate stated liquidation
amount of such Preferred Securities, that the Remarketing Agent determines, in
its sole reasonable judgment, to be the lowest rate per annum that will enable
it to remarket all of the Preferred Securities tendered or deemed tendered for
Remarketing.
(g) If none of the Holders of the Preferred Securities or the holders
of the PEPS Units elect to have Preferred Securities remarketed in the
Remarketing, the Reset Rate shall be the rate determined by the Remarketing
Agent, in its sole reasonable discretion, as the rate that would have been
established had a Remarketing been held on the Remarketing Date.
(h) If, by 4:00 P.M., New York City time, on the Remarketing Date, the
Remarketing Agent is unable to remarket all of the Preferred Securities tendered
or deemed tendered for purchase, a failed Remarketing ("Failed Remarketing")
shall be deemed to have occurred and the Remarketing Agent shall so advise by
telephone the Depositary, the Property Trustee, the Trust and the Sponsor. In
the event of a Failed Remarketing, the Reset Rate shall equal the Two-Year
Benchmark Treasury Rate plus the Applicable Margin.
(i) By approximately 4:30 P.M., New York City time, on the Remarketing
Date provided that there has not been a Failed Remarketing, the Remarketing
Agent shall advise, by telephone (i) the Depositary, the Property Trustee, the
Trust and the Sponsor of the Reset Rate determined in the Remarketing and the
number of Preferred Securities sold in the Remarketing, (ii) each purchaser (or
the Depositary Participant thereof) purchasing Preferred Securities sold in the
Remarketing of the Reset Rate and the number of Preferred Securities such
purchaser is to purchase and (iii) each purchaser to give instructions to its
Depositary Participant to pay the purchase price on the Purchase Contract
Settlement Date in same day funds against delivery of the Preferred Securities
purchased through the facilities of the Depositary.
(j) In accordance with the Depositary's normal procedures, on the
Remarketing Settlement Date, the transactions described above with respect to
each Preferred Security tendered for purchase and sold in the Remarketing shall
be executed through the Depositary, and the accounts of the respective
Depositary Participants shall be debited and credited and such Preferred
Securities delivered by book-entry as necessary to effect purchases and sales of
such Preferred Securities. The Depositary shall make payment in accordance with
its normal procedures.
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(k) If any Holder of the Preferred Securities selling Preferred
Securities in the Remarketing fails to deliver such Preferred Securities, the
Depositary Participant of such selling Holder and of any other Person that was
to have purchased Preferred Securities in the Remarketing may deliver to any
such other Person a number of Preferred Securities that is less than the number
of Preferred Securities that otherwise was to be purchased by such Person. In
such event, the number of Preferred Securities to be so delivered shall be
determined by such Depositary Participant, and delivery of such lesser number of
Preferred Securities shall constitute good delivery.
(l) The Remarketing Agent is not obligated to purchase any Preferred
Securities that otherwise would remain unsold in the Remarketing. None of the
Trust, any Trustee, the Sponsor or the Remarketing Agent shall be obligated in
any case to provide funds to make payment upon tender of the Preferred
Securities for Remarketing.
(m) Under the Remarketing Agreement, the Sponsor, in its capacity as
Subordinated Deferrable Notes Issuer, shall be liable for, and shall pay, any
and all costs and expenses incurred in connection with the Remarketing, and the
Trust shall not have any liabilities for such costs and expenses; provided,
however, that for the performance of its services, the Remarketing Agent will
retain from the proceeds of the Remarketing an amount equal to 0.50% of the
aggregate stated liquidation amount of all remarketed Preferred Securities.
(n) The tender and settlement procedures set in this Section 7.13,
including provisions for payment by purchasers of the Preferred Securities in
the Remarketing, shall be subject to modification to the extent required by the
Depositary or if the book-entry system is no longer available for the Preferred
Securities at the time of the Remarketing, to facilitate the tendering and
remarketing of the Preferred Securities in certificated form. In addition, the
Remarketing Agent may modify the settlement procedures set forth herein in order
to facilitate the settlement process.
ARTICLE 8: DISSOLUTION AND TERMINATION OF THE TRUST
Section 8.1 Dissolution and Termination of the Trust.
(a) The Trust shall dissolve upon the earliest of:
(i) the bankruptcy of the Subordinated Deferrable Notes
Issuer;
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(ii) the filing of a certificate of dissolution 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) the entry of a decree of judicial dissolution of the
Sponsor or the Trust;
(iv) the time when all of the Securities shall have been
called for redemption and the amounts then due shall have been paid to
the Holders of the Securities;
(v) the direction by the Property Trustee, following the
occurrence and continuation of a Tax Event pursuant to which the Trust
is to be dissolved and all of the Subordinated Deferrable Notes
distributed to the Holders of the Securities in exchange for all of the
Securities;
(vi) at the Sponsor's sole discretion, by notice and direction
to the Property Trustee to distribute the Subordinated Deferrable Notes
to the Holders of the Securities in exchange for all of the Securities;
provided that the Sponsor will be required to obtain an opinion of
counsel that the distribution of the Subordinated Deferrable Notes
will not be taxable to the holders of the Preferred Securities for
United States federal income tax purposes; or
(vii) the time when all of the Regular Trustees and the
Sponsor have consented to dissolution of the Trust, provided such
action is taken before the issuance of any Securities.
(b) As soon as is practicable after the occurrence of an event referred
to in Section 8.1(a) and upon completion of the winding up and liquidation of
the Trust, the Regular Trustees shall terminate the Trust by executing and
filing a certificate of cancellation with the Secretary of State of the State of
Delaware.
(c) The provisions of Section 4.2 and Article 9 shall survive the
termination of the Trust.
Section 8.2 Liquidation Distribution Upon Dissolution of the Trust.
(a) In the event of any voluntary or involuntary liquidation,
dissolution, or
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winding-up of the Trust (each a "Liquidation") based on the occurrence of an
event specified in Section 8.1(a) (other than clauses (iv) or (v)), the Holders
of the Securities on the date of the Liquidation shall be entitled to receive on
a Pro Rata basis, after satisfaction of the Trust's liabilities to creditors,
Subordinated Deferrable Notes in an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to the
distribution rate of, and accrued and unpaid interest equal to accumulated and
unpaid Distributions on, such Securities in exchange for such Securities;
provided if the Liquidation occurs prior to the Purchase Contract Settlement
Date, the Subordinated Deferrable Notes receivable by the Holders shall be
transferred to the Collateral Agent.
(b) Notice of Liquidation shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not later than 30 nor more than 60
days prior to the date of the Liquidation to each Holder of Securities at such
Holder's address appearing in the Securities register. All notices of
Liquidation shall:
(i) state the date of the Liquidation;
(ii) state that from and after the date of the Liquidation,
the Securities will no longer be deemed to be outstanding and any
Certificates not surrendered for exchange will be deemed to represent
the Subordinated Deferrable Notes in a principal amount equal to the
stated liquidation amount of the Securities, bearing accrued and unpaid
interest in an amount equal to the accumulated and unpaid Distribution
on the Securities; and
(iii) provide such information with respect to the mechanics
by which Holders may exchange Certificates for Subordinated Deferrable
Notes, or if Section 8.2(d) applies receive a distribution, as the
Property Trustee shall deem appropriate.
(c) Except where Section 8.1(a)(iv) or (v) or Section 8.2(d) applies,
in order to affect the liquidation of the Trust and distribution of the Notes to
Holders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the date of the
Liquidation) and, either itself acting as exchange agent or through the
appointment of a separate exchange agent, shall establish such procedures as it
shall deem appropriate to effect the distribution of Subordinated Deferrable
Notes in exchange for the outstanding Certificates.
(d) In the event that, notwithstanding the other provisions of this
Section 8.2, whether because of an order for dissolution entered by a court of
competent
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jurisdiction or otherwise, distribution of the Subordinated Deferrable Notes in
the manner provided herein is determined by the Property Trustee not to be
practical, the property of the Trust shall be liquidated, and the Trust shall be
wound-up and terminated, by the Property Trustee in such manner as the Property
Trustee reason ably determines. In such event, on the date of the winding-up and
termination of the Trust, the Holders of the Securities on the date of the
Liquidation shall be entitled to receive, out of the assets of the Trust
available for distribution to the Holders of the Securities after satisfaction
of the Trust's liabilities to creditors, if any, cash or other immediately
available funds in an amount equal to the aggregate of the stated liquidation
amount of $25 per Security plus accumulated and unpaid Distributions thereon to
the date of payment (such amount being the "Liquidation Distribution"); provided
if the Liquidation occurs prior to the Purchase Contract Settlement Date, the
Redemption Price payable to the Collateral Agent, in liquidation of the Holders'
interests in the Preferred Securities, will be distributed to the Collateral
Agent, which in turn will apply an amount equal to the Redemption Amount of such
Redemption Price to purchase the Treasury Portfolio on behalf of the Holders of
the Securities and remit the remaining portion, if any, of such Redemption Price
to the Purchase Contract Agent for payment to the Holders. If, upon any such
Liquidation, the Liquidation Distribution can be paid only in part because the
Trust has insufficient assets available to pay the aggregate Liquidation
Distribution in full, then the amounts payable directly by the Trust on the
Securities shall be paid on a Pro Rata basis. The Holders of the Common
Securities shall be entitled to receive the Liquidation Distribution Pro Rata
with the Holders of the Preferred Securities, except that if an Indenture Event
of Default has occurred and is continuing, then the Preferred Securities shall
have a preference over the Common Securities with regard to the Liquidation
Distribution.
(e) After the date fixed for any distribution of Subordinated
Deferrable Notes upon dissolution of the Trust, (i) the Securities no longer
shall be deemed to be outstanding and (ii) the Certificates shall be deemed to
represent the Subordinated Deferrable Notes in a principal amount equal to the
stated liquidation amount of the Securities, bearing accrued and unpaid interest
in an amount equal to the accumulated and unpaid Distributions on the
Securities, until such Certificates are presented to the Regular Trustees or
agent for transfer or reissuance.
ARTICLE 9: LIMITATION OF LIABILITY OF HOLDERS OF
THE SECURITIES, THE DELAWARE TRUSTEE AND OTHERS
Section 9.1 Liability.
(a) Except as expressly set forth in this Declaration and the
Guarantee, the Sponsor and the Trustees:
(i) shall not be personally liable for the return of any
portion of the
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capital contributions (or any return thereon) of the Holders of the
Securities that will be made solely from assets of the Trust; and
(ii) shall not be required to pay to the Trust or to any
Holder of the Securities any deficit, upon dissolution of the Trust or
otherwise.
(b) Pursuant to Section 3803(a) of the Business Trust Act, the Holder
of the Common Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware; provided that the
Holders of the Common Securities shall be liable for all of the debts and
obligations of the Trust (other than with respect to the Securities) to the
extent such debts and obligations are not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the Holder
of the Preferred Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
Section 9.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or to 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
that 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, in
the case of the Property Trustee, negligence) or willful misconduct with respect
to such acts or omissions.
(b) Each 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 such
Indemnified Person reasonably believes to be 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 the Securities might properly be paid.
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Section 9.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
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 a
Covered Person and an Indemnified Person; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no
duty or obligation to give any consideration to any interest of or
factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not
be
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subject to any other or different standard imposed by this Declaration
or by applicable law.
Section 9.4 Indemnification.
(a) To the fullest extent permitted by applicable law, the Sponsor, in
its capacity as Subordinated Deferrable Notes Issuer, shall indemnify and hold
harmless each Indemnified Person from and against any loss, damage or claim
incurred by such Indemnified Person 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 authority conferred on such Indemnified Person by this Declaration, except
that no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions.
(b) The provisions of this Section 9.4 shall survive the termination of
this Declaration or the resignation or removal of any Trustee.
(c) The Sponsor or the Trust may purchase and maintain insurance on
behalf of any Person who is or was an Indemnified Person against any liability
asserted against him or her and incurred by him or her in any such capacity, or
arising out of his or her status as such, whether or not the Sponsor would have
the power to indemnify him or her against such liability under the provisions of
this Section 9.4.
(d) For purposes of this Section 9.4, references to "the Trust" shall
include, in addition to the resulting or surviving entity, any constituent
entity (including any constituent of a constituent) absorbed in a consolidation
or merger, so that any Person who is or was a director, trustee, officer or
employee of such constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent of another
entity, shall stand in the same position under the provisions of this Section
9.4 with respect to the resulting or surviving entity as he or she would have
had with respect to such constituent entity if its separate existence had
continued.
(e) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 9.4 shall continue, unless otherwise provided
when authorized or ratified, as to a Person who has ceased to be an Indemnified
Person and shall inure to the benefit of the heirs, executors and administrators
of such a Person.
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Section 9.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee (subject to Section 6.3(c)) may engage in or possess an
interest in other business ventures of any nature or description, independently
or with others, similar or dissimilar to the activities of the Trust, and the
Trust and the Holders of the 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
activities of the Trust, shall not be deemed wrongful or improper. Each Covered
Person, the Sponsor, the Delaware Trustee and the Property Trustee shall not 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 10: ACCOUNTING
Section 10.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
Section 10.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or shall cause to be kept, full books of account, records
and supporting documents, which shall reflect in reasonable detail each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes. The books of account
and the records of the Trust shall be examined by and reported upon as of the
end of each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Regular Trustees.
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(b) The Regular Trustees shall cause to be prepared and delivered to
each Holder 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 Regular Trustees shall cause to be duly prepared and delivered
to each Holder of Securities an annual United States federal income tax
information statement, required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall endeavor to deliver
all such statements within 30 days after the end of each Fiscal Year of the
Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed with
the appropriate taxing authority an annual United States federal income tax
return, on 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 on behalf
of the Trust with any state or local taxing authority.
Section 10.3 Banking.
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; provided that all payments of funds in
respect of the Subordinated Deferrable Notes held by the Property Trustee shall
be made directly to the Property Account and no other funds of the Trust shall
be deposited in the Property Account. The sole signatories for such accounts
shall be designated by the Regular Trustees; provided that the Property Trustee
shall designate the signatories for the Property Account.
Section 10.4 Withholding.
The Trust and the Regular Trustees shall comply with all
withholding requirements under United States federal, state and local law. The
Regular Trustees shall request, and the Holders of the Securities shall provide
to the Trust, such forms or certificates as are necessary to establish an
exemption from withholding with respect to each Holder of Securities and any
representations and forms as shall reasonably be requested by the Regular
Trustees to assist them in determining the extent of, and in fulfilling, the
Trust's withholding obligations. The Regular Trustees shall file required form
with applicable jurisdictions and, unless an exemption from withholding is
properly established by a Holder of Securities, shall remit amounts withheld
with respect to such 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 of Securities, the amount
withheld shall be deemed to be a distribution in the amount of the withholding
to such
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Holder. In the event of any claimed over withholding, a Holder shall be limited
to an action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.
ARTICLE 11: AMENDMENTS AND MEETINGS
Section 11.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may be amended only by a
written instrument approved and executed by the Sponsor and (i) the Regular
Trustees (or, if there are more than two Regular Trustees, a majority of the
Regular Trustees) and (ii) the Property Trustee (if the amendment affects the
rights, powers, duties, obligations or immunities of the Property Trustee) and
(iii) by the Delaware Trustee (if the amendment affects the rights, powers,
duties, obligations or immunities of the Delaware Trustee).
(b) No amendment shall be made, and any such purported amendment shall
be void and ineffective:
(i) unless, in the case of any proposed amendment, the Property
Trustee first has 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 that affects the
rights, powers, duties, obligations or immunities of the Property
Trustee, the Property Trustee first has 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 (which may be counsel to the
Sponsor or the Trust) that such amendment is
permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities);
and
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(iii) to the extent the result of such amendment would be
to
(A) cause the Trust to be classified other than
as a grantor trust for United States federal
income tax purposes;
(B) reduce or otherwise adversely affect the
powers of the Property Trustee in
contravention of the Trust Indenture Act; or
(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, (i) any amendment that would (A) adversely affect the powers,
preferences or special rights of the Securities, whether by way of amendment to
this Declaration or otherwise or (B) result in the dissolution, winding-up or
termination of the Trust other than pursuant to the terms of this Declaration
shall not be effective except with the approval of the Holders of at least a 66
2/3% in Liquidation Amount of the Securities; provided that if any amendment or
proposal referred to in clause (A) above would adversely affect only the
Preferred Securities or the Common Securities, then only the affected class will
be entitled to vote on such amendment or proposal, and such amendment or
proposal shall not be effective except with the approval of a 66 2/3% in
Liquidation Amount of the class of Securities affected thereby; and (ii) any
amendment that would (X) change the amount or timing of any distribution of the
Securities or otherwise adversely affect the amount of any distribution require
to be made in respect of the Securities as of a specified date or (Y) restrict
the right of a Holder of Securities to institute suit for the enforcement of
such payment on or after such date shall not be effective except with the
approval of each Holder of Securities affected thereby.
(d) This Section 11.1 shall not be amended without the consent of all
of the Holders of the Securities.
(e) Article 4 shall not be amended without the consent of the Holders
of the Common Securities.
(f) The rights of the Holders of the Common Securities under Articles
to increase or decrease the number of, and appoint and remove, Trustees shall
not be amended without the consent of the Holders of the Common Securities.
(g) Notwithstanding Section 11.1(c), this Declaration may be amended
without the consent of the Holders of the Securities, provided that such
amendment does not have a material adverse effect on the rights, preferences or
privileges of the
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Holders of the Securities:
(i) to cure any ambiguity;
(ii) to correct or supplement any provision in this
Declaration that may be defective or inconsistent with any other
provision of this Declaration;
(iii) to add to the covenants, restrictions or obligations of
the Sponsor;
(iv) to conform to any change in Rule 3a-5 or written change
in interpretation or application of Rule 3a-5 by any legislative body,
court, government agency or regulatory authority;
(v) to modify, eliminate and add to any provision of this
Declaration to ensure that the Trust will be classified as a grantor
trust for United States federal income tax purposes at all times that
any Securities are out standing or to ensure that the Trust will not be
required to register as an Investment Company under the Investment
Company Act; provided that such modification, elimination or addition
would not adversely affect in any material respect the rights,
privileges or preferences of any Holder of Securities; or
(vi) to facilitate the tendering, remarketing and settlement
of the Preferred Securities as contemplated by Section 7.13(n).
Section 11.2 Meetings of the Holders of the Securities; Action by
Written Consent.
(a) Meetings of the Holders of any class of Securities may be called at
any time by the Regular Trustees (or as provided in the terms of the Securities)
to consider and act on any matter on which Holders of such class of Securities
are entitled to act under the terms of this Declaration or the rules of any
stock exchange on which the Preferred Securities are listed or admitted for
trading. The Regular Trustees shall call a meeting of the Holders of such class
if directed to do so by the Holders of at least 10% in Liquidation Amount of
such class of Securities. Such direction shall be given by delivering to the
Regular Trustees a writing stating that the signing Holders of the Securities
wish to call a meeting and indicating the general or specific purpose for which
the meeting is to be called. The Holder or Holders of the Securities calling a
meeting shall specify in writing the Certificates held by such
86
Holder or Holders, 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 the Holders of
the Securities:
(i) Notice of any such meeting shall be given to all the Holders of
the 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 the Securities is permitted or
required under this Declaration or the rules of any stock exchange on
which the Preferred Securities are listed or admitted for trading, such
vote, consent or approval may be given at a meeting of the Holders of
the Securities. Any action that may be taken at a meeting of the
Holders of the Securities may be taken without a meeting and without
prior notice if a consent in writing setting forth the action so taken
is signed by the Holders of the 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 the 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 the Securities entitled to vote who
have not consented in writing. The Regular Trustees may specify that
any written ballot submitted to the Holders of the Securities for the
purpose of taking any action without a meeting shall be returned to the
Trust within the time specified by the Regular Trustees.
(ii) Each Holder of the Securities may authorize any Person to act
for it by proxy on any or all matters in which such Holder is entitled
to participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the
expiration of 11 months from the date thereof unless otherwise provided
in the proxy. Every proxy shall be revocable at the pleasure of the
Holder of Securities executing such proxy. Except as otherwise provided
herein, all matters relating to the giving, voting or validity of
proxies shall be governed by the General Corporation Law of the State
of Delaware relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware corporation and the Holders
of the Securities were stockholders of a Delaware corporation.
(iii) Each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the
Regular Trustees may designate.
(iv) Unless the Business Trust Act, this Declaration, the Trust
Indenture Act or the listing rules of any stock exchange on which the
87
Preferred Securities are then listed for trading otherwise provides,
the Regular Trustees, in their sole discretion, shall establish all
other provisions relating to meetings of Holders of the 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 the Securities, waiver
of any such notice, action by consent without a meeting without prior
notice, the establishment of a record date, quorum requirements, voting
in person or by proxy or any other matter with respect to the exercise
of any such right to vote.
ARTICLE 12: REPRESENTATIONS OF THE PROPERTY
TRUSTEE AND THE DELAWARE TRUSTEE
Section 12.1 Representations and Warranties of the Property Trustee.
The 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 such
Successor Property Trustee's acceptance of its appointment as Property Trustee,
that:
(a) the Property Trustee is a corporation or national banking
association duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization, with trust power and
authority to execute and deliver, and to carry out and perform its obligations
under the terms of, this Declaration;
(b) the Property Trustee satisfies the requirements set forth in
Section 6.3(a);
(c) the execution, delivery and performance by the Property Trustee of
this Declaration have 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 it constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(d) the execution, delivery and performance of this Declaration by the
Property Trustee do not conflict with, nor constitute a breach of, the articles
of
88
association or incorporation, as the case may be, or the by-laws (or other
similar organizational documents) of the Property Trustee; and
(e) no consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the execution
delivery or performance by the Property Trustee of this Declaration.
Section 12.2 Representations and Warranties of the Delaware Trustee.
The 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 such
Successor Delaware Trustee's acceptance of its appointment as Delaware Trustee,
that:
(a) the Delaware Trustee satisfies the requirements set forth in
Section 6.2 and has the power and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this Declaration and, if it
is not a natural person, is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation or
organization;
(b) the Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and this Declaration; and this
Declaration constitutes a legal, valid and binding obligation of the Delaware
Trustee under Delaware law, enforceable against it in accordance with its terms
subject to applicable bankruptcy, reorganization, moratorium, insolvency and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity or at law)
and
(c) no consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee of this Declaration.
ARTICLE 13: MISCELLANEOUS
Section 13.1 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 registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Property Trustee, the Delaware Trustee and the Holders of
the Securities):
89
CMS Energy Trust III
c/o CMS Energy Corporation
Fairlane Plaza South, Suite 1100
330 Town Center Drive
Dearborn, Michigan 48126
Attention: Corporate Secretary
Telephone No: (313) 436-9200
Fax No: (313) 436-9258
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as the Delaware Trustee may give notice of to the
Regular Trustees, the Property Trustee and the Holders of the Securities):
The Bank of New York (Delaware)
c/o The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Telephone No: (212) 815-3703
Fax No: (212) 815-5915
(c) if given to the Property Trustee, at its Corporate Trust Office to
the attention of Corporate Trust Trustee Administration (telephone no. (212)
815-3703 and fax no. (212) 815-5915) (or such other address as the Property
Trustee may give notice of to the Regular Trustees, the Delaware Trustee and the
Holders of the Securities);
(d) if given to the Holders of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holders of
the Common Securities may give notice of to the Property Trustee, the Delaware
Trustee and the Trust):
CMS Energy Trust III
c/o CMS Energy Corporation
Fairlane Plaza South, Suite 1100
330 Town Center Drive
Dearborn, Michigan 48126
Attention: Corporate Secretary
Telephone No: (313) 436-9200
Fax No: (313) 436-9258
90
(e) if given to any Holder of Preferred Securities, at such Holder's
address as set forth in the register 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 13.2 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, without regard to principles of conflicts of laws.
Section 13.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted in a manner consistent with
such classification.
Section 13.4 Headings.
The headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
Section 13.5 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 Trustee shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
Section 13.6 Partial Enforceability.
If any provision of this Declaration or the application of such
provision to any Person or circumstance is 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.
91
Section 13.7 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 such counter part 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.
92
IN WITNESS WHEREOF, the undersigned have caused these presents to
be executed as of the day and year first above written.
CMS ENERGY CORPORATION,
as Sponsor, Subordinated Deferrable Notes
Issuer and Common Securities Holder
By:
-----------------------------------------
Alan M. Wright, Senior Vice President
and Chief Financial Officer
THE BANK OF NEW YORK,
as Property Trustee
By:
-----------------------------------------
Name:
Title:
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By:
-----------------------------------------
Name:
Title:
Alan M. Wright, as Regular Trustee
Thomas A McNish, as Regular Trustee
93
EXHIBIT A
This Preferred Security is a Global Security within the meaning of the
Amended and Restated Declaration of CMS Energy Trust III hereinafter referred to
and is registered in the name of The Depository Trust Company, a New York
corporation (the "Depositary"), or a nominee of the Depositary. This Preferred
Security is exchangeable for Preferred Securities registered in the name of a
person other than the Depositary or its nominee only in the limited
circumstances described in the Declaration, and no transfer of this Preferred
Security (other than a transfer of this Preferred Security as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary) may be registered, except
in limited circumstances.
Unless this Preferred Security Certificate is presented by an
authorized representative of the Depositary to the issuer or its agent for
registration of transfer, exchange or payment, and any Preferred Security
Certificate issued is registered in the name of Cede & Co. or such other name as
registered by an authorized representative of the Depositary (and any payment
hereon is made to Cede & Co. or to such other entity as is requested by an
authorized representative of the Depositary), and except as otherwise provided
in the Amended and Restated Declaration of CMS Energy Trust III dated August 22,
2000, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL, since the registered owner hereof, Cede & Co., has an
interest herein.]
Certificate No. Number of Preferred Securities:
---------- ------------
CUSIP No. Aggregate Liquidation Amount: $
---------------- -----------
Certificate Evidencing Preferred Securities
of
CMS Energy Trust III
Preferred Securities
(liquidation amount $25 per Preferred Security)
CMS Energy Trust III, a statutory business trust created under the laws
of the State of Delaware (the "Trust"), hereby certifies that Cede & Co. (the
"Holder") is the registered owner of preferred securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the Preferred Securities (liquidation amount $25.00 per Preferred
Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the register of the Trust, in person or by a duly authorized
attorney, upon surrender of this certificate duly endorsed and in proper form
for transfer as provided in the Declaration (as defined below). The designation
rights, privileges, restrictions, preferences and other terms and provisions of
the Preferred Securities represented hereby are issued and shall in all respect
be
94
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust, dated as of August 22, 2000 (as the same may be amended from time to
time (the "Declaration"), among CMS Energy Corporation, as Sponsor, Alan M.
Wright and Thomas A. McNish as Regular Trustees, The Bank of New York, as
Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, and the
holders from time to time, of undivided beneficial interests in the assets of
the Trust. Capitalized terms used herein but not defined shall have the meaning
given them in the Declaration. The Holder is entitled to the benefits of the
Guarantee Agreement, dated as of August 22, 2000, as the same may be amended
from time to time, of CMS Energy Corporation, in respect of the Preferred
Securities. The Sponsor will provide a copy of the Declaration, the Guarantee
and the Indenture to a Holder without charge upon written request to the Sponsor
at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the terms of
the Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Subordinated Deferrable Notes as indebtedness of the
Sponsor and the Preferred Securities as evidence of undivided indirect
beneficial ownership interests in the Subordinated Deferrable Notes.
95
IN WITNESS WHEREOF, the Trust has executed this certificate
this day of , 2000.
CMS ENERGY TRUST III
By: Alan M. Wright
Regular Trustee
This is one of the Securities referred to in the within-mentioned
Declaration.
THE BANK OF NEW YORK, as
Property Trustee
By:
Title:
96
OPTION OF HOLDER TO ELECT PURCHASE
This form is to be used to make an election in the event of a Cash
Merger Event Offer, as set forth in Section 7.3(c) of the Declaration. If you
want to have only part of the Security purchased by the Company pursuant to
Section 7.3(c) of the Declaration, state the amount you elect to have purchased:
$
----------------------
Date:
-------------------
Your Signature:
-----------------------------------------
(Sign exactly as your name appears
on the face of this Security)
Signature Guarantee
97
EXHIBIT B
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS PROVIDED IN
THE DECLARATION (AS DEFINED BELOW)
Certificate No. Number of Common Securities:
------ ---------
Aggregate Liquidation Amount: $
------
Certificate Evidencing Common Securities
of
CMS Energy Trust III
Common Securities
(liquidation amount $25 per Common Security)
CMS Energy Trust III, a statutory business trust created under the laws
of the State of Delaware (the "Trust"), hereby certifies that CMS Energy
Corporation (the "Holder") is the registered owner of common
securities of the Trust representing an undivided beneficial interest in the
assets of the Trust designated the Common Securities (liquidation amount $25.00
per Common Security) (the "Common Securities"). Except as provided in the
Declaration (as defined below), the Common Securities are not transferable, and
any attempted transfer thereof shall be void. 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 August 22, 2000 (as the same may be amended from time to
time, the "Declaration"), among CMS Energy Corporation, as Sponsor, Alan M.
Wright and Thomas A. McNish as Regular Trustees, The Bank of New York, as
Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, and the
holders, from time to time, of undivided beneficial ownership interests in the
assets of the Trust. The Sponsor will provide a copy of the Declaration and the
Indenture to the Holder without charge upon written request to the Sponsor at
its principal place of business.
Upon receipt of this certificate, the Holder is bound by the terms of
the Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Subordinated Deferrable Notes as indebtedness of the
Sponsor and the Common Securities as evidence of an undivided indirect
beneficial ownership interest in the Subordinated Deferrable Notes.
98
IN WITNESS WHEREOF, the Trust has executed this certificate
this day of , 2000.
CMS ENERGY TRUST III
By:
Regular Trustee