EXHIBIT 4.11
FORM OF
AMENDED AND RESTATED TRUST AGREEMENT
OF
DETROIT EDISON TRUST [I/II]
Dated as of _________________
CROSS REFERENCE TABLE(1)
Section of Trust Indenture Act
of 1939, as amended Section of Agreement
310(a) ...............................................................5.3(a)
310(b) .......................................................5.3(c), 5.3(d)
310(c) .........................................................Inapplicable
311(a) ...............................................................2.2(b)
311(b) ...............................................................2.2(b)
311(c) .........................................................Inapplicable
312(a) ...............................................................2.2(a)
312(b) ...............................................................2.2(b)
312(c) .........................................................Inapplicable
313......................................................................2.3
314(a) .....................................................2.4, 2.7, 3.6(e)
314(b) .........................................................Inapplicable
314(c) ..................................................................2.5
314(d) .........................................................Inapplicable
314(e) ..................................................................2.5
314(f) .........................................................Inapplicable
315(a) ......................................................3.9(b); 3.10(a)
315(b) ...............................................................2.7(a)
315(c) ...............................................................3.9(a)
315(d) ...............................................................3.9(b)
316(a) ..................................................................2.6
316(b) ..................................................................2.6
316(c) ...............................................................3.6(e)
317(a) ...............................................................3.8(h)
317(b) .......................................................3.8(c); 7.2(a)
318...................................................................2.1(c)
- ---------------------
(1) This Cross-Reference Table does not constitute part of the
Agreement and shall not have any bearing upon the interpretation of any of
its terms or provisions.
Table of Contents
Page
----
ARTICLE I.
INTERPRETATION AND DEFINITIONS
Section 1.1 Definitions.....................................................................................1
ARTICLE II.
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application................................................................8
Section 2.2 Lists of Holders of Securities..................................................................9
Section 2.3 Reports by the Property Trustee.................................................................9
Section 2.4 Periodic Reports to Property Trustee............................................................9
Section 2.5 Evidence of Compliance With Conditions Precedent...............................................10
Section 2.6 Events of Default; Waiver......................................................................10
Section 2.7 Event of Default; Notice.......................................................................12
ARTICLE III.
ORGANIZATION
Section 3.1 Name...........................................................................................13
Section 3.2 Office.........................................................................................13
Section 3.3 Purposes.......................................................................................13
Section 3.4 Authority......................................................................................13
Section 3.5 Title to Property of the Trust.................................................................14
Section 3.6 Powers and Duties of the Administrative Trustees...............................................14
Section 3.7 Prohibition of Actions by the Trust and the Trustees...........................................17
Section 3.8 Powers and Duties of the Property Trustee......................................................18
Section 3.9 Certain Duties and Responsibilities of the Property Trustee....................................20
Section 3.10 Certain Rights of the Property Trustee.........................................................22
Section 3.11 Delaware Trustee...............................................................................24
Section 3.12 Not Responsible for Recitals or Issuance of Securities.........................................24
Section 3.13 Duration of Trust..............................................................................24
Section 3.14 Mergers........................................................................................24
ARTICLE IV.
SPONSOR
Section 4.1 Sponsor's Purchase of Common Securities........................................................26
Section 4.2 Covenants of the Sponsor.......................................................................26
Section 4.3 Rights and Responsibilities of the Sponsor.....................................................26
Section 4.4 Right to Proceed...............................................................................27
Section 4.5 Expenses.......................................................................................27
ARTICLE V.
TRUSTEES
Section 5.1 Number of Trustees.............................................................................28
Section 5.2 Delaware Trustee...............................................................................29
Section 5.3 Property Trustee; Eligibility..................................................................29
Section 5.4 Certain Qualifications of Administrative Trustees and Delaware Trustee Generally...............30
Section 5.5 Administrative Trustees........................................................................30
Section 5.6 Appointment; Removal and Resignation of Trustees...............................................30
Section 5.7 Vacancies Among Trustees.......................................................................32
Section 5.8 Effect of Vacancies............................................................................32
Section 5.9 Meetings.......................................................................................33
Section 5.10 Delegation of Power............................................................................33
i
Section 5.11 Merger, Conversion, Consolidation or Succession to Business....................................33
ARTICLE VI.
DISTRIBUTIONS
Section 6.1 Distributions..................................................................................34
ARTICLE VII.
ISSUANCE OF SECURITIES
Section 7.1 General Provisions Regarding Securities........................................................34
Section 7.2 Paying Agent and Registrar.....................................................................37
ARTICLE VIII.
TERMINATION OF TRUST
Section 8.1 Termination of Trust...........................................................................38
ARTICLE IX.
TRANSFER OF INTERESTS
Section 9.1 Transfer of Securities.........................................................................39
Section 9.2 Transfer or Exchange of Certificates...........................................................40
Section 9.3 Deemed Security Holders........................................................................40
Section 9.4 Book Entry Interests...........................................................................40
Section 9.5 Notices to Clearing Agency.....................................................................41
Section 9.6 Appointment of Successor Clearing Agency.......................................................41
Section 9.7 Definitive Trust Preferred Security Certificates...............................................41
Section 9.8 Mutilated, Destroyed, Lost or Stolen Certificates..............................................42
ARTICLE X.
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 10.1 Liability......................................................................................43
Section 10.2 Exculpation....................................................................................43
Section 10.3 Fiduciary Duty.................................................................................44
Section 10.4 Indemnification................................................................................45
Section 10.5 Outside Businesses.............................................................................47
Section 10.6 Trustees' Fees and Expenses....................................................................47
ARTICLE XI.
ACCOUNTING
Section 11.1 Fiscal Year....................................................................................48
Section 11.2 Certain Accounting Matters.....................................................................48
Section 11.3 Banking........................................................................................48
Section 11.4 Withholding....................................................................................49
ARTICLE XII.
AMENDMENTS AND MEETINGS
Section 12.1 Amendments.....................................................................................49
Section 12.2 Meetings of the Holders of Securities; Action by Written Consent...............................51
ARTICLE XIII.
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE
Section 13.1 Representations and Warranties of Property Trustee.............................................53
Section 13.2 Representations and Warranties of Delaware Trustee.............................................53
ARTICLE XIV.
MISCELLANEOUS
Section 14.1 Notices........................................................................................54
ii
Section 14.2 Governing Law..................................................................................55
Section 14.3 Intention of the Parties.......................................................................55
Section 14.4 Headings.......................................................................................56
Section 14.5 Successors and Assigns.........................................................................56
Section 14.6 Partial Enforceability.........................................................................56
Section 14.7 Entire Agreement...............................................................................56
Section 14.8 Remedies.......................................................................................56
Section 14.9 Counterparts...................................................................................56
EXHIBIT A Terms and Conditions of Securities
EXHIBIT A-1 Form of Trust Preferred Security Certificate
EXHIBIT A-2 Form of Common Security Certificate
iii
EXHIBIT 4.11
AMENDED AND RESTATED
TRUST AGREEMENT
OF
DETROIT EDISON TRUST [I/II]
AMENDED AND RESTATED TRUST AGREEMENT (the "Agreement") dated
and effective as of ________________, among the Trustees (as defined herein),
for the benefit of the Holders (as defined herein), and the Sponsor (as defined
herein).
WHEREAS, certain of the Trustees and the Sponsor created
Detroit Edison Trust [I/II] (the "Trust"), a Delaware statutory trust under the
Delaware Statutory Trust Act (as defined herein), pursuant to a Trust Agreement
dated as of ____________ (the "Original Agreement"), and a Certificate of Trust
filed with the Secretary of State of the State of Delaware on ____________;
WHEREAS, prior to the date hereof, no Securities (as defined
herein) have been issued);
WHEREAS, all of the Trustees and the Sponsor, by this
Agreement, intend to amend and restate each and every term and provision of the
Original Agreement;
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a Delaware statutory trust under the Delaware Statutory
Trust Act and to constitute this as the governing instrument of the Trust, in
consideration of the mutual covenants herein contained and other good and
valuable consideration, the receipt of which is hereby acknowledged, the
parties, intending to be legally bound, hereby agree as follows:
ARTICLE I.
INTERPRETATION AND DEFINITIONS
Section 1.1 Definitions
Unless the context otherwise requires or unless specified in
an Exhibit hereto:
(a) each capitalized term used in this Agreement but not
defined in the preamble has the respective meaning assigned to it in this
Section 1.1;
(b) a term defined anywhere in this Agreement has the same
meaning throughout;
(c) all references to "the Agreement" or "this Agreement"
are to this Agreement as modified, supplemented or amended from time to time,
and include Exhibits to this Agreement;
(d) all references in this Agreement to Articles, Sections and
Exhibits are to Articles and Sections of and Annexes and Exhibits to this
Agreement unless otherwise specified;
(e) a term defined in the Trust Indenture Act, either directly
or by reference therein, has the same meaning when used in this Agreement unless
otherwise defined in this Agreement;
(f) a reference to the singular includes the plural and vice
versa;
(g) the words "include," "includes" and "including" shall be
deemed to be followed by the phrase "without limitation;"
(h) all accounting terms used but not defined herein have the
meanings assigned to them in accordance with United States generally accepted
accounting principles as in effect at the time of computation; and
(i) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section, Exhibit or other subdivision.
"Administrative Trustee" has the meaning set forth in Section
5.1.
"Affiliate" has the meaning given to that term in Rule 405
under the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent or Registrar.
"Authorized Newspaper" means a daily newspaper, in the English
language, customarily published on each day that is a Business Day in The City
of New York and of general circulation in The City of New York.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Book Entry Interest" means a beneficial interest in a Global
Certificate registered in the name of a Clearing Agency or its nominee,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than Saturday, Sunday or
any day on which banking institutions in The City of New York are permitted or
required by any applicable law or executive order to close.
"Certificate" means a Common Security Certificate or a Trust
Preferred Security Certificate.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as
depository for the Trust 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 Trust
Preferred Securities. Unless otherwise specified in the Terms and Conditions,
DTC shall be the initial Clearing Agency.
2
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time the
Clearing Agency effects book entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Date" means the "Closing Time" and each "Date of
Delivery", if any, under the Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted and existing under the Exchange Act, or, if at any
time after the execution of this instrument such commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Security" has the meaning set forth in Section 7.1.
"Common Securities Guarantee" means the guarantee agreement
dated as of the date hereof and executed and delivered by the Sponsor and [Bank
One Trust Company, National Association], as trustee, for the benefit of the
Holders of the Common Securities, as such agreement may be modified,
supplemented or amended from time to time.
"Common Security Certificate" means a definitive certificate
in fully registered form representing a Common Security, which shall be prepared
by the Sponsor and a specimen of which shall be substantially in the form
attached hereto as Exhibit A-2.
"Company Indemnified Person" means (a) any Administrative
Trustee; (b) any Affiliate of any Administrative Trustee; (c) any officers,
directors, shareholders, members, partners, employees, representatives or agents
of any Administrative Trustee or any Affiliate of any Administrative Trustee; or
(d) any officer, employee or agent of the Trust or its Affiliates.
"Corporate Trust Office" means the office of the Property
Trustee in The City of New York at which the corporate trust business of the
Property Trustee shall, at any particular time, be principally administered,
which office at the date of execution of this Agreement is located at
__________________, New York, New York _____, Attention: ________________.
"Covered Person" means: (a) any officer, director,
shareholder, partner, member, representative, employee or agent of (i) the Trust
or (ii) the Trust's Affiliates; and (b) any Holder of Securities.
"Creditor" has the meaning set forth in Section 4.5.
"Debenture Event of Default" means an event of default under
the Debentures.
"Debenture Issuer" means The Detroit Edison Company, a
Michigan corporation, or any successor entity, in its capacity as issuer of the
Debentures under the Indenture.
3
"Debenture Trustee" means Bank One Trust Company, National
Association, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
"Debentures" means the debt securities to be purchased by the
Trust specified in the Terms and Conditions.
"Delaware Statutory Trust Act" means Chapter 38 of Title 12 of
the Delaware Code, 12 Del. C.ss.3801, et seq., as it may be amended from time to
time, or any successor legislation.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Direction" by a Person means a written direction signed:
(a) if the Person is a natural person, by that Person; or
(b) in any other case, in the name of such Person by one or
more Authorized Officers of that Person.
"Direct Action" has the meaning set forth in Section 3.8(e).
"Distribution" has the meaning set forth in the Terms and
Conditions.
"DTC" means The Depository Trust Company or any successor
entity.
"Event of Default" means a Debenture Event of Default [or any
Other Document Event of Default] has occurred and is continuing.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"Fiduciary Indemnified Person" means (a) the Property Trustee,
(b) the Delaware Trustee, (c) any Affiliate of the Property Trustee or the
Delaware Trustee, and (d) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Property Trustee or the Delaware Trustee.
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" or "holder" means a Person in whose name a Security
is registered, such Person being a beneficial owner within the meaning of the
Delaware Statutory Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Indenture specified in the Terms and
Conditions, between the Debenture Issuer and the Debenture Trustee under which
the Debentures are issued, as such indenture may be modified, supplemented or
amended from time to time, and includes any indenture supplemental thereto.
"Investment Company" means an entity required to register as
an investment company under the Investment Company Act.
4
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount" with respect to Securities of
any class means, except as provided elsewhere in this Agreement or by the Trust
Indenture Act, more than 50% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
any accrued and unpaid Distributions to the date upon which the voting or
written consent percentages are determined) of all outstanding Securities of
such class.
"Officers' Certificate" means, with respect to (A) the
Sponsor, a certificate signed by the [Chairman, President and Chief Executive
and Chief Operating Officer or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Controller, an Assistant Controller, the Secretary or
an Assistant Secretary] of the Sponsor and (B) any other Person, a certificate
signed by any two Authorized Officers of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Agreement shall comply with Section 314 of the Trust Indenture Act and
shall include:
(a) a statement that the individuals signing the Officers'
Certificate have read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such Officers' Certificate are based;
(c) a statement that, in the opinion of each such individual,
he or she has made such examination or investigation as, in such individual's
opinion, is necessary to enable such individual to express an informed opinion
as to whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of such
individuals, such condition or covenant has been complied with.
["Other Document" means any instrument or agreement
constituting Trust Property, other than the Debentures, specified in the Terms
and Conditions.
"Other Document Event of Default" means an event of default
under any Other Document, if any, that is specified in the Terms and Conditions
as an Other Document Event of Default.]
"Outstanding," with respect to any Securities, means, as of
the date of determination, all Securities theretofore executed and delivered
under this Agreement, except:
(a) Trust Preferred Securities theretofore cancelled by the
Property Trustee or delivered to the Property Trustee for cancellation or Common
Securities theretofore cancelled by an Administrative Trustee or delivered to
the Administrative Trustees for cancellation;
5
(b) Securities for whose payment, repayment or redemption
money in the necessary amount and currency has been theretofore deposited with
the Property Trustee or any Paying Agent for the Holders of such Securities,
provided that if such Securities are to be repaid or redeemed, notice of such
repayment or redemption has been duly given pursuant to this Agreement;
(c) Securities which have been paid or in exchange for or in
lieu of which other securities have been executed and delivered pursuant to this
Agreement; and
(d) if the Securities are convertible or exchangeable into
other securities or other property, Securities converted or exchanged as
contemplated by this Agreement if such other securities have or other property
has been either (i) delivered to the Holders of such Securities in accordance
with this Agreement or (ii) deposited with and are held by the Property Trustee
or any Paying Agent in trust for the Holders of such Securities in accordance
with this Agreement, provided in the case of this clause (ii) that any
applicable notice of conversion or exchange has been duly given to the Holders
thereof pursuant to this Agreement;
provided, however, that in determining whether the Holders of the requisite
liquidation amount of outstanding Trust Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Trust Preferred Securities owned by the Sponsor or any Administrative Trustee or
any Affiliate of the Sponsor or any Administrative Trustee shall be disregarded
and deemed not to be outstanding, except that (i) in determining whether any
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Trust Preferred
Securities that such Trustee actually knows to be so owned shall be so
disregarded and (ii) the foregoing shall not apply at any time when all of the
outstanding Trust Preferred Securities are owned by the Sponsor, one or more of
the Trustees and/or any such Affiliate. Trust Preferred Securities so owned
which have been pledged in good faith may be regarded as outstanding if the
pledgee establishes to the satisfaction of the Administrative Trustees the
pledgee's right so to act with respect to such Trust Preferred Securities and
that the pledgee is not the Sponsor or any Affiliate of the Sponsor.
"Paying Agent" has the meaning set forth in Section 7.2(a).
"Payment Amount" has the meaning set forth in Section 6.1.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Property Trustee Account" has the meaning set forth in
Section 3.8(c).
6
"Quorum" means, with respect to the Administrative Trustees, a
majority of the Administrative Trustees or, if there are only two Administrative
Trustees, both of them or, if there is only one Administrative Trustee, such
Person.
"Registrar" has the meaning set forth in Section 7.2(b).
"Related Party" means, with respect to the Sponsor, any direct
or indirect wholly owned subsidiary of the Sponsor or any other Person that
owns, directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property
Trustee, any officer within the Corporate Trust Office of the Property Trustee
with direct responsibility for the Property Trustee's obligations under this
Agreement and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Securities" means the Common Securities and the Trust
Preferred Securities.
"Securities Guarantees" means the Common Securities Guarantee
and the Trust Preferred Securities Guarantee.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Sponsor" means The Detroit Edison Company, a Michigan
corporation, or any successor entity, in its capacity as sponsor of the Trust.
"State" means any of the 50 states in the United States or the
District of Columbia.
"Successor Delaware Trustee" has the meaning set forth in
Section 5.6(b)(ii).
"Successor Entity" has the meaning set forth in Section
3.14(b)(i).
"Successor Property Trustee" has the meaning set forth in
Section 3.8(f)(ii).
"Super Majority" has the meaning set forth in Section
2.6(a)(ii).
"10% in liquidation amount" with respect to either the Common
Securities or the Trust Preferred Securities means, except as provided elsewhere
in this Agreement or by the Trust Indenture Act, 10% or more of the aggregate
liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus any accrued and unpaid Distributions
to the date upon which the voting percentages are determined) of all such
outstanding Common Securities or Trust Preferred Securities.
"Terms and Conditions" means the terms and conditions of the
Common Securities and the Trust Preferred Securities in the form attached hereto
as Exhibit A.
7
"Trustee" or "Trustees" means each Person who has signed this
Agreement as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Trust Preferred Security" has the meaning set forth in
Section 7.1(a).
"Trust Preferred Security Beneficial Owner" means, with
respect to a Book Entry Interest, a Person who is the beneficial owner of such
Book Entry Interest, as reflected on the books of the Clearing Agency, or on the
books of a Person maintaining an account with such Clearing Agency (directly as
a Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Trust Preferred Security Certificate" means a certificate
representing a Trust Preferred Security, which shall be prepared by the Sponsor
and a specimen of which shall be substantially in the form attached hereto as
Exhibit A-1.
"Trust Preferred Securities Guarantee" means the guarantee
agreement dated as of the date hereof executed and delivered by the Sponsor and
[Bank One Trust Company, National Association], as trustee, for the benefit of
the Holders, as such agreement may be modified, supplemented or amended from
time to time.
"Trust Property" means (a) the Debentures, (b) any Other
Documents, (c) any cash on deposit in, or owing to, the Property Trust Account,
and (d) all proceeds and rights in respect of the foregoing or any other
property and assets for the time being held or deemed to be held by the Property
Trustee pursuant to this Agreement.
"Underwriting Agreement" means the underwriting agreement for
the offering and sale of Trust Preferred Securities, including any amendments or
supplements thereto.
ARTICLE II.
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application.
(a) This Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Agreement and shall, to the
extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a
trustee for the purposes of the Trust Indenture Act.
8
(c) If and to the extent that any provision of this Agreement
limits, qualifies or conflicts with the duties imposed by ss.ss. 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) Any application of the Trust Indenture Act to this
Agreement shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
Section 2.2 Lists of Holders of Securities.
(a) In accordance with ss. 312(a) of the Trust Indenture Act,
the Administrative Trustees, on behalf of the Trust, shall provide to the
Property Trustee:
(i) within 14 days after each record date for payment of
Distributions or such other dates as are set forth in the Terms and
Conditions, a list, in such form as the Property Trustee may reasonably
require, of the names and addresses of the Holders of the Securities
("List of Holders") as of such date, provided that the Administrative
Trustees, on behalf of the Trust, shall not be obligated to provide
such List of Holders at any time that the Property Trustee is the
Registrar or the List of Holders does not differ from the most recent
List of Holders given to the Property Trustee by the Administrative
Trustees on behalf of the Trust; and
(ii) at any other time, within 30 days of receipt by the Trust
of a written request by the Property Trustee for a List of Holders as
of a date no more than 14 days before such List of Holders is given to
the Property Trustee. The Property Trustee shall preserve, in as
current a form as is reasonably practicable, all information contained
in the Lists of Holders given to it or which it receives in the
capacity as Paying Agent or Registrar (if acting in such capacity),
provided that the Property Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations
under ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
Section 2.3 Reports by the Property Trustee.
Within 60 days after [______ 15] of each year, commencing with
the [______ 15] that first occurs following the issuance of the Securities, the
Property Trustee shall provide to the Holders of the Trust Preferred Securities
such reports as are required by ss. 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by ss. 313 of the Trust Indenture Act. The
Property Trustee shall also comply with the requirements of ss. 313(d) of the
Trust Indenture Act.
Section 2.4 Periodic Reports to Property Trustee.
The Administrative Trustees, on behalf of the Trust, shall
provide to the Property Trustee such documents, reports and information as
required by ss. 314 of the Trust Indenture Act (if any) and the compliance
certificate required by ss. 314 of the Trust Indenture Act in the form, in the
manner and at the times required by ss. 314 of the Trust Indenture Act.
9
Section 2.5 Evidence of Compliance With Conditions Precedent.
Each of the Sponsor and the Administrative Trustees, on behalf
of the Trust, shall provide to the Property Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Agreement that
relate to any of the matters set forth in ss. 314(c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to
ss. 314(c)(1) may be given in the form of an Officers' Certificate.
Section 2.6 Events of Default; Waiver.
(a) The Holders of not less than a Majority in liquidation
amount of Trust Preferred Securities may, by vote or written consent, on behalf
of the Holders of all of the Trust Preferred Securities, waive any past Event of
Default in respect of the Trust Preferred Securities and its consequences,
provided that, if the corresponding Debenture Event of Default [or Other
Document Event of Default]:
(i) is not waivable under the Debentures [or any Other
Document, if any, as the case may be,] the Event of Default under this
Agreement shall also not be waivable; or
(ii) requires the consent or vote of greater than a
majority in principal amount of the holders of the Debentures [or more
than a majority of other interests in such Other Document, as the case
may be] (a "Super Majority"), to be waived under the Indenture [or
such Other Document, as the case may be,] the Event of Default under
this Agreement may only be waived by the vote of the relevant Super
Majority in liquidation amount of Holders of the Trust Preferred
Securities.
The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Agreement and the Trust
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
Debenture Event of Default [or Other Document Event of Default] shall cease to
exist, and any Event of Default with respect to the Trust Preferred Securities
arising therefrom shall be deemed to have been cured, for every purpose of this
Agreement, but no such waiver shall extend to any subsequent or other default or
Event of Default with respect to the Trust Preferred Securities or impair any
right consequent thereon. Any waiver by the Holders of the Trust Preferred
Securities of an Event of Default with respect to the Trust Preferred Securities
shall also be deemed to constitute a waiver by the Holders of the Common
Securities of any such Event of Default with respect to the Common Securities
for all purposes of this Agreement without any further act, vote, or consent of
the Holders of the Common Securities.
The Holders of a Majority in liquidation amount of the Trust
Preferred 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, including the right to direct the Property Trustee to exercise the
remedies available to it as a holder of the Debentures [and any Other
Documents;] provided, however, that (subject to the provisions of Section 3.9)
the Property Trustee shall have the right to decline to follow any such
direction if the Property Trustee shall determine that the action so
10
directed would be unjustly prejudicial to the Holders not taking part in such
direction or if the Property Trustee, being advised by competent legal 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.
(b) The Holders of a Majority in liquidation amount of the
Common Securities may, by vote or consent, on behalf of the Holders of all of
the Common Securities, waive any past Event of Default with respect to the
Common Securities and its consequences, provided that, if the underlying Event
of Default under the Indenture:
(i) is not waivable under the Debentures or Other Document,
except where the Holders of the Common Securities are deemed to have
waived such Event of Default under this Agreement as provided elsewhere
in this Section 2.6, the Event of Default under this Agreement shall
also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be
waived, except where the Holders of the Common Securities are deemed to
have waived such Event of Default under this Agreement as provided
below in this Section 2.6, such Event of Default under this Agreement
may only be waived by the vote or consent of the Holders of at least
the proportion in aggregate liquidation amount of the Common Securities
that the relevant Super Majority represents of the aggregate principal
amount of the Debentures outstanding;
provided further, that, notwithstanding (i) or (ii) above, each Holder of the
Common Securities shall be deemed to have waived any such Event of Default and
all Events of Default with respect to the Common Securities and its consequences
if all Events of Default with respect to the Trust Preferred Securities have
been cured, waived or otherwise eliminated, and until such Events of Default
have been so cured, waived or otherwise eliminated, the Property Trustee will be
deemed to be acting solely on behalf of the Holders of the Trust Preferred
Securities and only the Holders of the Trust Preferred Securities will have the
right to direct the Property Trustee in accordance with the terms of this
Agreement and the Securities. The foregoing provisions of this Section 2.6(b)
shall be in lieu of ss.ss.316(a)(1)(A) and 316 (a)(1)(B) and of the Trust
Indenture Act and such ss.ss. 316(a)(1)(A) and 316 (a)(1)(B) of the Trust
Indenture Act are hereby expressly excluded from this Agreement and the
Securities, as permitted by the Trust Indenture Act. Subject to the foregoing
provisions of this Section 2.6(b), upon such waiver, any such Debenture Event of
Default [or Other Document Event of Default] shall cease to exist, and any Event
of Default with respect to the Common Securities arising therefrom shall be
deemed to have been cured for every purpose of this Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default with
respect to the Common Securities or impair any right consequent thereon.
(c) A waiver of a Debenture Event of Default [or Other
Document Event of Default] by the Property Trustee at the direction of the
Holders of the Trust Preferred Securities constitutes a waiver of the
corresponding Event of Default with respect to the Trust Preferred Securities
under this Agreement. Any waiver of a Debenture Event of Default [or Other
Document Event of Default] by the Property Trustee at the direction of the
Holders of the Trust
11
Preferred Securities shall also be deemed to constitute a waiver by the Holders
of the Common Securities of the corresponding Event of Default under this
Agreement with respect to the Common Securities for all purposes of this
Agreement without 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
ss.316(a)(1)(B) of the Trust Indenture Act and such ss.316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Agreement and the
Securities, as permitted by the Trust Indenture Act.
(d) The right of any Holder to receive payment of
Distributions in accordance with this Agreement and the terms of the Securities
on or after the respective payment dates therefor, or to institute suit for the
enforcement of any such payment on or after such payment dates, shall not be
impaired without the consent of each such Holder.
Section 2.7 Event of Default; Notice.
(a) The Property Trustee shall, within 90 days after a
Responsible Officer of the Property Trustee obtains actual knowledge of the
occurrence of a default, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all defaults known to the Property Trustee
other than defaults that have been cured or waived before the giving of such
notice (the term "defaults" for the purposes of this Section 2.7(a) being hereby
defined to include Debenture Events of Default [and Other Document Events of
Default, if any,] not including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein); provided that,
except for a default in the payment of principal of (or premium, if any) or
interest on, or in the delivery of any cash, securities or other property in
exchange for or upon conversion or redemption of or otherwise in accordance with
the terms of, any Debenture [or Other Document] or the Securities, the Property
Trustee shall be protected in withholding such notice if and so long as a
Responsible Officer of the Property Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge
of any default except:
(i) a default under Sections 501(1) and 501(2) of the
Indenture;
(ii) any failure to deliver any cash, securities or other
property in exchange for or upon conversion or redemption of or
otherwise in accordance with the terms of the Debentures [or Other
Documents] or the Securities; and
(iii) any default as to which the Property Trustee shall
have received written notice or of which a Responsible Officer of the
Property Trustee shall have actual knowledge.
(c) The Sponsor and the Administrative Trustee shall file
annually within 30 days after [______ 15] of each year, commencing with the
[______ 15] that first occurs following the issuance of the Securities, with the
Property Trustee in accordance with Section 314(a)(4) of the Trust Indenture Act
a certification as to whether or not they are in compliance with all the
conditions applicable to them under this Agreement.
12
ARTICLE III.
ORGANIZATION
Section 3.1 Name.
The Trust is named "Detroit Edison Trust [I/II]," as such name
may be modified from time to time in accordance with the Delaware Statutory
Trust Act. The Administrative Trustees shall give prompt written notice of any
change in the name of the Trust to the Delaware Trustee, the Property Trustee
and 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 Administrative
Trustees.
Section 3.2 Office.
The address of the principal office of the Trust is c/o The
Detroit Edison Company, 2000 2nd Avenue, Detroit, Michigan 48226-1279. On ten
Business Days prior written notice to the Property Trustee and Holders of the
Securities, the Administrative Trustees may designate another principal office.
Section 3.3 Purposes.
The exclusive purposes and functions of the Trust are, and the
Trust shall have the power and authority (a) to issue and sell the Securities
and use the gross proceeds from such sale, to acquire the Debentures and to own
Trust Property and conduct its business as described herein, (b) to enter into
and perform its obligations under the Underwriting Agreement and each Other
Document, to which the Trust is a party in connection herewith and (c) to engage
in only those other activities necessary or incidental thereto. The Trust shall
not borrow money, issue debt or reinvest proceeds derived from investments,
pledge any of its assets, execute mortgages or otherwise undertake (or permit to
be undertaken) any activity that would cause the Trust not to be classified for
United States federal income tax purposes as a grantor trust. It is the intent
of the parties to this Agreement for the Trust to be classified as a grantor
trust for United States federal income tax purposes under Subpart E of
Subchapter J of the Code, pursuant to which the owners of the Trust Preferred
Securities and the Common Securities will be the owners of the Trust for United
States federal income tax purposes, and such owners will include directly in
their gross income the income, gain, deduction or loss of the Trust as if the
Trust did not exist. By the acceptance of this Agreement, neither the Trustees
nor the Sponsor or the Holders of the Trust Preferred Securities or Common
Securities will take any position for United States federal income tax purposes,
or permit the Trust to make any election, which is contrary to the
classification of the Trust as a grantor trust.
Section 3.4 Authority.
Subject to the limitations provided in this Agreement and to
the specific duties of the Property Trustee, the Administrative Trustees shall
have exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Administrative Trustees in accordance with their powers
shall constitute the act of and serve to bind the Trust and an action taken by
the Property Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no Person shall be required to inquire into the
authority of the Trustees to bind the
13
Trust. Persons dealing with the Trust are entitled to rely conclusively on the
power and authority of the Trustees as set forth in this Agreement.
Section 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Trust
Property and the Property Trustee Account or as otherwise provided in this
Agreement, legal title to all assets of the Trust shall be vested in the Trust.
A Holder shall not have legal title to any part of the assets of the Trust, but
shall have an undivided beneficial interest in the assets of the Trust.
Section 3.6 Powers and Duties of the Administrative Trustees.
The Administrative Trustees shall have the power, duty and
authority, which shall be exclusive except as otherwise set forth herein, and
are hereby authorized and directed to cause the Trust to engage in the following
activities:
(a) execute, deliver, issue and sell the Trust Preferred
Securities and the Common Securities in accordance with this Agreement;
provided, however, that the Trust may issue no more than one series of Trust
Preferred Securities and no more than one series of Common Securities, and,
provided further, that there shall be no interests in the Trust other than the
Securities, and the issuance of Securities shall be limited to a simultaneous
issuance of both Trust Preferred Securities and Common Securities on each
Closing Date;
(b) in connection with the issue and sale of the Trust
Preferred Securities:
(i) assist in filing with the Commission any registration
statement and any prospectus relating to the registration statement on
Form S-3 prepared by the Sponsor, including any amendments or
supplements thereto, pertaining to the Trust Preferred Securities and
to take any other action relating to the registration and sale of the
Trust Preferred Securities under federal and state securities laws;
(ii) execute and file any documents prepared by the
Sponsor, or take any acts as determined by the Sponsor to be necessary
in order to qualify or register all or part of the Trust Preferred
Securities in any State in which the Sponsor has determined to qualify
or register such Trust Preferred Securities for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the New York Stock Exchange, Inc. or any other national
stock exchange or the Nasdaq Stock Market's National Market for listing
or quotation of any Trust Preferred Securities;
(iv) execute and file with the Commission any
registration statement on Form 8-A, including any amendments thereto,
prepared by the Sponsor, relating to the registration of the Trust
Preferred Securities under Section 12(b) or 12(g) of the Exchange Act;
(v) execute and enter into and deliver the Underwriting
Agreement providing for the sale of the Trust Preferred Securities;
14
(vi) execute and deliver letters, documents or
instruments with DTC and other Clearing Agencies relating to the Trust
Preferred Securities;
(vii) execute the Terms and Conditions and attach them to
this Agreement; and
(viii) execute, enter into or file any other instrument,
agreement, certificate or other document negotiated or prepared by the
Sponsor on behalf of the Trust, [including any Other Document to be
entered into or held by the Trust,] and to take such other action, in
each case as the Administrative Trustees or any of them deem necessary
or incidental (and not otherwise covered by the power of the other
Trustees hereunder or under the Securities), in connection with the
issuance, the sale or the terms of any Securities and the investment by
the Trust in the Trust Property, including any remarketing, auction or
similar agreements.
(c) acquire the Debentures [and any Other Documents] with the
proceeds of the sale of the Trust Preferred Securities and the Common
Securities; provided, however, that the Administrative Trustees shall cause
legal title to the Debentures [and any Other Documents] to be acquired by the
Trust on a Closing Date to be held of record in the name of the Property Trustee
for the benefit of the Trust and the Holders of the Trust Preferred Securities
and the Holders of Common Securities;
(d) give the Sponsor and the Property Trustee prompt written
notice of the occurrence of any event that, in accordance with this Agreement,
may require that a notice be sent to Holders, including events that may result
in an Event of Default, or any redemption, conversion or exchange of or deferral
of distributions on the Securities;
(e) establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and with
respect to, for the purposes of ss.316(c) of the Trust Indenture Act,
Distributions, voting rights, any repayments, any redemptions, any conversions
and any exchanges, and to issue relevant notices to the Holders of Trust
Preferred Securities and Holders of Common Securities as to such actions and
applicable record dates;
(f) take all actions and perform such duties as may be
required of the Administrative Trustees pursuant to the terms of the Securities
and this Agreement;
(g) to the fullest extent permitted by law, bring or defend,
pay, collect, compromise, arbitrate, resort to legal action, or otherwise adjust
claims or demands of or against the Trust ("Legal Action"), unless pursuant to
Section 3.8(e) the Property Trustee has the exclusive power to bring such Legal
Action;
(h) employ or otherwise engage employees and agents (who may
be designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
15
(j) give the certificate required by ss.314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Administrative Trustee;
(k) incur expenses that are necessary, appropriate, convenient
or incidental to carry out any of the purposes of the Trust;
(l) act as, or appoint another Person to act as, Registrar and
transfer agent for the Securities;
(m) take all action that may be necessary or appropriate for
the preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory trust under the laws of the State of
Delaware and of each other jurisdiction in which such existence is necessary to
protect the limited liability of the Holders of the Trust Preferred Securities
or to enable the Trust to effect the purposes for which the Trust was created;
(n) take any action, not inconsistent with this Agreement or
with applicable law, that the Administrative Trustees determine in their
discretion to be necessary or incidental in carrying out the activities of the
Trust, 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 for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure
that the Debentures will be treated as indebtedness of the Debenture
Issuer for United States federal income tax purposes,
provided, in each case, that such action does not adversely affect the interests
of Holders;
(o) 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 on behalf of the Trust; and
(p) execute all documents or instruments, perform all duties
and powers, and do all things for and on behalf of the Trust in all matters
which the Administrative Trustees deem necessary or incidental to the foregoing.
The Administrative Trustees must exercise the powers set forth
in this Section 3.6 in a manner that is consistent with the purposes of the
Trust set out in Section 3.3. None of the Administrative Trustees shall take any
action that is inconsistent with the purposes of the Trust set forth in Section
3.3.
Subject to this Section 3.6, the Administrative Trustees shall
have none of the powers or the authority of the Property Trustee set forth in
Section 3.8. No permissive power or authority available to the Administrative
Trustees shall be construed to be a duty.
16
Any expenses incurred by the Administrative Trustees pursuant
to this Section 3.6 shall be reimbursed by the Sponsor.
The Administrative Trustees shall take all actions on behalf
of the Trust that are not specifically required by this Agreement to be taken by
any other Trustee.
Section 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees shall not cause the
Trust to, engage in any activity other than as required or authorized by this
Agreement. In particular, the Trust shall not and the Trustees shall not cause
the Trust to:
(i) invest any proceeds received by the Trust from
holding the Debentures or other Trust Property, but shall distribute
all such proceeds to Holders of Securities pursuant to the terms of
this Agreement and of the Securities;
(ii) acquire or vary any assets other than as expressly
provided herein;
(iii) possess Trust Property for other than a Trust
purpose;
(iv) make any loans or incur any indebtedness for
borrowed money, other than loans represented by the Debentures or other
Trust Property;
(v) possess any power or otherwise act in such a way as
to vary the Trust assets or the terms of the Securities in any way
whatsoever;
(vi) sell, assign, transfer, exchange, mortgage, pledge,
set-off or otherwise dispose of any of the Trust Property or interests
therein, including to Holders, except as provided in this Agreement;
(vii) take or consent to any action that would result in
the placement of a lien on any Trust Property;
(viii) issue any securities or other evidences of
beneficial ownership of, or beneficial interest in, the Trust other
than the Securities; or
(ix) other than as provided in this Agreement, (A) direct
or exercise any remedy, trust or power with respect to the Debentures,
or any other instrument or agreement constituting Trust Property, (B)
waive any past default that is waivable under the Indenture [or any
Other Document,] (C) exercise any right to rescind or annul any
declaration that the principal of or other amounts payable or other
property deliverable under the Debentures [or amounts payable or other
property deliverable under any Other Document] shall be due and
payable, or (D) consent to any amendment, modification or termination
of the Indenture or the Debentures [or any Other Document,] in the case
of each of clauses (A) through (D), (x) without the approval of a
Majority in liquidation amount with respect to the Securities or, where
a consent under the Indenture [or Other Document, as the case may be,]
would require the consent of each holder of Debentures [or other
interests, as the case may be,] affected thereby, of each Holder of
Securities, and (y) unless the Trust shall have received an opinion of
nationally recognized independent tax counsel to the effect that the
Trust will not, as a result of such action, fail to be classified as a
grantor trust for such purposes.
17
Section 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Trust Property 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 Trust Property shall vest automatically in each
Person who may hereafter be appointed as Property Trustee in accordance with
Section 5.6. Such vesting and cessation of title shall be effective whether or
not conveyancing documents with regard to the Trust Property have been executed
and delivered.
(b) The Property Trustee shall not transfer its right, title
and interest in the Trust Property to the Administrative Trustees or to the
Delaware Trustee (if the Property Trustee does not also act as Delaware Trustee)
or, except in accordance with the provisions of this Agreement and the
Securities, any other Person.
(c) The Property Trustee shall:
(i) establish and maintain one or more segregated
non-interest bearing trust accounts (collectively, the "Property
Trustee Account") in the name of and under the exclusive control of the
Property Trustee on behalf of the Trust and the Holders and, upon the
receipt of funds in respect of the Trust Property, deposit such funds
into the Property Trust Account and, upon the receipt of funds
distributed to the Property Trustee in respect of the Trust Property
held by the Property Trustee, deposit such funds into the Property
Trustee Account, and make distributions of such funds out of the
Property Trust Account to the Holders of the Trust Preferred Securities
and the Holders of the Common Securities in accordance with the terms
of this Agreement and the Securities. Funds in the Property Trustee
Account shall be held uninvested until disbursed in accordance with
this Agreement and the Securities. The Property Trustee Account shall
be one or more accounts maintained with one or more banking
institutions (which may include the Property Trustee if it qualifies
hereunder) the rating on whose long-term unsecured indebtedness is
rated at least "A" or above by a "nationally recognized statistical
rating organization," as that term is defined for purposes of Rule
436(g)(2) under the Securities Act;
(ii) upon receipt of any Trust Property on each Closing
Date and the receipt of any property other than funds distributed to
the Property Trustee in respect of Trust Property held by the Property
Trustee, hold such other property in safe keeping and make
distributions of such other property to the Holders of the Trust
Preferred Securities and the Holders of the Common Securities in
accordance with the terms of this Agreement and the Securities; and
(iii) engage in such ministerial activities as shall be
necessary or incidental to hold the Trust Property in accordance with
the provisions hereof and to effect distributions on and any
redemption, repayment, conversion or exchange of the Trust Preferred
Securities or the Common Securities and the distribution of all or any
part of the Trust Property to Holders in liquidation of the Trust or
otherwise, in each case in accordance with the terms of this Agreement
and the Securities.
18
(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 the Securities and this Agreement.
(e) Subject to Section 3.9(a), the Property Trustee shall take
any Legal Action which arises out of or in connection with an Event of Default
of which a Responsible Officer of the Property Trustee has actual knowledge or
the Property Trustee's duties and obligations under this Agreement, the Delaware
Statutory Trust Act or the Trust Indenture Act; provided, however, that if the
Property Trustee fails to enforce its rights under this Agreement and the
Debentures [or any Other Document] after a Holder of Trust Preferred Securities
has made a written request, such Holder of Trust Preferred Securities may, to
the fullest extent permitted by applicable law, institute a legal proceeding
against the Debenture Issuer [or any obligor under any Other Document, as the
case may be,] without first instituting any legal proceeding against the
Property Trustee or any other Person. Notwithstanding the foregoing, if an Event
of Default has occurred and is continuing and such event is attributable to (i)
the failure of the Debenture Issuer to pay interest or any premium on or
principal of the Debentures on the date such interest or principal is otherwise
payable (including, in the case of repayment or redemption, on the repayment or
redemption date) or, if the Debentures are exchangeable or convertible, the
failure of the Debenture Issuer to convert or exchange the Debentures into or
for other property in accordance with the terms thereof, [or (ii) the failure of
any obligor under any Other Document to pay or deliver cash, securities or other
property in accordance with the terms of such Other Document,] then, [in the
case of (i) and (ii),] a Holder of Trust Preferred Securities may directly
institute a proceeding (a "Direct Action") for enforcement of payment or
delivery to such Holder of the principal of or interest on or other property
deliverable upon the exchange or conversion of Debentures having a principal
amount equal to the aggregate liquidation amount of the Trust Preferred
Securities of such holder on or after the due date specified in the Debentures
[or any cash, securities or other property that is required to be paid or
delivered pursuant to such Other Document on or after the due date therefor]
equal to the percentage of outstanding securities represented by such Holder's
Securities. In connection with such Direct Action, the rights of the Holders of
Common Securities will be subordinated to the rights of such Holders of Trust
Preferred Securities. Except as provided in the preceding sentences, the Holders
of Trust Preferred Securities will not be able to exercise directly any other
remedy available to the holders of the Debentures or Other Documents.
(f) The Property Trustee shall continue to serve as a Trustee
until either:
(i) the Trust has been completely dissolved and wound up
and the proceeds of the liquidation distributed to the Holders of
Securities and the Trust is terminated, in accordance with the terms of
the Securities and this Agreement; or
(ii) a successor Property Trustee has been appointed and
has accepted that appointment in accordance with Section 5.6 (a
"Successor Property Trustee").
(g) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of the Trust as holder of
Debentures under the Indenture [and as beneficiary of or party to any Other
Document] and, if an Event of Default actually known to a Responsible Officer
of the Property Trustee occurs and is continuing, the Property Trustee shall,
19
for the benefit of Holders of the Securities, enforce the rights of the Trust as
holder of the Debentures [and as beneficiary of or party to any Other Document]
subject, in each case, to the rights of the Holders pursuant to the terms of the
Securities and this Agreement.
(h) The Property Trustee shall be authorized to undertake any
actions set forth in ss.317(a) of the Trust Indenture Act.
(i) Subject to this Section 3.8, the Property Trustee shall
have none of the duties, liabilities, powers or the authority of the
Administrative Trustees set forth in Section 3.6.
(j) For such time as the Property Trustee is the Paying Agent,
the Property Trustee may authorize one or more Persons to act as additional
Paying Agents and to make distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all Securities. Any such
additional Paying Agent may be removed by the Property Trustee, at any time, so
long as the Property Trustee remains as Paying Agent and a successor Paying
Agent or additional Paying Agents may be (but are not required to be) appointed
at any time by the Property Trustee.
(k) The Property Trustee must exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set out
in Section 3.3.
(l) The Property Trustee shall give prompt written notice to
the Holders of the Securities of any notice received by it from the Debenture
Issuer of the Debenture Issuer's election to defer payments of interest on the
Debentures by extending the interest payment period with respect thereto.
Section 3.9 Certain Duties and Responsibilities of the Property Trustee.
(a) The Property Trustee, before the occurrence of any Event
of Default and after the curing or waiver of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Agreement and no implied covenants shall be read into this
Agreement against the Property Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Property Trustee has actual knowledge, the Property
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(b) No provision of this Agreement shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act, its bad faith or its own willful misconduct,
except that:
(i) prior to the occurrence of an Event of Default and
after the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the
Property Trustee shall be determined solely by the
express provisions of this Agreement and the Property
Trustee shall not be liable except for the
performance of such duties and obligations as are
specifically set forth in this Agreement, and no
implied covenants or obligations shall be read into
this Agreement against the Property Trustee; and
20
(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 Agreement; provided, that in the
case of any such certificates or opinions that by any
provision hereof are specifically required to be
furnished to the Property Trustee, the Property
Trustee shall be under a duty to examine the same to
determine whether or not they conform to the
requirements of this Agreement;
(ii) the Property Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Property Trustee, unless it shall be proved that the Property Trustee
was negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of 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 Agreement;
(iv) no provision of this Agreement shall require the
Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Agreement or if 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 Trust Property
and the Property Trustee Account shall be to deal with such property in
a manner that is similar to the manner in which the Property Trustee
deals with similar property for its fiduciary accounts generally,
subject to the protections and limitations on liability afforded to the
Property Trustee under this Agreement, the Delaware Statutory Trust Act
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 Trust Property or the payment of any taxes or assessments levied
thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree
in writing with the Sponsor; money held by the Property Trustee need
not be segregated from other funds held by it except in relation to the
Property Trustee Account maintained by the Property Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise required by law;
and
21
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the Sponsor
with their respective duties under this Agreement, nor shall the
Property Trustee be liable for any default or misconduct of the
Administrative Trustees or the Sponsor.
Section 3.10 Certain Rights of the Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and shall
be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties;
(ii) any direction or act of the Sponsor or the
Administrative Trustees contemplated by this Agreement shall be
sufficiently evidenced by a Direction or an Officers' Certificate;
(iii) whenever in the administration of this Agreement,
the Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder,
the Property Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of negligence or bad faith on its part,
request and conclusively rely upon an Officers' Certificate which, upon
receipt of such request, shall be promptly delivered by the Sponsor or
the Administrative Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with competent legal
counsel or other competent experts and the advice or written opinion of
such counsel and experts with respect to legal matters or advice within
the scope of such legal counsel's or 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; and the Property Trustee shall have the right at any time to
seek instructions concerning the administration of this Agreement from
any court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement at
the request or direction of any Holder, unless (A) such Holder shall
have provided to the Property Trustee security and indemnity,
reasonably satisfactory to the Property Trustee, against the reasonable
costs, expenses (including reasonable attorneys' fees and expenses and
the reasonable 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 and (B) the Property Trustee
has
22
obtained the legal opinions, if any, required by the applicable
provisions of this Agreement, provided that nothing contained in this
Section 3.10(a)(vi) shall be taken to relieve the Property Trustee,
upon the occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this Agreement;
(vii) the Property Trustee shall be under no obligation to
conduct an investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document, but the
Property Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or
by or through agents, custodians, nominees or attorneys, and the
Property Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care
by it hereunder;
(ix) any action taken by the Property Trustee or its
agents hereunder shall bind the Trust and the Holders of the
Securities, and the signature of the Property Trustee or 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 Agreement, both of which shall be
conclusively evidenced by the Property Trustee's or its agent's taking
such action;
(x) whenever in the administration of this Agreement the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Property Trustee (A) may request instructions from the
Holders (which instructions may only be given by the Holders of the
same proportion in liquidation amount of the Securities as would be
entitled to direct the Property Trustee under the terms of the
Securities in respect of such remedy, right or action), (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,
provided that the Property Trustee shall not take any action unless it
shall have obtained the legal opinions required by the applicable
provisions of this Agreement;
(xi) except as otherwise expressly provided by this
Agreement, the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Agreement; and
(xii) the Property Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith,
without negligence, and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Agreement.
23
(b) No provision of this Agreement shall be deemed to impose
any duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
Section 3.11 Delaware Trustee.
Notwithstanding any other provision of this Agreement other
than Section 5.2, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Trustees (except as required under the Delaware
Statutory Trust Act) described in this Agreement. Except as set forth in Section
5.2, the Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of ss.3807 of the Delaware Statutory Trust Act. In
the event that the Delaware Trustee shall at any time be required to take any
action or perform any duty hereunder, the Delaware Trustee shall be entitled to
the benefits of Section 3.9(b)(ii) and (viii) and Section 3.10. No implied
covenants or obligations shall be read into this Agreement against the Delaware
Trustee.
Section 3.12 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Agreement and the Securities
shall be taken as the statements of the Sponsor, and the Trustees do not assume
any responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Agreement or the Securities.
Section 3.13 Duration of Trust.
The Trust, unless dissolved pursuant to the provisions hereof,
shall [dissolve on _____________________] [have perpetual existence].
Section 3.14 Mergers.
(a) The Trust may not consolidate, amalgamate, merge or
convert with or into, or be replaced by, or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to, any
Person, except for the sole purpose of changing its domicile and as set forth in
Section 3.14(b) and (c).
(b) Subject to Section 3.14(a), the Trust may, at the request
of the Sponsor, with the consent of the Administrative Trustees or, if there are
more than two, a majority of the Administrative Trustees and without the consent
of the Holders of the Trust Preferred Securities, the Delaware Trustee or the
Property Trustee, consolidate, amalgamate, merge or convert with or into, or be
replaced by a trust organized as such under the laws of any State; provided
that:
(i) the successor entity (the "Successor Entity")
expressly assumes all of the obligations of the Trust under any
agreement to which the Trust is a party and either:
24
(A) expressly assumes all of the obligations
of the Trust under the Securities; or
(B) substitutes for the Trust Preferred
Securities other securities having substantially the
same terms as the Trust Preferred Securities (the
"Successor Trust Preferred Securities"), so long as
the Successor Trust Preferred Securities rank the
same as the Trust Preferred Securities rank with
respect to distributions of Trust Property and
payments upon liquidation, redemption, repayment and
otherwise and substitutes for the Common Securities
other securities having substantially the same terms
as the Common Securities (the "Successor Common
Securities", and together with the Successor Trust
Preferred Securities, the "Successor Securities"), so
long as the Successor Common Securities rank the same
as the Common Securities rank with respect to
distributions of Trust Property and payments upon
liquidation, redemption, repayment and otherwise;
(ii) the Successor Entity has a trustee that possesses
substantially the same powers and duties as the Property Trustee;
(iii) the Trust Preferred Securities or any Successor
Securities will be listed, quoted or included for trading, or any
Successor Securities will be listed, quoted or included for trading
upon notification of issuance if applicable, on any national securities
exchange or with another system on which the Trust Preferred Securities
are then listed, quoted or included for trading;
(iv) such merger, conversion, consolidation, amalgamation
or replacement does not cause the Trust Preferred Securities (including
any Successor Securities) to be downgraded by any nationally recognized
statistical rating organization;
(v) such merger, conversion, consolidation, amalgamation
or replacement does not adversely affect the rights, preferences and
privileges of the Holders of the Securities (including any Successor
Securities and any Successor Trust Preferred Common Securities) in any
material respect;
(vi) such Successor Entity has a purpose substantially
identical to that of the Trust;
(vii) prior to such merger, conversion, consolidation,
amalgamation or replacement, the Sponsor has received an opinion of a
nationally recognized independent counsel to the Trust experienced in
such matters to the effect that:
(A) such merger, conversion, consolidation,
amalgamation or replacement does not adversely affect
the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in
any material respect;
(B) following such merger, conversion,
consolidation, amalgamation or replacement, neither the
Trust nor the Successor Entity will be required to
register as an Investment Company; and
25
(C) following such merger, conversion,
consolidation, amalgamation or replacement, the Trust
(or the Successor Entity) will continue to be classified
as a grantor trust for United States federal income tax
purposes;
(viii) the Sponsor, directly or indirectly, owns all of
the Successor Common Securities and guarantees the obligations of such
Successor Entity under the Successor Trust Preferred Securities at
least to the extent provided by the Securities Guarantees.
(ix) the Property Trustee has received an Officers'
Certificate from the Sponsor and an opinion of counsel, each to the
effect that all conditions precedent to the transaction as set forth in
this Agreement have been satisfied.
(c) Notwithstanding Section 3.14(b), the Trust shall not,
except with the consent of Holders of 100% in liquidation amount of the
Securities, consolidate, amalgamate, merge or convert with or into, or be
replaced by any other Person or permit any other Person to consolidate,
amalgamate, or merge with or into, or replace it if such consolidation,
amalgamation, merger, conversion, or replacement would cause the Trust or
Successor Entity to be classified as other than a grantor trust for United
States federal income tax purposes.
ARTICLE IV.
SPONSOR
Section 4.1 Sponsor's Purchase of Common Securities.
On each Closing Date, the Sponsor shall purchase all of the
Common Securities issued by the Trust, in an amount at least equal to 3.0% of
the Securities of the Trust issued on such Closing Date, at the same time as the
Trust Preferred Securities are sold.
Section 4.2 Covenants of the Sponsor.
For so long as the Trust Preferred Securities remain
outstanding, the Sponsor shall:
(i) cause the Trust to remain a statutory trust and not to
voluntarily dissolve, wind up, liquidate, or terminate, except as
permitted by this Agreement;
(ii) use its commercially reasonable efforts to ensure
that the Trust will not be (A) an Investment Company or (B) classified
as other than a grantor trust for United States federal income tax
purposes.
Section 4.3 Rights and Responsibilities of the Sponsor.
In connection with the issue and sale of the Trust Preferred
Securities and so long as the Securities are outstanding, the Sponsor shall have
the right and responsibility (which shall be exclusive except as otherwise set
forth herein) to engage in the following activities:
26
(a) determine the Terms and Conditions;
(b) prepare, execute and file on behalf of the Trust with the
Commission a registration statement on Form S-3 and any prospectus or prospectus
supplement relating to such registration statement in relation to the Trust
Preferred Securities, including any amendments thereto;
(c) if deemed necessary or advisable by the Sponsor, determine
the States in which to take appropriate action to qualify or register for sale
all or part of the Trust Preferred Securities and to do any and all such acts on
behalf of the Trust, and prepare, execute and file any documents on behalf of
the Trust as the Sponsor deems necessary or advisable in order to comply with
the applicable laws of any such States;
(d) if deemed necessary or advisable by the Sponsor, 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 Trust Preferred Securities;
(e) if necessary, prepare, execute and file on behalf of the
Trust with the Commission, a registration statement on Form 8-A relating to the
registration of the Trust Preferred Securities under Section 12(b) or 12(g) of
the Exchange Act, including any amendments thereto; and
(f) negotiate the Underwriting Agreement and any other
instrument or agreement which, in the opinion of the Sponsor, the Trust should
be a party to, bound by or a beneficiary of, including any remarketing, auction
or exchange agreement.
Section 4.4 Right to Proceed.
(a) The Sponsor acknowledges the rights of Holders to
institute a Direct Action as set forth in Section 3.8(e) hereto.
Section 4.5 Expenses.
In connection with the offering, sale and issuance of the
Debentures or Other Documents to the Property Trustee and in connection with the
sale of the Securities by the Trust, the Sponsor shall:
(a) pay all costs and expenses relating to the offering, sale
and issuance of the Debentures [or Other Documents,] including commissions to
the underwriters payable pursuant to the Underwriting Agreement and compensation
of the Trustee under the Indenture in accordance with the provisions of the
Indenture;
(b) be responsible for and shall pay all debts and obligations
(other than with respect to the Securities) and all costs and expenses of the
Trust (including, but not limited to, costs and expenses relating to the
organization, maintenance and dissolution of the Trust), the offering, sale and
issuance of the Securities (including commissions to the underwriters in
connection therewith), the fees and expenses (including reasonable counsel fees
and expenses) of
27
the Property Trustee, the Delaware Trustee and the Administrative Trustees
(including any amounts payable under Article X of this Agreement), the costs and
expenses relating to the operation of the Trust, including, without limitation,
costs and expenses of accountants, attorneys, statistical or bookkeeping
services, expenses for printing and engraving and computing or accounting
equipment, Paying Agents, Registrars, transfer agents, duplicating, travel and
telephone and other telecommunications expenses and costs and expenses incurred
in connection with the acquisition, financing, and disposition of Trust assets
and the enforcement by the Property Trustee of the rights of the Holders;
(c) be primarily liable for any indemnification obligations
arising under Section 10.4 with respect to this Agreement; and
(d) pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its assets) and all liabilities,
costs and expenses with respect to such taxes of the Trust.
The Sponsor's obligations under this Section 4.5 shall be for
the benefit of, and shall be enforceable by, any Person to whom such debts,
obligations, costs, expenses and taxes are owed (a "Creditor") whether or not
such Creditor has received notice hereof. Any such Creditor may enforce the
Sponsor's obligations under this Section 4.5 directly against the Sponsor and
the Sponsor irrevocably waives any right or remedy to require that any such
Creditor take any action against the Trust or any other Person before proceeding
against the Sponsor. The Sponsor agrees to execute such additional agreements as
may be necessary or desirable in order to give full effect to the provisions of
this Section 4.5.
ARTICLE V.
TRUSTEES
Section 5.1 Number of Trustees.
The number of Trustees initially shall be [____ (_)], and:
(a) at any time before the issuance of any Securities, the
Sponsor may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of
Trustees may be increased or decreased by the Holders of a Majority in
liquidation amount of the Common Securities; provided, however, that, the number
of Trustees shall in no event be less than two (2), provided further that (1)
one Trustee shall meet the requirements of Section 5.2(a) or (b); (2) there
shall be at least one Trustee who is an employee or officer of, or is affiliated
with the Sponsor (an "Administrative Trustee"); and (3) one Trustee shall be the
Property Trustee for so long as this Agreement is required to qualify as an
indenture under the Trust Indenture Act, and such Property Trustee may also
serve as Delaware Trustee if it meets the applicable requirements.
28
Section 5.2 Delaware Trustee.
If required by the Delaware Statutory Trust Act, one Trustee
(the "Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of
Delaware; or
(b) if not a natural person, an entity which has its principal
place of business in the State of Delaware, and otherwise meets the requirements
of applicable law including ss.3807 of the Delaware Statutory Trust Act,
provided that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application.
(c) The initial Delaware Trustee shall be:
[Bank One Delaware, Inc.
Three Christina Center
201 North Walnut Street
Wilmington, Delaware 19801]
Attn: ______________________
Section 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as
Property Trustee for so long as this Agreement is required to qualify as an
Indenture under the Trust Indenture Act, which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under
the laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or Person
permitted by the Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at
least 50 million U.S. dollars ($50,000,000), and subject to supervision
or examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then for the purposes of this
Section 5.3(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published.
(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.3(a), the Property Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.6(c).
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of ss.310(b) of the Trust Indenture
Act, the Property Trustee and the Holder of the Common Securities (as if it were
the obligor referred to in ss.310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of ss.310(b) of the Trust Indenture Act.
29
(d) The Trust Preferred Securities Guarantee and the Indenture
[Describe others if applicable] shall be deemed to be specifically described in
this Agreement and the Indenture for purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
-------------------------------
-------------------------------
-------------------------------
Attention: ____________________
Section 5.4 Certain Qualifications of Administrative Trustees and
Delaware Trustee Generally.
Each Administrative Trustee and the Delaware Trustee (unless
the Property Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
Section 5.5 Administrative Trustees.
The initial Administrative Trustees shall be:
-------------------------------
-------------------------------
(a) Except as otherwise expressly set forth in this Agreement
and except if a meeting of the Administrative Trustees is called in accordance
with Section 5.9 with respect to any matter over which the Administrative
Trustees have power to act, any power of the Administrative Trustees may be
exercised by, or with the consent of, any one such Administrative Trustee.
(b) Unless otherwise determined by the Administrative Trustees
in accordance with Section 5.9, and except as otherwise required by the Delaware
Statutory Trust Act or applicable law, any Administrative Trustee is authorized
to execute on behalf of the Trust any documents which the Administrative
Trustees have the power and authority to cause the Trust to execute pursuant to
Section 3.6.
Section 5.6 Appointment; Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or
removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor;
(ii) after the issuance of any Securities, by the Holders
of a Majority in liquidation amount of the Common Securities voting as
a class at a meeting of the
30
Holders of the Common Securities unless an Event of Default shall have
occurred and be continuing, and
(iii) if an Event of Default shall have occurred and be
continuing, after the issuance of the Securities, with respect to:
(A) the Administrative Trustees, by vote or
written consent of the Holders of a Majority in
liquidation amount of the Common Securities acting
separately as a class; and
(B) the Property Trustee and the Delaware
Trustee, by vote or written consent of the Holders of
a Majority in liquidation amount of the Trust
Preferred Securities, acting separately as a class.
(b) (i) The Property Trustee shall not be removed in
accordance with Section 5.6(a) until a Successor Property Trustee possessing the
qualifications to act as Property Trustee under Sections 5.2 and 5.3 has been
appointed and has accepted such appointment by written instrument executed by
such Successor Property Trustee and delivered to the Administrative Trustees,
the Delaware Trustee (if the removed Property Trustee is not also the Delaware
Trustee) and the Sponsor.
(ii) The Delaware Trustee shall not be removed in
accordance with Section 5.6(a) until a successor possessing the
qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Administrative Trustees, the Property
Trustee (if the removed Delaware Trustee is not also the Property
Trustee) and the Sponsor.
(c) A Trustee appointed to office shall hold office until such
Trustee's successor shall have been appointed or until such Trustee's death,
bankruptcy, dissolution, termination, removal or resignation. Any Trustee may
resign from office (without need for prior or subsequent accounting) by an
instrument in writing signed by the Trustee and delivered to the other Trustees,
the Sponsor, the Trust and, after an Event of Default has occurred and is
continuing, the Holders of Trust Preferred Securities, which resignation shall
take effect upon such delivery or upon such later date as is specified therein;
provided, however, that:
(i) no such resignation of the Property Trustee shall be
effective:
(A) until a Successor Property Trustee has
been appointed and has accepted such appointment by
instrument executed by such Successor Property
Trustee and delivered to the Trust, the Sponsor, the
Delaware Trustee, the resigning Property Trustee and,
after an Event of Default has occurred and is
continuing, the Holders of Trust Preferred
Securities; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof
distributed to the Holders of the Securities and the
Trust is terminated pursuant to the terms of this
Agreement and the Securities; and
31
(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 instrument executed by such Successor
Delaware Trustee and delivered to the Trust, the Sponsor, the Property
Trustee, the resigning Delaware Trustee and, after an Event of Default
has occurred and is continuing, the Holders of Trust Preferred
Securities.
(d) The Holders of the Common Securities or, if an Event of
Default has occurred and is continuing after the issuance of any Securities, the
Holders of Trust Preferred Securities shall use all reasonable efforts to
promptly appoint a Successor Delaware Trustee or Successor Property Trustee, as
the case may be, if the Property Trustee or the Delaware Trustee delivers an
instrument of resignation in accordance with this Section 5.6.
(e) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.6 within 60 days after delivery to the other Trustees, the Sponsor,
the Trust and, after an Event of Default has occurred and is continuing, the
Holders of the Trust Preferred Securities of an instrument of resignation, the
resigning 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. 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) At the time of the resignation or removal of the Property
Trustee or the Delaware Trustee, the Sponsor shall pay to such Trustee any
amounts that may be owed to such Trustee pursuant to Section 10.4.
Section 5.7 Vacancies Among Trustees.
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 5.1, or if the number of
Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the Administrative
Trustees or, if there are more than two Administrative Trustees, a majority of
the Administrative Trustees shall be conclusive evidence of the existence of
such vacancy. The vacancy shall be filled with a Trustee appointed in accordance
with Section 5.6.
Section 5.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to dissolve, terminate or annul the Trust. Whenever a
vacancy among the Administrative Trustees shall occur, until such vacancy is
filled by the appointment of an Administrative Trustee in accordance with
Section 5.6, the Administrative Trustees in office, regardless of their number,
shall have all the powers granted to the Administrative Trustees and shall
discharge all the duties imposed upon the Administrative Trustees by this
Agreement.
32
Section 5.9 Meetings.
If there is more than one Administrative Trustee, meetings of
the Administrative Trustees shall be held from time to time upon the call of any
Administrative Trustee. Regular meetings of the Administrative Trustees may be
held at a time and place fixed by resolution of the Administrative Trustees.
Notice of any in-person meetings of the Administrative Trustees shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 48 hours before such meeting. Notice of
any telephonic meetings of the Administrative Trustees or any committee thereof
shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of an Administrative Trustee at a meeting shall constitute a waiver
of notice of such meeting except where an Administrative Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Agreement, any action of the Administrative Trustees
may be taken at (i) a meeting by vote of a majority of the Administrative
Trustees present (whether in person or by telephone) and eligible to vote with
respect to such matter, provided that a Quorum is present, or (ii) without a
meeting and without prior notice by the unanimous written consent of the
Administrative Trustees. In the event there is only one Administrative Trustee,
any and all action of such Administrative Trustee shall be evidenced by a
written consent of such Administrative Trustee.
Section 5.10 Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purpose of executing any documents
contemplated in Section 3.6.
(b) The Administrative Trustees shall have power to delegate
from time to time to such of their number or to officers of the Trust the doing
of such things and the execution of such instruments either in the name of the
Trust or the names of the Administrative Trustees or otherwise as the
Administrative Trustees may deem expedient, to the extent such delegation is not
prohibited by applicable law or contrary to the provisions of the Trust, as set
forth herein.
Section 5.11 Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Property Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Property Trustee or the Delaware Trustee, as the case
may be, shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of the Property Trustee or the Delaware Trustee, as
the case may be, shall be the successor of the Property Trustee or the Delaware
Trustee, as the case may be, hereunder, provided such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto; provided,
however that such successor shall promptly notify the Sponsor (except
33
that a Successor Delaware Trustee shall file an appropriate amendment to the
Certificate of Trust of the Trust, if required by the Delaware Statutory Trust
Act).
ARTICLE VI.
DISTRIBUTIONS
Section 6.1 Distributions.
If and to the extent that the Trust receives income on any
Debenture [or pursuant to any Other Document] whether in cash, securities or
other property as proceeds from the redemption, repayment, conversion, exchange,
maturity or other disposition of any Debenture [or pursuant to any Other
Document] (including any interest or premium on or the principal of the
Debentures, any securities or other property received in exchange or upon
conversion of the Debentures, [or any cash, securities or other property
received under any Other Document]) (collectively, the "Payment Amount"), then,
unless otherwise specified in this Agreement, the Property Trustee shall
distribute the Payment Amount to the Holders of the Securities in accordance
with the terms of the Securities they hold as set forth in this Agreement,
including the Terms and Conditions. The Property Trustee shall make the
distributions on the Trust Preferred Securities and the Common Securities in
accordance with the relative rights, preferences and privileges that apply to
each of those classes of Securities as set forth in this Agreement.
ARTICLE VII.
ISSUANCE OF SECURITIES
Section 7.1 General Provisions Regarding Securities
(a) The Administrative Trustees shall, on behalf of the Trust,
issue one class of preferred securities representing undivided beneficial
interests in the assets of the Trust having such terms as are set forth in the
Terms and Conditions (the "Trust Preferred Securities") and one class of common
securities representing undivided beneficial interests in the assets of the
Trust having such terms as are set forth in the Terms and Conditions (the
"Common Securities"). The Trust shall issue no securities or other interests in
the assets of the Trust other than the Trust Preferred Securities and the Common
Securities.
(b) The terms of the Securities shall be set forth in the
Terms and Conditions. The Terms and Conditions shall be executed by each of the
Administrative Trustees. Such Terms and Conditions are incorporated herein by
reference and shall set forth the following to the extent not provided by, or in
lieu or modification of, the other provisions of this Agreement:
(1) the designation of the Trust Preferred Securities and the
designation of the Common Securities;
(2) any limit upon the number and/or aggregate liquidation amount of
the Trust Preferred Securities or the Common Securities to be
executed and delivered under this Agreement (except for
Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities
of such class pursuant to Section 9.2, 9.7 or 9.8, upon repayment
or redemption in part of any Security or
34
upon surrender in part of any Security for conversion or exchange
into other securities pursuant to its terms);
(3) the amounts payable out of the assets of the Trust to, and any
other rights of the Holders upon, the liquidation of the Trust
and any provisions for the dissolution and liquidation of the
Trust, including the obligation, if any, of the Sponsor, the
Trust or any other party to liquidate the Trust and any terms and
conditions of such liquidation;
(4) the date or dates, or the method or methods, if any, by which
such date or dates shall be determined, on which the liquidation
amount and premium, if any, of the Securities are distributable;
(5) the rate or rates at which income on the Trust Property shall be
distributed to Holders, or the method or methods, if any, by
which such rate or rates are to be determined, the date or dates,
if any, from which such income shall accrue or the method or
methods, if any, by which such date or dates are to be
determined, the date or dates, if any, on which such income shall
be payable, including any deferral provisions, and the record
date or dates, if any, for the income payable on the Securities
on any such income payment date, the notice, if any, to Holders
regarding the determination of income on a floating rate Security
and the manner of giving such notice, and the basis upon which
interest shall be calculated if other than that of a 360-day year
of twelve 30-day months;
(6) whether the Distributions on the Securities will be cumulative
and, if so, the dates from which and upon which distributions
will accumulate and be payable;
(7) whether, in addition to or other than the Borough of Manhattan,
The City of New York, the place or places where the distributions
on the Securities may be made, the Securities may be surrendered
for registration of transfer, exchange, redemption, repayment,
conversion or upon maturity, and notices or demands to or upon
the Trust in respect of the Securities and this Agreement may be
served;
(8) whether the Trust is obligated or entitled to redeem or purchase
any of such Securities at its option, pursuant to any sinking
fund or analogous provision or at the option of any Holder
thereof or otherwise, and, if so, the date or dates on which, the
period or periods within which, the price or prices at which and
the other terms and conditions upon which such Securities shall
be redeemed or purchased, in whole or in part, pursuant to such
obligation, and any provisions for the remarketing, auction or
other secondary sales of Securities so redeemed or purchased;
(9) the denominations in which the Securities shall be issuable if
other than denominations of $1,000 and any integral multiple;
(10) whether the Securities will be convertible into and/or
exchangeable for other securities or property or both, and if so,
the terms and conditions upon which the Securities will be so
convertible or exchangeable;
35
(11) any voting rights granted to the Holders of the Trust Preferred
Securities or the Common Securities in addition to or in lieu of
the voting rights set forth elsewhere in this Agreement;
(12) if other than U.S. dollars, the currency in which cash
distributions on the Securities shall be payable;
(13) if cash distributions with respect to the Securities are to be
payable, at the election of the Trust or a Holder thereof or
otherwise, in a currency other than that in which the Securities
are stated to be payable, the date or dates on which, the period
or periods within which, and the other terms and conditions upon
which, such election may be made, and the time and manner of
determining the exchange rate between the currency in which the
Securities are stated to be payable and the currency in which the
Securities or any of them are to be paid pursuant to such
election;
(14) whether any distributions may be determined with reference to an
index, formula or other method or methods (which index, formula
or method or methods may be based, without limitation, on one or
more currencies, commodities, equity indices or other indices),
and, if so, the terms and conditions upon which and the manner in
which such amounts shall be determined and paid or payable;
(15) the title and amount of the Debentures and any Other Documents to
be acquired with the proceeds of the sale of the Securities;
(16) the ranking of the Trust Preferred Securities and the Common
Securities; and
(17) any other rights, preferences, restrictions, limitations or
conditions relative to the Trust Preferred Securities or the
Common Securities permitted by Delaware law and any deletions
from or modifications or additions to this Agreement, including
any Events of Default or covenants of any of the parties hereto,
in respect of the Securities, provided no covenant in this
Agreement may be modified without the consent of the party giving
such covenant.
(c) The Certificates shall be in the forms prepared by the
Sponsor and signed on behalf of the Trust by at least one Administrative
Trustee. Such signature shall be the manual or facsimile signature of any
present or any future Administrative Trustee. In case any Administrative Trustee
who shall have signed any of the Securities shall cease to be such
Administrative Trustee before the Certificates so signed shall be delivered by
the Trust, such Certificates nevertheless may be delivered as though the person
who signed such Certificates had not ceased to be such Administrative Trustee;
and any Certificate may be signed on behalf of the Trust by any persons who, at
the actual date of execution of such Certificate, shall be an Administrative
Trustee of the Trust, although at the date of the execution and delivery of the
Agreement any such person was not such an Administrative Trustee. Certificates
shall be printed, lithographed or engraved or may be produced in any other
manner as is reasonably acceptable to the Administrative Trustee, as evidenced
by such individual's execution thereof, and may have such letters, numbers or
other marks of identification or designation and such legends or endorsements as
the Administrative Trustee that signs such Certificates may deem
36
appropriate, or as may be required to comply with any law or with any rule or
regulation of any stock exchange on which Securities may be listed, or to
conform to usage.
A Trust Preferred Security Certificate shall not be valid
until authenticated by the manual signature of an authorized officer of the
Property Trustee. Such signature shall be conclusive evidence that a Trust
Preferred Security Certificate has been authenticated under this Agreement.
Each Trust Preferred Security Certificate shall be dated the
date of its authentication by the Property Trustee. Each Common Security
Certificate shall be dated the date it is executed by an Administrative Trustee.
Upon a written order of the Trust signed by one Administrative
Trustee, the Property Trustee shall authenticate Trust Preferred Security
Certificates, provided the aggregate liquidation amount or number of the Trust
Preferred Securities shall not exceed the aggregate liquidation amount or
number, as the case may be, of Trust Preferred Securities designated in the
Terms and Conditions, as such liquidation amount or number, as the case may be,
may be reduced by redemptions, repayments, exchanges, conversions or liquidating
distributions.
The Property Trustee may appoint an authenticating agent
acceptable to the Administrative Trustees to authenticate Trust Preferred
Security Certificates. An authenticating agent may authenticate Trust Preferred
Security Certificates whenever the Property Trustee may do so. Each reference in
this Agreement to authentication by the Property Trustee includes authentication
by such agent. An authenticating agent has the same rights as the Property
Trustee to deal with the Sponsor or an Affiliate of the Sponsor.
(d) 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.
(e) Upon issuance of the Securities as provided in this
Agreement, the Securities so issued shall be deemed to be validly issued, fully
paid and, subject to Section 10.1(b), non-assessable.
(f) Every Person, by virtue of having become a Holder or a
Trust Preferred Security Beneficial Owner in accordance with the terms of this
Agreement, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Agreement.
The Holders, as beneficial owners of the Trust, will 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 7.2 Paying Agent and Registrar.
In the event that the Trust Preferred Securities are not in
book-entry only form:
(a) The Trust shall maintain in the Borough of Manhattan, The
City of New York, an office or agency where the Trust Preferred Securities may
be presented for payment ("Paying Agent"), and any such Paying Agent shall
comply with Section 317(b) of the Trust Indenture Act. The Administrative
Trustees on behalf of the Trust may appoint the Paying Agent and may appoint one
or more additional paying agents in such other locations as it shall determine.
The term "Paying Agent" includes any additional paying agent. The Administrative
Trustees on behalf of the Trust may change any Paying Agent without prior notice
to any Holder.
37
The Administrative Trustees on behalf of the Trust shall notify the Property
Trustee of the name and address of any Paying Agent not a party to this
Agreement. If the Administrative Trustees on behalf of the Trust fail to appoint
or maintain another entity as Paying Agent, the Property Trustee shall act as
such. The Administrative Trustees on behalf of the Trust or any of its
Affiliates (including the Sponsor) may act as Paying Agent. The Property Trustee
at its Corporate Trust Office shall initially act as Paying Agent for the Trust
Preferred Securities and the Common Securities.
(b) The Trust shall maintain in the Borough of Manhattan, The
City of New York, an office or agency where Trust Preferred Securities may be
presented for registration of transfer or exchange ("Registrar"). The Registrar
shall keep a register of the Trust Preferred Securities and of their transfer or
exchange. The Administrative Trustees on behalf of the Trust may appoint the
Registrar and may appoint one or more co-registrars in such other locations as
it shall determine. The term "Registrar" includes any such additional registrar.
The Administrative Trustees on behalf of the Trust may change any Registrar or
co-registrar without prior notice to any Holder. The Administrative Trustees on
behalf of the Trust shall notify the Property Trustee of the name and address of
any Agent not a party to this Agreement. If the Administrative Trustees on
behalf of the Trust fail to appoint or maintain another entity as Registrar, the
Property Trustee shall act as such. The Trust or any of its Affiliates
(including the Sponsor) may act as Registrar. The Administrative Trustees on
behalf of the Trust shall act as Registrar for the Common Securities.
(c) Notwithstanding Sections 3.6(b)(vi) and 3.6(l), the Trust
initially appoints the Property Trustee as Registrar for the Trust Preferred
Securities and authorizes it to execute and deliver letters, documents and
instruments with DTC and other Clearing Agencies relating to the Trust Preferred
Securities.
ARTICLE VIII.
TERMINATION OF TRUST
Section 8.1 Termination of Trust.
(a) The Trust shall dissolve and its affairs shall be wound up
upon the first of the following to occur:
(i) (other than in connection with a merger, consolidation
or similar transaction not prohibited by this Agreement or any Trust
Property) upon 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;
(ii) upon the bankruptcy of the Sponsor or the Trust;
(iii) upon the entry of a decree of judicial dissolution
of the Trust;
(iv) when all the Securities shall have been called for
redemption, repayment, conversion or exchange and the amounts necessary
for redemption,
38
repayment, conversion or exchange thereof shall have been distributed
to the Holders in accordance with the terms of this Agreement and the
Securities;
(v) upon the liquidation of the Trust and the distribution
to the Holders of all amounts they are required to receive in
accordance with the terms of this Agreement and the Securities,
provided that the Property Trustee has received written notice from the
Sponsor directing the Property Trustee to dissolve the Trust (which
direction is optional and, except as otherwise expressly provided
herein, within the discretion of Sponsor), and provided, further, that
such dissolution is conditioned on the Administrative Trustees' receipt
of an opinion of an independent tax counsel experienced in such matters
to the effect that the Holders of the Securities will not recognize any
gain or loss for United States Federal income tax purposes as a result
of the dissolution of the Trust and the distribution of the Debentures;
(vi) the expiration of the term of the Trust provided in
Section 3.13 of this Agreement; and
(vii) any other event specified in the Terms and
Conditions.
(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 of the
Trust, a certificate of cancellation of the Certificate of Trust of the Trust
shall be filed with the Secretary of State of the State of Delaware in
accordance with the Delaware Statutory Trust Act.
(c) The provisions of Section 4.4 and Article X shall survive
the termination of the Trust.
ARTICLE IX.
TRANSFER OF INTERESTS
Section 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part,
in accordance with the terms and conditions set forth in this Agreement and in
the terms of the Securities. To the fullest extent permitted by law, any
transfer or purported transfer of any Security not made in accordance with this
Agreement shall be null and void.
(b) Subject to this Article IX and the Terms and Conditions,
Trust Preferred Securities shall be freely transferable.
(c) To the fullest extent permitted by applicable law, subject
to this Article IX, the Sponsor and any Related Party may only transfer Common
Securities to the Sponsor or a Related Party of the Sponsor; provided that, any
such transfer is subject to the condition precedent that the transferor obtain
the written opinion of nationally recognized independent counsel experienced in
such matters that such transfer would not cause more than an insubstantial risk
that:
(i) the Trust would not be classified for United States
federal income tax purposes as a grantor trust; and
39
(ii) the Trust would be an Investment Company or the
transferee would become an Investment Company.
Section 9.2 Transfer or Exchange of Certificates.
The Registrar shall provide for the registration of
Certificates and of transfers or exchanges of Certificates, which shall be
effected without charge but only upon payment (with such indemnity as the
Administrative Trustees may require) in respect of any tax or other government
charges that may be imposed in relation to it. The Trust will not be required to
register or cause to be registered the transfer of its trust preferred
securities after they have been converted, exchanged, repaid, redeemed or called
for redemption. Upon surrender for registration of transfer or exchange of any
Certificate at the Corporate Trust Office of the Property Trustee, the
applicable Registrar shall cause one or more new Certificates to be issued in
the name of the designated transferee or transferees or the party requesting the
exchange, as the case may be. Every Certificate surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer or
exchange in form satisfactory to the applicable Registrar and duly executed by
the Holder or such Holder's attorney duly authorized in writing. Each
Certificate surrendered for registration of transfer or exchange shall be
canceled by the applicable Registrar. A transferee of a Certificate and the
recipient of one or more Certificates issued in exchange for cancelled
Certificates shall be entitled to the rights and subject to the obligations of a
Holder hereunder upon the receipt by such transferee or recipient of a
Certificate or Certificates duly executed by an Administrative Trustee and, in
the case of a Trust Preferred Security Certificate, authenticated by the
Property Trustee. By acceptance of a Certificate, each transferee shall be
deemed to have agreed to be bound by this Agreement.
Section 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any
Certificate shall be registered on the books and records of the Trust as the
sole holder of such Certificate and of the Securities represented by such
Certificate for purposes of receiving Distributions and for all other purposes
whatsoever and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such Certificate or in the Securities represented
by such Certificate on the part of any Person, whether or not the Trust shall
have actual or other notice thereof.
Section 9.4 Book Entry Interests.
Unless otherwise specified in the Terms and Conditions, the
Trust Preferred Securities Certificates, on original issuance, shall be issued
in the form of one or more, fully registered, global Trust Preferred Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Trust. Each such Global Certificate
shall initially be registered on the books and records of the Trust in the name
of Cede & Co., the nominee of DTC, and no Trust Preferred Security Beneficial
Owner will receive a definitive Trust Preferred Security Certificate
representing such Trust Preferred Security Beneficial Owner's interests in any
Global Certificate, except as provided in Section 9.7. Except for the definitive
Trust Preferred Security Certificates issued to the Trust Preferred Security
Beneficial Owners pursuant to Section 9.7 or in accordance with the Terms and
Conditions:
40
(a) the provisions of this Section 9.4 shall be in full force
and effect;
(b) the Trust, the Trustees and any Agent shall be entitled to
deal with the Clearing Agency for all purposes of this Agreement (including the
payment of distributions on any Global Certificate and receiving approvals,
votes or consents hereunder) as the Holder of the Trust Preferred Securities and
the sole holder of any Global Certificate and shall have no obligation to the
Trust Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4
conflict with any other provisions of this Agreement other than the Terms and
Conditions, the provisions of this Section 9.4 shall control; and
(d) the rights of the Trust Preferred Security Beneficial
Owners shall be exercised only through the Clearing Agency and shall be limited
to those established by law and agreements between the Trust Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants to receive and transmit payments and other distributions on the
Global Certificates to such Clearing Agency Participants. DTC will make book
entry transfers among the Clearing Agency Participants; provided, that, solely
for the purposes of determining whether the Holders of the requisite amount of
Trust Preferred Securities have voted on any matter provided for in this
Agreement, the Trustees may conclusively rely on, and shall be protected in
relying on, any written instrument (including a proxy) delivered to the Trustees
by the Clearing Agency setting forth the Trust Preferred Security Beneficial
Owners' votes or assigning the right to vote on any matter to any other Persons
either in whole or in part.
Section 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Trust
Preferred Security Holders is required under this Agreement, unless and until
definitive fully registered Trust Preferred Security Certificates shall have
been issued to the Trust Preferred Security Beneficial Owners pursuant to
Section 9.7 or otherwise, the Administrative Trustees shall give all such
notices and communications specified herein to be given to the Trust Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Trust Preferred Security Beneficial Owners.
Section 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Trust Preferred Securities, the
Administrative Trustees may, in their sole discretion, appoint a successor
Clearing Agency with respect to such Trust Preferred Securities.
Section 9.7 Definitive Trust Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Trust Preferred Securities and a
successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
41
(b) the Administrative Trustees elect after consultation with
the Sponsor to terminate the book-entry system through the Clearing Agency with
respect to the Trust Preferred Securities, then:
(1) definitive fully registered Trust Preferred Security
Certificates shall be prepared and executed by the Administrative
Trustees and authenticated by the Property Trustee on behalf of the
Trust with respect to such Trust Preferred Securities; and
(2) upon surrender of any Global Certificate by the
Clearing Agency, accompanied by registration instructions, the
Administrative Trustees shall cause definitive fully registered Trust
Preferred Securities Certificates to be executed, and the Property
Trustee shall cause such Trust Preferred Securities Certificates to be
authenticated and delivered to Trust Preferred Security Beneficial
Owners in accordance with the instructions of the Clearing Agency.
Neither the Trustees nor the Trust shall be liable for any delay in
delivery of such instructions and each of them may conclusively rely on
and shall be protected in relying on, said instructions of the Clearing
Agency. The definitive fully registered Trust Preferred Security
Certificates shall be printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the
Administrative Trustees, as evidenced by their execution thereof, and
may have such letters, numbers or other marks of identification or
designation and such legends or endorsements as the Administrative
Trustees and the Property Trustee may deem appropriate, or as may be
required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange
on which Trust Preferred Securities may be listed, or to conform to
usage.
Section 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificate shall be surrendered to the
Administrative Trustees, or if the Administrative Trustees shall receive
evidence to their satisfaction of the destruction, loss or theft of any
Certificate; and (b) there shall be delivered to the Administrative Trustees and
the Property Trustee such security or indemnity as may be required by them to
keep each of the Trustees and the Trust harmless, then, in the absence of notice
that such Certificate shall have been acquired by a protected purchaser, any
Administrative Trustee on behalf of the Trust shall execute and deliver, and, in
the case of a Trust Preferred Securities Certificate, the Property Trustee shall
authenticate, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 9.8, the
Administrative Trustees and the Property Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith.
42
Any duplicate Certificate issued pursuant to this Section shall
constitute conclusive evidence of an ownership interest in the relevant
Securities, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
ARTICLE X.
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS
Section 10.1 Liability.
(a) Except as expressly set forth in this Agreement, the
Debentures, any other instrument or agreement, the Securities Guarantees and the
terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders of the
Securities, which shall be made solely from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust or otherwise.
(b) The Sponsor, as the Debenture Issuer, shall be liable for
all of the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to ss.3803(a) of the Delaware Statutory Trust
Act, the Holders of the Trust Preferred Securities shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware.
Section 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Agreement or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's gross negligence (or, in
the case of the Property Trustee, negligence), bad faith or willful misconduct
with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the
43
existence and amount of assets from which Distributions to Holders of Securities
might properly be paid.
Section 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and liabilities relating thereto
to the Trust or to any other Covered Person, an Indemnified Person acting under
this Agreement shall not be liable to the Trust or to any other Covered Person
for its good faith reliance on the provisions of this Agreement. The provisions
of this Agreement, to the extent that they restrict the duties and liabilities
of an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Property Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between any Covered Persons and any Indemnified Person; or
(ii) whenever this Agreement or any other instrument or
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 Agreement or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Agreement an Indemnified Person is
permitted or required to make a decision:
(i) in its "sole discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to consider such
interests and factors as it desires, including its own interests, and
shall have no duty or obligation to give any consideration to any
interest of or factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such express standard
and shall not be subject to any other or different standard imposed by
this Agreement or by applicable law.
44
Section 10.4 Indemnification.
(a) (i) The Sponsor shall indemnify, to the fullest extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of the fact
that he is or was a Company Indemnified Person against expenses (including
reasonable attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Trust, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the Company
Indemnified Person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Trust, and, with
respect to any criminal action or proceeding, had reasonable cause to believe
that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the fullest extent
permitted by law, any Company Indemnified Person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Trust to procure a
judgment in its favor by reason of the fact that he is or was a Company
Indemnified Person against expenses (including reasonable attorneys'
fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the
best interests of the Trust and except that no such indemnification
shall be made in respect of any claim, issue or matter as to which such
Company Indemnified Person shall have been adjudged to be liable to the
Trust unless and only to the extent that the Court of Chancery of
Delaware or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which such Court
of Chancery or such other court shall deem proper.
(iii) Any indemnification under paragraphs (i) and (ii) of
this Section 10.4(a) (unless ordered by a court) shall be made by the
Sponsor only as authorized in the specific case upon a determination
that indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set
forth in paragraphs (i) and (ii). Such determination shall be made (1)
by the Administrative Trustees by a majority vote of a Quorum
consisting of such Administrative Trustees who were not parties to such
action, suit or proceeding, (2) if such a Quorum is not obtainable, or,
even if obtainable, if a Quorum of disinterested Administrative
Trustees so directs, by independent legal counsel in a written opinion,
or (3) by the Common Security Holder of the Trust.
(iv) Expenses (including reasonable attorneys' fees)
incurred by a Company Indemnified Person in defending a civil,
criminal, administrative or
45
investigative action, suit or proceeding referred to in paragraphs (i)
and (ii) of this Section 10.4(a) shall be paid by the Sponsor in
advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such Company
Indemnified Person to repay such amount if it shall ultimately be
determined that such person is not entitled to be indemnified by the
Sponsor as authorized in this Section 10.4(a). Notwithstanding the
foregoing, no advance shall be made by the Sponsor if a determination
is reasonably and promptly made (i) by the Administrative Trustees by a
majority vote of a Quorum of disinterested Administrative Trustees,
(ii) if such a Quorum is not obtainable, or, even if obtainable, if a
Quorum of disinterested Administrative Trustees so directs, by
independent legal counsel in a written opinion or (iii) the Common
Security Holder of the Trust, that, based upon the facts known to the
Administrative Trustees, independent legal counsel or Common Security
Holder at the time such determination is made, such person acted in bad
faith or in a manner that such person did not believe to be in or not
opposed to the best interests of the Trust, or, with respect to any
criminal proceeding, that such Company Indemnified Person believed or
had reasonable cause to believe his conduct was unlawful. In no event
shall any advance be made in instances where the Administrative
Trustees, independent legal counsel or Common Security Holder
reasonably determine that such person deliberately breached such
person's duty to the Trust or its Common or Trust Preferred Security
Holders.
(v) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other paragraphs of this
Section 10.4(a) shall not be deemed exclusive of any other rights to
which those seeking indemnification and advancement of expenses may be
entitled under any agreement, vote of shareholders or disinterested
directors of the Sponsor or Trust Preferred Security Holders of the
Trust or otherwise, both as to action in his official capacity and as
to action in another capacity while holding such office. All rights to
indemnification under this Section 10.4(a) shall be deemed to be
provided by a contract between the Sponsor and each Company Indemnified
Person who serves in such capacity at any time while this Section
10.4(a) is in effect. Any repeal or modification of this Section
10.4(a) shall not affect any rights or obligations then existing.
(vi) The Sponsor or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or
not the Sponsor would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a).
(vii) For purposes of this Section 10.4(a), references to
"the Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any person
who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 10.4(a) with respect to the resulting or
surviving entity as such person would have with respect to such
constituent entity if its separate existence had continued.
46
(viii) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 10.4(a) shall, unless
otherwise provided when authorized or ratified, continue as to a person
who has ceased to be a Company Indemnified Person and shall inure to
the benefit of the successors, heirs, executors and administrators of
such a person.
(b) To the fullest extent permitted by law, the Sponsor agrees
to indemnify each Fiduciary Indemnified Person for, and to hold each Fiduciary
Indemnified Person harmless against, any loss, liability or expense to the
extent incurred without gross negligence (or in the case of the Property
Trustee, pursuant to Section 3.9, negligence), bad faith or willful misconduct
on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against or investigating any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The provisions of this
Section 10.4(b) shall survive the satisfaction and discharge of this Agreement
and any resignation or removal of the Property Trustee or the Delaware Trustee,
as the case may be.
Section 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee (subject to Section 5.3(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 business of the Trust, and the
Trust and the Holders of Securities shall have no rights by virtue of this
Agreement in and to such independent ventures or the income or profits derived
therefrom, and the pursuit of any such venture, even if competitive with the
business of the Trust, shall not be deemed wrongful or improper. No Covered
Person, the Sponsor, the Delaware Trustee or the Property Trustee shall be
obligated to present any particular investment or other opportunity to the Trust
even if such opportunity is of a character that, if presented to the Trust,
could be taken by the Trust, and any Covered Person, the Sponsor, the Delaware
Trustee and the Property Trustee shall have the right to take for its own
account (individually or as a partner or fiduciary) or to recommend to others
any such particular investment or other opportunity. Any Covered Person, the
Delaware Trustee and the Property Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the Sponsor,
or may act as depositary for, trustee or agent for, or act on any committee or
body of holders of, securities or other obligations of the Sponsor or its
Affiliates.
Section 10.6 Trustees' Fees and Expenses.
Each Trustee shall receive as compensation for its services
hereunder such fees and expenses as have been separately agreed upon before the
date hereof between the Sponsor and such Trustee, and each Trustee shall be
entitled to be reimbursed by the Sponsor for other reasonable expenses
hereunder, including the reasonable compensation, expenses and disbursements of
such agents, representatives, experts and counsel as such Trustee may employ in
connection with the exercise and performance of its rights and duties hereunder.
47
ARTICLE XI.
ACCOUNTING
Section 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
Section 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Administrative Trustees on behalf of the Trust shall keep, or cause to be kept,
full books of account, records and supporting documents, all of 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.
(b) The Administrative Trustees, on behalf of the Trust, shall
cause to be duly prepared and delivered to each of the Holders of Securities,
any annual United States federal income tax information statement required by
the Code and the Treasury Regulations, containing such information with regard
to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Administrative Trustees on behalf of the
Trust shall endeavor to deliver all such statements within 30 days after the end
of each Fiscal Year of the Trust.
(c) The Administrative Trustees on behalf of the Trust shall
cause to be duly prepared and filed with the appropriate taxing authority an
annual United States federal income tax return, on a Form 1041 or such other
form required by United States federal income tax law, and any other annual
income tax returns required to be filed by the Trust with any state or local
taxing authority.
Section 11.3 Banking.
The Administrative Trustees, on behalf of the Trust, shall
maintain one or more bank accounts in the name and for the sole benefit of the
Trust; provided, however, that all payments for the benefit of holders of
Securities of funds in respect of Trust Property shall be made directly to the
Property Trustee Account and no other funds of the Trust shall be deposited in
the Property Trustee Account. The sole signatories for such accounts shall be
designated by the Administrative Trustees; provided, however, that the Property
Trustee shall designate the signatories for the Property Trustee Account.
48
Section 11.4 Withholding.
The Administrative Trustees on behalf of the Trust shall
comply with all withholding requirements under United States federal, state and
local law. The Trust shall request, and the Holders shall provide to the Trust,
such forms or certificates as are necessary to establish an exemption from
withholding with respect to each Holder, and any representations and forms as
shall reasonably be requested by the Trust to assist it in determining the
extent of, and in fulfilling, its withholding obligations. The Administrative
Trustees on behalf of the Trust shall file required forms with applicable
jurisdictions and, unless an exemption from withholding is properly established
by a Holder, shall remit amounts withheld with respect to the Holder to
applicable jurisdictions. To the extent that the Trust is required to withhold
and pay over any amounts to any authority with respect to distributions or
allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed over withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual distributions made, the Trust may reduce subsequent distributions by
the amount of such withholding.
ARTICLE XII.
AMENDMENTS AND MEETINGS
Section 12.1 Amendments.
Except as otherwise provided in this Agreement or by any
applicable terms of the Securities:
(a) this Agreement may only be amended by a written instrument
approved and executed by the Sponsor and the Administrative Trustees (or, if
there are more than two Administrative Trustees, a majority of the
Administrative Trustees) and:
(i) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, also by the Property
Trustee; and
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, also by the Delaware
Trustee;
(b) no amendment shall be made:
(i) unless, in the case of any proposed amendment, the
Property Trustee shall have first received an Officers' Certificate
from each of the Trust and the Sponsor that such amendment is permitted
by, and conforms to, the terms of this Agreement (including the terms
of the Securities);
(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or immunities of the
Property Trustee, the Property Trustee shall have first received:
49
(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
Agreement (including the terms of the Securities);
and
(B) an opinion of qualified independent
counsel that such amendment is permitted by, and
conforms to, the terms of this Agreement (including
the terms of the Securities); and
(iii) to the extent the result of such amendment would be
to:
(A) cause the Trust to fail to continue to
be classified for purposes of United States federal
income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the
powers of the 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) after the Trust has issued any Securities that remain
outstanding, without the consent of the Holders of a Majority in liquidation
amount of each class of Securities affected, this Agreement may not be amended
for any reason in a manner that would adversely affect the rights, privileges or
preferences of such class of Securities, provided that, except as may be
provided in the Terms and Conditions, without the consent of each Holder of
Securities affected thereby, this Agreement may not be amended to:
(i) change the Distribution rate, or manner of calculation
of the Distribution rate, amount, timing or currency or otherwise
adversely affect the method of any required payment;
(ii) change the purpose of the Trust;
(iii) authorize the issuance of any additional beneficial
interests in the Trust;
(iv) change the conversion, exchange, redemption or
repayment provisions, if any;
(v) change the conditions precedent for the Sponsor to
elect to dissolve the Trust and distribute the Debentures held by the
Trust to the Holders of the Trust Securities, if applicable;
(vi) change the liquidation, distribution or other
provisions relating to the distribution of amounts payable upon the
dissolution and liquidation of the Trust;
(vii) affect the limited liability of any Holder of the
Trust Securities; or
50
(viii) restrict the right of a Holder of the Trust
Securities to institute suit for the enforcement of any required
payment on or, if applicable, after the due date therefor or for the
conversion or exchange of the Securities in accordance with their
terms.
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the
Sponsor;
(f) the rights of the holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove,
Trustees shall not be amended without the consent of the Holders of a Majority
in liquidation amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Agreement may be
amended by the Trustees and the Sponsor without the consent of the Holders of
the any Securities that are outstanding to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Agreement
that may be defective or inconsistent with any other provision of this
Agreement;
(iii) add to the covenants, restrictions or obligations of
the Sponsor;
(iv) conform to any change in the Investment Company Act
or the Trust Indenture Act or the rules and regulations promulgated
thereunder or any written change in interpretation or application of
such act or such rules or regulations by any legislative body, court,
government agency or regulatory authority;
(v) cause the Trust to continue to be classified for
United States federal income tax purposes as a grantor trust;
provided, however, that, such action shall not adversely affect in any material
respect the interests of the Holders.
Any amendments to this Agreement adopted pursuant to Section 12.1(g)
shall become effective when notice thereof is given to the Holders.
Section 12.2 Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Securities may be
called at any time by the Administrative Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which Holders of
Securities are entitled to act under the terms of this Agreement, the terms of
the Securities or the rules of any stock exchange on which the Trust Preferred
Securities are listed or admitted for trading. The Administrative Trustees shall
call a meeting of the Holders if directed to do so by the Holders of at least
10% in liquidation amount of Securities. Such direction shall be given by
delivering to the Administrative Trustees one or
51
more calls in a writing stating that the signing Holders of Securities wish to
call a meeting and indicating the general or specific purpose for which the
meeting is to be called. Any Holders of Securities calling a meeting shall
specify in writing the Certificates held by the Holders of Securities exercising
the right to call a meeting and only those Securities specified shall be counted
for purposes of determining whether the required percentage set forth in the
second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of
the Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the
Holders of Securities having a right to vote thereat at least 7 days
and not more than 60 days before the date of such meeting. Whenever a
vote, consent or approval of the Holders of Securities is permitted or
required under this Agreement, the terms of the Securities or the rules
of any stock exchange on which the Trust Preferred Securities are
listed or admitted for trading, such vote, consent or approval may be
given at a meeting of the Holders of Securities. Any action that may be
taken at a meeting of the Holders of Securities may be taken without a
meeting and without prior notice if a consent in writing setting forth
the action so taken is signed by the Holders of Securities owning not
less than the minimum amount of Securities in liquidation amount that
would be necessary to authorize or take such action at a meeting at
which all Holders of Securities having a right to vote thereon were
present and voting. Prompt notice of the taking of action without a
meeting shall be given to the Holders of Securities entitled to vote
who have not consented in writing. The Administrative Trustees may
specify that any written ballot submitted to the Holder of Securities
for the purpose of taking any action without a meeting shall be
returned to the Trust within the time specified by the Administrative
Trustees;
(ii) each Holder of a Security may authorize any Person to
act for it by proxy on all matters in which a Holder of Securities is
entitled to participate, including waiving notice of any meeting, or
voting or participating at a meeting. No proxy shall be valid after the
expiration of 11 months from the date thereof unless otherwise provided
in the proxy. Every proxy shall be revocable at the pleasure of the
Holder of Securities executing it. Except as otherwise provided herein,
all matters relating to the giving, voting or validity of proxies shall
be governed by the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations thereunder, as if the
Trust were a Delaware corporation and the Holders of the Securities
were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities shall
be conducted by the Administrative Trustees or by such other Person
that the Administrative Trustees may designate; and
(iv) unless the Delaware Statutory Trust Act, this
Agreement, the terms of the Securities, the Trust Indenture Act or the
listing rules of any stock exchange on which the Trust Preferred
Securities are then listed or trading otherwise provides, the
Administrative Trustees, in their sole discretion, shall establish all
other provisions
52
relating to meetings of Holders of Securities, including notice of the
time, place or purpose of any meeting at which any matter is to be
voted on by any Holders of Securities, waiver of any such notice,
action by consent without a meeting, the establishment of a record
date, quorum requirements, voting in person or by proxy or any other
matter with respect to the exercise of any such right to vote.
ARTICLE XIII.
REPRESENTATIONS OF PROPERTY TRUSTEE AND
DELAWARE TRUSTEE
Section 13.1 Representations and Warranties of Property Trustee.
The Trustee that acts as initial Property Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Agreement, and
each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee, that:
(a) the Property Trustee is a banking corporation, a national
banking association or a bank with trust powers, duly organized, validly
existing and in good standing under the laws of the United States of America or
any State of the United States, with trust power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of, this
Agreement;
(b) the Property Trustee satisfies the requirements set forth
in Section 5.3(a);
(c) the execution, delivery and performance by the Property
Trustee of this Agreement has been duly authorized by all necessary corporate
action on the part of the Property Trustee. The Agreement 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 Agreement
by the Property Trustee does not conflict with or constitute a breach of the
Articles of Organization or By-laws 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 Agreement.
Section 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Agreement, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee, that:
53
(a) the Delaware Trustee is a banking corporation or national
banking association, duly organized, validly existing and in good standing under
the laws of the State of Delaware or the United States, as the case may be, with
power and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Agreement;
(b) the execution, delivery and performance by the Delaware
Trustee of this Agreement has been duly authorized by all necessary corporate
action on the part of the Delaware Trustee. This Agreement has been duly
executed and delivered by the Delaware Trustee, and it constitutes a legal,
valid and binding obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(c) no consent, approval or authorization of, or registration
with or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee of this Agreement;
and
(d) the execution, delivery and performance of the Agreement
by the Delaware Trustee does not conflict with or constitute a breach of the
Articles of Organization or By-laws of the Delaware Trustee; and
(e) the Delaware Trustee is a natural person who is a resident
of the State of Delaware or, if not a natural person, an entity which has its
principal place of business in the State of Delaware.
ARTICLE XIV.
MISCELLANEOUS
Section 14.1 Notices.
All notices provided for in this Agreement shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows:
(a) if given to the Administrative Trustees or the Trust, in
care of the Administrative Trustees at the Trust's mailing address set forth
below (or such other address as the Trust may give notice of to the Holders of
the Securities and the other Trustees):
The Detroit Edison Energy Company
2000 2nd Avenue
Detroit, Michigan 48226-1279
Attention: ________________
(b) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as Delaware Trustee may give notice of to
the Holders of the Securities):
54
[Bank One Delaware, Inc.
Three Christina Center
201 North Walnut Street
Wilmington, Delaware 19801]
Attn: ____________________
(c) if given to the Property Trustee, at its Corporate Trust
Office to the attention of Capital Markets Fiduciary Services (or such other
address as the Property Trustee may give notice of to the Holders of the
Securities):
[Bank One Trust Company, National Association
100 East Broad Street
Columbus, Ohio 43271]
Attention: _______________
(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust and the other
Trustees):
c/o The Detroit Edison Company
2000 2nd Avenue
Detroit, Michigan 48226-1279
Attention: ___________________
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
Section 14.2 Governing Law.
This Agreement and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
Section 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Agreement shall be interpreted to further this intention of
the parties.
55
Section 14.4 Headings.
Headings contained in this Agreement are inserted for
convenience of reference only and do not affect the interpretation of this
Agreement or any provision hereof.
Section 14.5 Successors and Assigns.
Whenever in this Agreement any of the parties hereto is named
or referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Agreement by the Sponsor and
the Trustees shall bind and inure to the benefit of their respective successors
and assigns, whether so expressed.
Section 14.6 Partial Enforceability.
If any provision of this Agreement, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Agreement, or the application of such provision to persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
Section 14.7 Entire Agreement.
This Agreement constitutes the entire agreement among the
parties. It supersedes any prior agreement or understandings among them, and it
may not be modified or amended in any manner other than as set forth herein.
Section 14.8 Remedies.
The failure of any party to seek redress for violation of, or
to insist upon the strict performance of, any provision of this Agreement shall
not prevent a subsequent act, which would have originally constituted a
violation, from having the effect of an original violation. The rights and
remedies provided by this Agreement are cumulative and the use of any one right
or remedy by any party shall not preclude or waive its right to use any or all
other remedies. Said rights and remedies are given in addition to any other
rights the parties may have by law, statute, ordinance or otherwise.
Section 14.9 Counterparts.
This Agreement may contain more than one counterpart of the
signature page and this Agreement may be executed by affixing the signature of
each of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
56
IN WITNESS WHEREOF, the undersigned have caused these presents
to be executed as of the day and year first above written.
_____________________________________________
__________________, as Administrative Trustee
of the Trust
_____________________________________________
__________________, as Administrative Trustee
of the Trust
[Bank One Delaware, Inc.]
as Delaware Trustee
By: _________________________________________
Name:
Title:
[Bank One Trust Company, National Association]
as Property Trustee
By: _________________________________________
Name:
Title:
THE DETROIT EDISON COMPANY
as Sponsor
By: _________________________________________
Name:
Title:
57
EXHIBIT A
TERMS AND CONDITIONS OF
___% TRUST PREFERRED SECURITIES
___% COMMON SECURITIES
[NOTE: This is a form of Terms and Conditions. The actual Terms and Conditions
included in this Agreement may vary substantially from this form, as
contemplated by Section 7.1(b) of the form of Amended and Restated Trust
Agreement.]
Pursuant to Section 7.1(a) of the Amended and Restated Trust Agreement,
dated as of _________________, of Detroit Edison Trust [I/II] (as amended from
time to time, the "Agreement"), the undersigned, being all the Administrative
Trustees of Detroit Edison Trust [I/II], hereby establish the designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Trust Preferred Securities and the Common Securities:
(1) The Terms and Conditions form a part of the Agreement, except as
otherwise provided herein or unless the context otherwise requires, and all
of the provisions of the other parts of the Agreement, including the
definitions of capitalized terms, apply to these Terms and Conditions.
Furthermore, unless the context otherwise requires, in these Terms and
Conditions, references to paragraphs mean paragraphs of these Terms and
Conditions and:
"Additional Interest" has the meaning set forth in paragraph 3(d).
["Applicable Ownership Interest" has the meaning set forth in paragraph
5(c).
["Applicable Principal Amount" has the meaning set forth in paragraph
5(c).]
["Authorized Newspaper" for purposes of the Reset Spread Announcement
Date shall be ______________.]
["Capital Stock" means with respect to any Person organized as a
corporation, any and all shares, interests, rights to purchase, warrants,
options, participations or other equivalents of or interest in (however
designated) corporate stock, and (ii) with respect to any Person that is not
organized as a corporation, the partnership, membership or other equity
interests or participations in such Person.]
"Change in 1940 Act Law" has the meaning set forth in paragraph 5(b).
["Collateral Agent" means ___________.]
"Compound Interest" has the meaning set forth in paragraph 3(a).
"Coupon Rate" has the meaning set forth in paragraph 3(a).
A-1
["Debenture Repayment Price" means, with respect to any Debentures put
to the Sponsor on _______________, an amount per Debenture equal to $____, plus
accrued and unpaid interest.]
"Debentures" means _______________.
"Distribution Payment Date" has the meaning set forth in paragraph
3(b).
"Extension Period" has the meaning set forth in paragraph 3(b).
["Failed Remarketing" has the meaning set forth in the Purchase
Contract Agreement.]
"Investment Company Event" has the meaning set forth in paragraph 5(b).
"Investment Company Event Opinion" has the meaning set forth in
paragraph 5(b).
"Liquidation Distribution" has the meaning set forth in paragraph 4.
"90 Day Period" has the meaning set forth as paragraph 5(b).
"Ministerial Action" has the meaning set forth in paragraph 5(b).
["Pledge Agreement" means the Pledge Agreement dated as of
_______________ among the Sponsor, _________________________, as collateral
agent (the "Collateral Agent"), and _________________________, as purchase
contract agent (the "Purchase Contract Agent").]
["Prepayment Price" has the meaning set forth in paragraph 5(a).]
["Primary Treasury Dealer" has the meaning set forth in paragraph ___.]
["Purchase Contract Agreement" means the Purchase Contract Agreement
dated as of __________________ between ______________________, as Purchase
Contract Agent, and the Sponsor.]
["Purchase Contract Settlement Date" means ___________________.]
["Put Option" has the meaning set forth in paragraph 7(a).]
["Put Option Exercise Date" has the meaning set forth in paragraph
7(a).]
["Put Option Repayment Price" has the meaning set forth in paragraph
7(a).]
["Quotation Agent" has the meaning set forth in paragraph 5(c).]
["Redemption Amount" has the meaning set forth in paragraph 5(c).]
A-2
"Redemption/Distribution Notice" has the meaning set forth in paragraph
6(a).
["Redemption Price" has the meaning set forth in paragraph 5(c).]
["Remarketing Agreement" has the meaning set forth in the Purchase
Contract Agreement.]
["Reset Agent" means a nationally recognized investment banking firm
chosen by the Sponsor to determine the Reset Rate. It is currently anticipated
that _________________ will act in such capacity.]
["Reset Announcement Date" means the tenth (10) Business Day
immediately preceding the Purchase Contract Settlement Date.]
["Reset Rate" means the distribution rate per annum (to be determined
by the Reset Agent), equal to the sum of (X) the Reset Spread and (Y) the rate
of interest on the [Two-Year Benchmark Treasury] in effect on the third Business
Day immediately preceding the Purchase Contract Settlement Date, that the Trust
Preferred Securities should bear in order for the Trust Preferred Securities to
have an approximate market value of _______% of their aggregate liquidation
amount on the third Business Day immediately preceding the Purchase Contract
Settlement Date; provided, that the Sponsor may limit such Reset Spread to be no
higher than _____ basis points (___%).]
["Reset Spread" means a spread amount to be determined by the Reset
Agent on the tenth (10) Business Day immediately preceding the Purchase Contract
Settlement Date.]
["Rights Plan" means a plan of the Debenture Issuer providing for the
issuance by the Debenture Issuer to all holders of its Common Stock of rights
entitling the holders thereof to subscribe for or purchase shares of Common
Stock or any class or series of preferred stock, which rights (i) are deemed to
be transferred with such shares of Common Stock, (ii) are not exercisable and
(iii) are also issued in respect of future issuances of Common Stock, in each
case until the occurrence of a specified event or events.]
"Stated Maturity" means, with respect to the Debentures, _________.
"Special Event" means an Investment Company Event or a Tax Event, as
the case may be.
"Tax Event" has the meaning set forth in paragraph 5(c).
"Tax Event Redemption" has the meaning set forth in paragraph 5(c).
"Tax Event Redemption Date" has the meaning set forth in paragraph
5(c).
["Termination Event" has the meaning set forth in Section 1.1 of the
Purchase Contract Agreement.]
["Treasury Portfolio" has the meaning set forth in paragraph 5(c).]
A-3
["Treasury Portfolio Purchase Price" has the meaning set forth in
paragraph 5(c).]
["Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).]
["Treasury Securities" has the meaning set forth in Section 1.1 of the
Purchase Contract Agreement.]
["Two-Year Benchmark Treasury" means 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 Trust Preferred
Securities, as agreed upon by the Sponsor and the Reset Agent. The rate for the
Two-Year Benchmark Treasury will be 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 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 Reset Agent
(after consultation with the Sponsor) no longer an appropriate system from which
to obtain such rate, such other nationally recognized quotation system as, in
the opinion of the Reset Agent (after consultation with the Sponsor) is
appropriate. If such rate is not so displayed, the rate for the Two-Year
Benchmark Treasury shall be, as calculated by the Reset Agent, the yield to
maturity for the Two-Year Benchmark Treasury, 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 Reset Agent (after
consultation with the Sponsor) (which may include the Reset Agent or an
Affiliate thereof).]
(2) Designation and Number.
(a) Trust Preferred Securities. Preferred securities of the Trust, with
an aggregate liquidation amount with respect to the assets of the Trust of up to
_______________ Dollars ($________________) and a liquidation amount with
respect to the assets of the Trust of $___ per security, are hereby designated
for the purposes of identification only as "___% Trust Preferred Securities"
(the "Trust Preferred Securities"). The Trust Preferred Security Certificates
evidencing the Trust Preferred Securities shall be substantially in the form of
Exhibit A-1 to the Agreement, with such changes and additions thereto or
deletions therefrom as may be required by applicable law or the rules of any
stock exchange on which the Trust Preferred Securities are listed or to conform
to ordinary usage, custom or practice.
(b) Common Securities. Common Securities of the Trust, with an
aggregate liquidation amount with respect to the assets of the Trust of up to
______________________ ___________________ Dollars ($_______________) and a
liquidation amount with respect to the assets of the Trust of $___ per security,
are hereby designated for the purposes of identification only as "___% Common
Securities" (the "Common Securities"). The Common Security Certificates
evidencing the Common Securities shall be substantially in the form of
A-4
Exhibit A-2 to the Agreement, with such changes and additions thereto or
deletions therefrom as may be required by applicable law or to conform to
ordinary usage, custom or practice.
(c) The maximum liquidation amount of Trust Preferred Securities and
Common Securities referred to above excludes Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of
other Securities pursuant to Section 9.2, 9.7 or 9.8, upon repayment,
redemption, exchange or conversion into other securities in accordance with its
terms.
(d) The Preferred Securities and the Common Securities represent
undivided beneficial interests in the assets of the Trust.
(e) In connection with the purchase of the Securities, the Sponsor will
deposit in the Trust, and the Trust will purchase, respectively, as trust
assets, Debentures of the Sponsor having an aggregate principal amount equal to
$[ ], and bearing interest at an annual rate equal to the annual Distribution
rate on the Preferred Securities and Common Securities and having payment and
redemption provisions which correspond to the payment and redemption provisions
of the Preferred Securities and Common Securities.
(3) Distributions.
(a) Cash distributions will be payable on each Security at the rate per
annum of __% (the "Coupon Rate") of the stated liquidation amount of $___ per
Security [until __________________________, and at the Reset Rate thereafter,]
such rate[s] being the rate[s] of interest payable on the Debentures.
Distributions in arrears for more than one quarter will bear interest thereon
compounded quarterly at the rate of __% [until ______________________, and at
the Reset Rate thereafter] ("Compound Interest") (to the extent permitted by
applicable law). The term "Distributions" as used herein includes such cash
distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds available therefor. The amount of Distributions payable for
any period will be computed for any full quarterly Distribution period on the
basis of a 360-day year consisting of twelve 30-day months, and for any period
shorter than a full quarterly Distribution period for which Distributions are
computed, Distributions will be computed on the basis of the actual number of
days elapsed per 30-day month.
(b) Distributions on the Securities will be cumulative, will accrue
from ____________________, and will be payable quarterly in arrears, on
_______________, ____________________, ________________ and ______________ of
each year, commencing on _____________________, when, as and if available for
payment, except as otherwise described below (a "Distribution Payment Date"). So
long as the Debenture Issuer shall not be in default in the payment of interest
on the Debentures, the Debenture Issuer has the right under the Indenture to
defer payments of interest on the Debentures by extending the interest payment
period from time to time on the Debentures for a period not exceeding 20
consecutive quarters (each an "Extension Period"), during which Extension Period
no interest shall be due and payable on the Debentures, provided that no
Extension Period shall last beyond the Stated Maturity of the Debentures. As a
consequence of such deferral, Distributions will also be
A-5
deferred. Despite such deferral, quarterly Distributions will continue to accrue
with interest thereon (to the extent permitted by applicable law) at the Coupon
Rate compounded quarterly to the extent permitted by law during any such
Extension Period. Prior to the termination of any such Extension Period, the
Debenture Issuer may further extend such Extension Period; provided that such
Extension Period, together with all such previous and further extensions
thereof, may not exceed 20 consecutive quarters or extend beyond the Stated
Maturity of the Debentures. Any interest accrued on the Debentures during an
Extension Period shall be paid Pro Rata to holders of Debentures on the first
payment date following the Extension Period and the Payment Amount shall be paid
Pro Rata to the Holders on the first Distribution Payment Date following the
Extension Period. Upon the termination of any Extension Period and the payment
of all amounts then due, the Debenture Issuer may commence a new Extension
Period, subject to the above requirements. If (i) the Debenture Issuer shall
exercise its right to defer payment of interest as provided above and the
Extension Period is continuing, or (ii) there shall have occurred any Event of
Default, as defined in the Indenture, or (iii) there shall have occurred any
Event of Default, as defined in the Trust Preferred Securities Guarantee, then
(a) the Debenture Issuer shall not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Debenture Issuer's Capital Stock or (ii) make any
payment of principal of or interest on or repay, repurchase or redeem any debt
securities of the Debenture Issuer that rank equally with or junior to the
Debentures or make any guarantee payments with respect to any guarantee by the
Debenture Issuer of the debt securities of any Subsidiary of the Debenture
Issuer that by its terms ranks equally with or junior to the Debentures (other
than (a) dividends or distributions in Common Stock, (b) any declaration of a
dividend in connection with the implementation of a Rights Plan, the issuance of
any Capital Stock of the Debenture Issuer under any Rights Plan or the
redemption or repurchase of any rights distributed pursuant to a Rights Plan,
(c) payments under any Guarantee relating to the Trust Preferred Securities, and
(d) purchases of Common Stock related to the issuance of Common Stock or rights
under the Debenture Issuer's dividend reinvestment plan, or under any of the
Debenture Issuer's benefit plans for its directors, officers, employees,
consultants or advisors).
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust at the close of
business on the Business Day immediately preceding each of the relevant payment
dates on the Securities. [Subject to any applicable laws and regulations and the
provisions of the Agreement, each such payment in respect of the Trust Preferred
Securities will be made as described under the heading "______________
______________________" in the Prospectus Supplement dated ____________________
to the Prospectus dated ______________________ (collectively, the "Prospectus")
of the Trust relating to the Registration Statement on Form S-3 (file no.
____________________________________) of the Sponsor and the Trust.] The
relevant record dates for the Common Securities shall be the same record date as
for the Trust Preferred Securities. If the Trust Preferred Securities shall not
continue to remain in book-entry only form or are not in book-entry only form at
issuance, the relevant record dates for the Trust Preferred Securities shall
conform to the rules of any securities exchange on which the securities are
listed and, if none, as shall be selected by the Administrative Trustees, which
dates shall be at least more than one, but less than 60 Business Days before the
relevant payment dates, which payment dates correspond to the interest payment
dates on the Debentures. Distributions payable on any Securities that are not
punctually paid on any Distribution Payment Date, as a result of the
A-6
Debenture Issuer having failed to make a payment under the Debentures, will
cease to be payable to the Person in whose name such Securities are registered
on the relevant record date, and such defaulted Distribution will instead be
payable to the Person in whose name such Securities are registered on the
special record date or other specified date determined in accordance with the
Indenture; provided, however, that Distributions shall not be considered payable
on any Distribution Payment Date falling within an Extension Period unless the
Debenture Issuer has elected to make a full or partial payment of interest
accrued on the Debentures on such Distribution Payment Date. If any date on
which Distributions are payable on the Securities is not a Business Day, then
payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date. [So long as the Holder of any Trust Preferred Securities is the
Collateral Agent, the payment of Distributions on such Trust Preferred
Securities held by the Collateral Agent will be made at such place and to such
account as may be designated by the Collateral Agent.] Distributions on the
Securities will be paid by the Trust.
(d) If at any time while the Property Trustee is the Holder of any
Securities, the Trust or the Property Trustee is required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States, or any other taxing authority,
then, in any such case, the Debenture Issuer will pay as additional interest
("Additional Interest") on the Securities held by the Property Trustee, such
amounts as shall be required so that the net amounts received and retained by
the Trust and the Property Trustee after paying any such taxes, duties,
assessments or other governmental charges will be equal to the amounts the Trust
and the Property Trustee would have received had no such taxes, duties,
assessments or other governmental charges been imposed.
(e) [The Coupon Rate on the Securities (as well as the interest rate on
the Debentures) will be reset on the third Business Day immediately preceding
the Purchase Contract Settlement Date to the Reset Rate (which Reset Rate will
be in effect on and after the Purchase Contract Settlement Date). On the Reset
Announcement Date, the Reset Spread and the Two-Year Benchmark Treasury to be
used to determine the Reset Rate will be announced by the Sponsor. On the
Business Day immediately following the Reset Announcement Date, the Holders of
Securities will be notified of such Reset Spread and Two-Year Benchmark Treasury
by the Sponsor. Such notice shall be sufficiently given to Holders of Securities
if published in an Authorized Newspaper.]
(f) [Not later than 7 calendar days nor more than 15 calendar days
prior to the Reset Announcement Date, the Sponsor will request DTC (as defined
herein) or its nominee (or any successor Clearing Agency or its nominee) by
first-class mail, postage prepaid, to notify the Trust Preferred Security
Beneficial Owner or Clearing Agency Participants holding Trust Preferred
Securities of such Reset Announcement Date and the procedures to be followed by
such Holders who intend to settle their obligation under the Purchase Contract
with separate cash.]
A-7
(g) In the event that there is any money or other property held by or
for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
(4) Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary liquidation, dissolution
winding-up or termination of the Trust (each, a "Liquidation"), the Holders of
the Securities on the date of the dissolution will be entitled to receive out of
the assets of the Trust, after satisfaction (or reasonable provision for
satisfaction) of liabilities to creditors, distributions in an amount equal to
the aggregate stated liquidation amount of such Securities, plus accrued and
unpaid Distributions on such Securities to the date of payment (such amount
being "Liquidation Distribution"), unless, in connection with such Liquidation,
Debentures in an aggregate stated principal amount equal to the aggregate stated
liquidation amount of such Securities, with an interest rate equal to the Coupon
Rate of, and bearing accrued and unpaid interest in an amount equal to the
accrued and unpaid Distributions on, such Securities, shall be distributed on a
Pro Rata basis to the Holders in exchange for such Securities..
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Securities shall be paid on a Pro Rata basis.
(5) Redemption and Distribution.
(a) Upon the repayment of the Debentures, at maturity, the proceeds
from such repayment shall, after satisfaction of liabilities to creditors, be
simultaneously applied to redeem Securities having an aggregate liquidation
amount equal to the aggregate principal amount of the Debentures so repaid at a
redemption price of $____ per Security plus an amount equal to accrued and
unpaid Distributions thereon at the date of the redemption, payable in cash.
[The Debentures are prepayable prior to the Stated Maturity at the
option of the Debenture Issuer (i) in whole or in part, from time to time, on or
after [ ] or (ii) at any time prior to [ ], in whole but not in part, upon the
occurrence and continuation of a Special Event, in either case at a prepayment
price (the "Prepayment Price") equal to 100% of the principal amount thereof,
plus accrued and unpaid interest thereon (including Additional Interest and
Compound Interest, if any) to the date of prepayment.]
The Debentures are prepayable as set forth in this Section 5. Upon the
repayment of the Debentures in whole or in part, whether at maturity or upon
redemption, the proceeds from such repayment or payment shall be simultaneously
applied to redeem Securities having an aggregate liquidation amount equal to the
aggregate principal amount of the Debenture so repaid or redeemed at the
Prepayment Price. If fewer than all the outstanding Securities are to be so
redeemed, the Securities will be redeemed Pro Rata and the Trust Preferred
Securities to be redeemed will be as described in Section 6.
(b) If an Investment Company Event (as defined herein) occurs, the
Administrative Trustees shall dissolve the Trust and, after satisfaction of
liabilities to creditors,
A-8
cause Debentures held by the Property Trustee, having an aggregate principal
amount equal to the aggregate stated liquidation amount of, with an interest
rate equal to the rate of ___%, [if on or prior to ____________________, and the
Reset Rate thereafter,] and accrued and unpaid interest equal to accrued and
unpaid Distributions on, and having the same record date for payment as the
Securities, to be distributed to the Holders of the Securities in liquidation of
such Holders' interests in the Trust on a Pro Rata basis, within 90 days
following the occurrence of such Investment Company Event (the "90 Day Period");
provided, however, that, if at the time there is available to the Trust the
opportunity to eliminate, within the 90 Day Period, the Investment Company Event
by taking some ministerial action, such as filing a form or making an election,
or pursuing some other similar reasonable measure that will have no adverse
effect on the Trust, the Debenture Issuer, the Sponsor or the Holders of the
Securities and will involve no material cost ("Ministerial Action"), the
Administrative Trustees will pursue such Ministerial Action in lieu of
dissolution.
"Investment Company Event" means that the Trust shall have received an
opinion of independent counsel experienced in practice under the Investment
Company Act (an "Investment Company Event Opinion") to the effect that, as a
result of the occurrence of a change in law or regulation or a written change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change in 1940 Act Law"),
which Change in 1940 Act Law becomes effective on or after the date of the
Prospectus, there is a more than an insubstantial risk that the Trust is or will
be considered an Investment Company which is required to be registered under the
Investment Company Act.
(c) If a Tax Event occurs, the Debentures are redeemable at the option
of the Debenture Issuer, in whole but not in part, on not less than 30 days nor
more than 60 days notice ("Tax Event Redemption"). If the Debenture Issuer
redeems the Debentures upon the occurrence and continuance of a Tax Event, the
proceeds from such redemption shall simultaneously be applied by the Trust to
redeem the Securities having an aggregate stated liquidation amount equal to the
aggregate principal amount of the Debentures so redeemed at a redemption price
(the "Redemption Price"), per Security, equal to the [Redemption Amount] plus
any accumulated and unpaid distributions thereon to the date of such redemption.
[If, following the occurrence of a Tax Event, the Debenture Issuer exercises its
option to redeem the Debentures, the Debenture Issuer shall appoint the
Quotation Agent to assemble the Treasury Portfolio in consultation with the
Company.] To the extent the Redemption Price is received by the Property
Trustee, the Property Trustee will distribute, to the record Holder of the
Securities the Redemption Price payable in liquidation of such Holder's
interests in the Trust.
"Tax Event" means the receipt by the Administrative Trustees of an
opinion of a nationally recognized independent tax counsel experienced in such
matters to the effect that, as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein affecting taxation, (b) any amendment to or change
in an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority or (c) any
interpretation or pronouncement that provides for a position with respect to
such laws or regulations that differs from the generally accepted position on
the date the Securities are issued, which amendment or change is effective
A-9
or which interpretation or pronouncement is announced on or after the date of
issuance of the Securities under the Agreement, there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days of the date
of such opinion, subject to United States federal income tax with respect to the
income received or accrued on the Debentures, (ii) interest payable by the
Debenture Issuer on the Debentures is not, or within 90 days of the date thereof
would not be, deductible, in whole or in part, by the Debenture Issuer for
United States federal income tax purposes or (iii) the Trust is, or within 90
days of the date thereof would be, subject to more than a de minimis amount of
other taxes, duties or other governmental charges.
["Treasury Portfolio" means, with respect to the Applicable Principal
Amount of Debentures (a) if the Tax Event Redemption Date occurs prior to
______________ a portfolio of zero-coupon U.S. Treasury Securities consisting of
(i) interest or principal strips of U.S. Treasury Securities which mature on or
prior to ______________, in an aggregate amount equal to the Applicable
Principal Amount and (ii) with respect to each scheduled interest payment date
on the Debentures that occurs after the Tax Event Redemption Date, interest or
principal strips of U.S. Treasury Securities which mature on or prior to that
date in an aggregate amount equal to the aggregate interest payment that would
be due on the Applicable Principal Amount of the Debentures on such date, and
(b) if the Tax Event Redemption Date occurs after ____________ _____, a
portfolio of zero-coupon U.S. Treasury Securities consisting of (i) principal or
interest strips of U.S. Treasury Securities which mature on or prior to
_______________ in an aggregate amount equal to the Applicable Principal Amount
and (ii) with respect to each scheduled interest payment date on the Debentures
that occurs after the Tax Event Redemption Date, interest or principal strips of
such U.S. Treasury Securities which mature on or prior to such date in an
aggregate amount equal to the aggregate interest payment that would be due on
the Applicable Principal Amount of the Debentures on such date.]
["Applicable Ownership Interest" means, with respect to [title of
securities] and the U.S. Treasury Securities in the Treasury Portfolio, (A) a
1/___, or ___%, undivided beneficial ownership interest in a U.S. Treasury
Security in the amount of $1,000 included in such Treasury Portfolio payable on
or prior to _______________ and (B) for each scheduled interest payment date on
the Debentures that occurs after the Tax Event Redemption Date, a ____%
undivided beneficial ownership interest in a $1,000 face amount of such U.S.
Treasury Security which is a principal or interest strip maturing on such date.]
["Applicable Principal Amount" means either (i) if the Tax Event
Redemption Date occurs prior to _______________, the aggregate principal amount
of the Debentures corresponding to the aggregate stated liquidation amount of
the Trust Preferred Securities on the Tax Event Redemption Date or (ii) if the
Tax Event Redemption occurs on or after _______________ the aggregate principal
amount of the Debentures corresponding to the aggregate stated liquidation
amount of the Trust Preferred Securities outstanding on such Tax Event
Redemption Date.]
["Redemption Amount" means for each Debenture, the product of (i) the
principal amount of such Debenture and (ii) a fraction whose numerator is the
Treasury Portfolio Purchase Price and whose denominator is the Applicable
Principal Amount.]
A-10
["Treasury Portfolio Purchase Price" means the lowest aggregate price
quoted by a primary U.S. government securities dealer in New York City (a
"Primary Treasury Dealer") to the Quotation Agent on the third Business Day
immediately preceding the Tax Event Redemption Date for the purchase of the
Treasury Portfolio for settlement on the Tax Event Redemption Date.]
["Quotation Agent" means (i) _______________________________________
and its respective successors, provided, however, that if the foregoing shall
cease to be a Primary Treasury Dealer, the Sponsor shall substitute therefor
another Primary Treasury Dealer and (ii) any other Primary Treasury Dealer
selected by the Sponsor.]
On and from the date fixed by the Administrative Trustees for a Tax
Event Redemption or any distribution of Debentures and dissolution of the Trust:
(i) the Securities shall no longer be deemed to be outstanding, (ii) DTC or its
nominee (or any successor Clearing Agency or its nominee) or the record Holder
of the Trust Preferred Securities, will receive a registered global certificate
or certificates representing the Debentures to be delivered upon such
distribution and (iii) any certificates representing Securities, except for
certificates representing Trust Preferred Securities held by DTC or its nominee
(or any successor Clearing Agency or its nominee), will be deemed to represent
beneficial interests in the Debentures having an aggregate principal amount
equal to the aggregate stated liquidation amount of $___, with an interest rate
of __% [if on or prior to _____________________, and at the Reset Rate
thereafter,] and accrued and unpaid interest equal to accrued and unpaid
Distributions on such Securities until such certificates are presented to the
Debenture Issuer or its agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding Securities
unless all accrued and unpaid Distributions have been paid on all Securities for
all quarterly Distribution periods terminating on or before the date of
redemption.
(e) If the Debentures are distributed to the Holders and the Preferred
Securities are then listed on an exchange, the Debenture Issuer will use its
best efforts to cause the Debentures to be listed on the NYSE or on such other
exchange as the Preferred Securities are then listed.
On the date fixed for any distribution of Debentures upon dissolution
of the Trust, (i) the Preferred Securities will not longer be deemed to be
outstanding, (ii) the Clearing Agency or its nominee, as the record holder of
the Preferred Securities, will receive a registered global certificate or
certificates representing the Debentures to be delivered upon such distribution,
and (iii) any certificates representing Preferred Securities not held by the
Clearing Agency or its nominee will be deemed to represent Debentures having an
aggregate principal amount equal to the aggregate stated liquidation amount of,
with an interest rate identical to the distribution rate of, and accrued and
unpaid interest equal to accrued and unpaid distributions on, such Preferred
Securities until such certificates are presented to the Debenture Issuer or its
agent for transfer or reissuance.
A-11
(6) Redemption or Distribution Procedures.
(a) Notice of any redemption (other than in connection with the
maturity of the Debentures) of, or notice of distribution of Debentures in
exchange for, the Securities (a "Redemption/Distribution Notice") will be given
by the Trust by mail to each Holder of Securities to be redeemed or exchanged
not fewer than 30 nor more than 60 days before the date fixed for redemption or
exchange thereof which, in the case of a redemption, will be the Tax Event
Redemption Date. For purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given pursuant to this Section 6(a),
a Redemption/Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, to Holders of
Securities. Each Redemption/Distribution Notice shall be addressed to the
Holders of Securities at the address of each such Holder appearing in the books
and records of the Trust. No defect in the Redemption/Distribution Notice or in
the mailing of either thereof with respect to any Holder shall affect the
validity of the redemption or exchange proceedings with respect to any other
Holder.
(b) In the event that fewer than all the outstanding Securities are to
be redeemed, the Securities to be redeemed shall be redeemed Pro Rata from each
Holder, it being understood that, in respect of Trust Preferred Securities
registered in the name of and held of record by the Clearing Agency (as defined
in the Agreement) or its nominee, the distribution of the proceeds of such
redemption will be made to each Participant (as defined in the Agreement) (or
Person) on whose behalf such nominee holds such securities) in accordance with
the procedures applied by such agency or nominee.
(c) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are redeemed as set out in this Section 6 (such notice will be
irrevocable), then (A) while the Trust Preferred Securities are in book-entry
only form, with respect to the Trust Preferred Securities, by 12:00 noon, New
York City time, on the redemption date, provided that the Debenture Issuer has
paid the Property Trustee a sufficient amount of cash in connection with the
related redemption or maturity of the Debentures by 10:00 a.m. New York City
time on such Redemption Date, the Property Trustee will deposit irrevocably with
DTC or its nominee (or any successor Clearing Agency or its nominee), [the
Purchase Contract Agent or the Collateral Agent, as applicable,] funds
sufficient to pay the applicable Redemption Price with respect to the Trust
Preferred Securities and will give DTC, [the Purchase Contract Agent or the
Collateral Agent, as applicable,] irrevocable instructions and authority to pay
the Redemption Price to the Holders of the Trust Preferred Securities so called
for redemption, and (B) with respect to Trust Preferred Securities issued in
definitive form and Common Securities, provided that the Debenture Issuer has
paid the Property Trustee a sufficient amount of cash in connection with the
related redemption or maturity of the Debentures, the Property Trustee will pay
the relevant Redemption Price to the Holders of such Securities by check mailed
to the address of the relevant Holder appearing on the books and records of the
Trust. [Notwithstanding the foregoing, so long as the Holder of any Trust
Preferred Securities is the Collateral Agent or the Purchase Contract Agent, the
payment of the Redemption Price in respect of such Trust 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 Tax Event Redemption Date by
check or wire transfer in immediately available funds at such place and to such
account as may be
A-12
designated by the Collateral Agent or the Purchase Contract Agent.] If a
Redemption/Distribution Notice shall have been given and funds deposited as
required, if applicable, then immediately prior to the close of business on the
date of such deposit, or on the redemption date, as applicable, distributions
will cease to accumulate on the Securities so redeemed and all rights of Holders
of such Securities so called for redemption will cease, except the right of the
Holders of such Securities to receive the Redemption Price, but without interest
on such Redemption Price. Neither the Administrative Trustees nor the Trust
shall be required to register or cause to be registered the transfer of any
Securities that have been so called for redemption. If any date fixed for
redemption of Securities is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding day that is a
Business Day (without any interest or other payment in respect of any such
delay) except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date fixed for repayment. If
payment of the Redemption Price in respect of any Securities is improperly
withheld or refused and not paid either by the Property Trustee or by the
Sponsor as guarantor pursuant to the relevant Securities Guarantee,
Distributions on such Securities will continue to accrue from the original
redemption date to the actual date of payment, in which case the actual payment
date will be considered the date fixed for repayment for purposes of calculating
the Redemption Price and such Securities shall cease to be outstanding.
(d) Redemption/Distribution Notices shall be sent by the Trust to (A)
in respect of the Trust Preferred Securities, DTC or its nominee (or any
successor Clearing Agency or its nominee) if the Global Certificates have been
issued or, if Definitive Trust Preferred Security Certificates have been issued,
to the Holder thereof, and (B) in respect of the Common Securities, to the
Holder thereof.
(e) The Trust shall not be required to (i) issue, or register the
transfer or exchange of, any Securities during a period beginning at the opening
of business 15 days before the mailing of a notice of redemption of Securities
and ending at the close of business on the day of the mailing of the relevant
notice of redemption and (ii) register the transfer or exchange of any
Securities so selected for redemption, in whole or in part, except the
unredeemed portion of any Securities being redeemed in part.
(f) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws) the Sponsor or any of its
subsidiaries may at any time and from time to time purchase outstanding Trust
Preferred Securities by tender, in the open market or by private agreement.
[(7) Repayment at Option of Holders.]
[(a) If a Failed Remarketing (as described in Section 5.2(b) of the
Purchase Contract Agreement and incorporated herein by reference) has occurred,
each holder of Securities who holds such Securities on the day immediately
following the Purchase Contract Settlement Date, shall have the right to require
the Trust to repay all or a portion of such Securities owned by such holder (the
"Put Option") on ___________________ (the "Put Option Exercise Date"), upon at
least three Business Days' prior notice, at a repayment price of $____
A-13
per Security plus an amount equal to the accrued and unpaid Distributions
thereon to the date of payment (the "Put Option Repayment Price").]
[(b) The Trust shall obtain funds to pay the Put Option Repayment Price
of Securities being repaid under the Put Option through presentation by the
Property Trustee, on behalf of the Trust, to the Debenture Issuer, pursuant to
the right of the holder of the Debentures to require the Debenture Issuer to
repay all or a portion of the Debentures on the Put Option Exercise Date,
Debentures in an aggregate principal amount equal to the aggregate stated
liquidation amount of such Securities for repayment on the Put Option Exercise
Date at the Debenture Repayment Price.]
[(c) In order for the Securities to be repaid on the Put Option
Exercise Date, the Trust must receive on or prior to 4:00 p.m. on the third
Business Day immediately preceding the Put Option Exercise Date, at the
Corporate Trust Office of the Property Trustee, the Securities to be repaid with
the form entitled "Option to Elect Repayment" on the reverse thereof or
otherwise accompanying such Security duly completed. Any such notice received by
the Trust shall be irrevocable. All questions as to the validity, eligibility
(including time of receipt) and acceptance of the Securities for repayment shall
be determined by the Trust, whose determination shall be final and binding.]
[(d) Payment of the Put Option Repayment Price to Holders of Securities
shall be made at the Corporate Trust Office of the Property Trustee, provided
that the Property Trustee has received from the Debenture Issuer a sufficient
amount of cash in connection with the related repayment of the Debentures no
later than 1:00 p.m., New York City time, on the Put Option Exercise Date by
check or wire transfer in immediately available funds at such place and to such
account as may be designated by such Holders. If the Property Trustee holds
immediately available funds sufficient to pay the Put Option Repayment Price of
such Securities, then, immediately prior to the close of business on the Put
Option Exercise Date, such Securities will cease to be outstanding and
distributions thereon will cease to accrue, whether or not Securities are
delivered to the Property Trustee, and all other rights of the Holder in respect
of the Securities, including the Holder's right to require the Trust to repay
such Securities, shall terminate and lapse (other than the right to receive the
Put Option Repayment Price but without interest on such Put Option Repayment
Price). Neither the Administrative Trustees nor the Trust shall be required to
register or cause to be registered the transfer of any Securities for which
repayment has been elected. If payment of the Put Option Repayment Price in
respect of Securities is (i) improperly withheld or refused and not paid either
by the Property Trustee or by the Sponsor as guarantor pursuant to the
Securities Guarantees, or (ii) not paid by the Property Trustee as the result of
an Event of Default with respect to the Debentures presented for repayment as
described in paragraph 6(b), Distributions on such Securities will continue to
accrue, from the original Put Option Exercise Date to the actual date of
payment, in which case the actual payment date will be considered the Put Option
Exercise Date for purposes of calculating the Put Option Repayment Price.]
[(e) The Debenture Issuer will request, not later than 10 nor more than
15 calendar days prior to ___________ (the date on which some or all of the
Trust Preferred Securities could be remarketed in the manner described in
Section 5.2(b) of the Purchase Contract Agreement and incorporated herein by
reference) that DTC notify the Trust Preferred
A-14
Securities Holders of such remarketing and of the procedures that must be
followed if a Holder of Trust Preferred Securities wishes to exercise such
Holder's rights with respect to the Put Option.]
(8) Voting Rights - Trust Preferred Securities.
(a) Except as provided under Sections 8(b) and 10 and as otherwise
required by law and the Agreement, including these Terms and Conditions, the
Holders of the Trust Preferred Securities will have no voting rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a Majority in liquidation amount of the Trust Preferred Securities,
acting separately as a class may direct the time, method, and place of
conducting any proceeding for any remedy available to the Property Trustee, or
the exercise of any trust or power conferred upon the Property Trustee under the
Agreement, including (i) directing the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or exercising any
trust or power conferred on the Debenture Trustee with respect to the
Debentures, (ii) waiving any past default and its consequences that is waivable
under the Indenture, (iii) exercising any right to rescind or annul a Agreement
that the principal of all the Debentures shall be due and payable, or (iv)
consenting to any amendment, modification or termination of the Indenture or the
Debentures where such consent shall be required, provided, however, that, where
a consent or action under the Indenture specifically would require the consent
or act of the Holders of greater than a majority of the Holders in principal
amount of Debentures affected thereby (a "Super Majority"), the Property Trustee
may only give such consent or take such action at the written direction of the
Holders of at least the proportion in liquidation amount of the Trust Preferred
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding. The Property Trustee shall not
revoke any action previously authorized or approved by a vote of the Holders of
the Trust Preferred Securities. Other than with respect to directing the time,
method and place of conducting any remedy available to the Property Trustee or
the Debenture Trustee as set forth above, the Property Trustee shall not take
any action in accordance with the directions of the Holders of the Trust
Preferred Securities under this paragraph unless the Property Trustee has
obtained an opinion of tax counsel to the effect that for the purposes of United
States federal income tax the Trust will not be classified as other than a
grantor trust on account of such action. If the Property Trustee fails to
enforce its rights under the Debentures after a Holder of Trust Preferred
Securities has made a written request, such Holder of Trust Preferred Securities
may, to the fullest extent permitted by applicable law, institute a legal
proceeding directly against the Debenture Issuer to enforce the Property
Trustee's rights under the Debentures without first instituting a legal
proceeding against the Property Trustee or any other Person. Notwithstanding the
foregoing, if an Event of Default has occurred and is continuing and such event
is attributable to the failure of the Debenture Issuer to pay interest or
principal on the Debentures on the date such interest or principal is otherwise
payable (or in the case of redemption, on the redemption date), then a Holder of
Trust Preferred Securities may directly institute a proceeding for enforcement
of payment to such Holder of the principal of or interest on the Debentures
having a principal amount equal to the aggregate liquidation amount of the Trust
Preferred Securities of such Holder on or after the respective due date
specified in the Debentures. Except as provided in the preceding sentence, the
Holders of Trust Preferred Securities shall not exercise directly any other
remedy available to the holders of the Debentures.
A-15
Any approval or direction of Holders of Trust Preferred Securities may
be given at a separate meeting of Holders of Trust Preferred Securities convened
for such purpose, at a meeting of all of the Holders of Securities in the Trust
or pursuant to written consent. The Administrative Trustees will cause a notice
of any meeting at which Holders of Trust Preferred Securities are entitled to
vote, or of any matter upon which action by written consent of such Holders is
to be taken, to be mailed to each Holder of record of Trust Preferred
Securities. Each such notice will include a statement setting forth (i) the date
of such meeting or the date by which such action is to be taken, (ii) a
description of any resolution proposed for adoption at such meeting on which
such Holders are entitled to vote or of such matter upon which written consent
is sought and (iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Trust Preferred Securities
will be required for the Trust to repay and cancel Trust Preferred Securities or
to distribute the Debentures in accordance with the Agreement and the terms of
the Securities. Notwithstanding that Holders of Trust Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Trust Preferred Securities that are owned by the Sponsor or any Affiliate
of the Sponsor shall not be entitled to vote or consent and shall, for purposes
of such vote or consent, be treated as if they were not outstanding.
(9) Voting Rights - Common Securities.
(a) Except as provided under Sections 9(b) and (c) and 10 and as
otherwise required by law and the Agreement, including these Terms and
Conditions, the Holders of the Common Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Agreement, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Agreement and only after any Event of
Default with respect to the Trust Preferred Securities has been cured, waived,
or otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in liquidation amount of
the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred upon the Property
Trustee under the Agreement, including (i) directing the time, method, and place
of conducting any proceeding for any remedy available to the Debenture Trustee,
or exercising any trust or power conferred on the Debenture Trustee with respect
to the Debentures, (ii) waive any past default and its consequences that is
waivable under the Indenture, or (iii) exercise any right to rescind or annul a
Agreement that the principal of all the Debentures shall be due and payable,
provided that, where a consent or action under the Indenture specifically would
require the consent or act of the Holders of a Super Majority, the Property
Trustee may only give such consent or take such action at the written direction
of the Holders of at least the proportion in liquidation amount of the Common
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding. Pursuant to this Section 9(c),
the Property Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Trust Preferred Securities. Other than
with respect to directing the time, method
A-16
and place of conducting any remedy available to the Property Trustee or the
Debenture Trustee as set forth above, the Property Trustee shall not take any
action in accordance with the directions of the Holders of the Common Securities
under this paragraph unless the Property Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United States federal income tax
the Trust will not be classified as other than a grantor trust on account of
such action. If the Property Trustee fails to enforce its rights under the
Agreement, any Holder of Common Securities may institute a legal proceeding
directly against any Person to enforce the Property Trustee's rights under the
Agreement, without first instituting a legal proceeding against the Property
Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for such purpose,
at a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent. The Administrative Trustees will cause a notice of any meeting
at which Holders of Common Securities are entitled to vote, or of any matter
upon which action by written consent of such Holders is to be taken, to be
mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Agreement and the terms of the Securities.
(10) Amendments to Agreement and Indenture.
(a) In addition to any requirements under Section 12.1 of the
Agreement, if any proposed amendment to the Agreement provides for, or the
Administrative Trustees otherwise propose to effect, (i) any action that would
materially adversely affect the powers, preferences or special rights of the
Securities, whether by way of amendment to the Agreement or otherwise, or (ii)
the dissolution of the Trust, other than as described in Section 8.1 of the
Agreement, then the Holders of outstanding Securities as a class will be
entitled to vote on such amendment or proposal (but not on any other amendment
or proposal) and such amendment or proposal shall not be effective except with
the approval of the Holders of at least a Majority in liquidation amount of the
Securities, voting together as a single class; provided, however, if any
amendment or proposal referred to in clause (i) above would adversely affect
only the Trust Preferred Securities or only the Common Securities, then only the
affected class will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of a
Majority in liquidation amount of such class of Securities.
(b) In the event the consent of the Property Trustee as the holder of
the Debentures is required under the Indenture with respect to any amendment,
modification or termination on the Indenture or the Debentures, the Property
Trustee shall request the written direction of the Holders with respect to such
amendment, modification or termination and shall vote with respect to such
amendment, modification or termination as directed by a Majority in liquidation
amount of the Securities voting together as a single class; provided, however,
that
A-17
where a consent under the Indenture specifically would require a Super Majority,
the Property Trustee may only give such consent at the direction of the Holders
of at least the proportion in liquidation amount of the Securities which the
relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding; provided further, that the Property Trustee shall not
take any action in accordance with the directions of the Holders under this
Section 10(b) unless (i) the Property Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United States federal income tax
the Trust will not be classified as other than a grantor trust on account of
such action or (ii) such action would not reduce or otherwise adversely affect
powers of the Property Trustee or (iii) cause the Trust to be deemed an
"investment company" which is required to be registered under the Investment
Company Act.
(11) Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, in relation to a payment, an Event of Default
under the Agreement has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the Trust
Preferred Securities pro rata according to the aggregate liquidation amount of
Trust Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Trust Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Trust Preferred
Securities, to each Holder of Common Securities pro rata according to the
aggregate liquidation amount of Common Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Common Securities
outstanding.
(12) Listing.
The Administrative Trustees shall use their best efforts to cause the
Trust Preferred Securities to be listed for quotation on the New York Stock
Exchange.
(13) Ranking.
The Trust Preferred Securities rank pari passu and payment thereon
shall be made Pro Rata with the Common Securities except that, where an Event of
Default occurs and is continuing under the Indenture in respect of the
Debentures held by the Property Trustee, the rights of Holders of the Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights to payment of the
Holders of the Trust Preferred Securities.
(14) Acceptance of Securities Guarantee and Indenture.
Each Holder of Trust Preferred Securities and Common Securities by the
acceptance thereof, agrees to the provisions of the Trust Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein, and to the provisions of the Indenture.
(15) No Preemptive Rights.
A-18
The Holders shall have no preemptive rights to subscribe for any
additional securities.
(16) Additional Provisions.
[Include additional provisions for conversion, exchange or otherwise,
if any.]
(17) Miscellaneous.
These terms constitute a part of the Agreement.
The Sponsor will provide a copy of the Agreement, the Trust Preferred
Securities Guarantee or the Common Securities Guarantee (as may be appropriate),
and the Indenture to a Holder without charge on written request to the Sponsor
at its principal place of business.
A-19
IN WITNESS WHEREOF, the undersigned has caused these Terms and
Conditions to be executed as of ________________.
_________________________________________
____________, Administrative Trustee
of the Trust
_________________________________________
____________ , Administrative Trustee
of the Trust
A-20
EXHIBIT A-1
FORM OF TRUST PREFERRED SECURITY CERTIFICATE
[NOTE: This is a form of Trust Preferred Security Certificate. The actual
Trust Preferred Security Certificate may vary substantially from this form,
as contemplated by Section 7.1(b) of the form of Amended and Restated
Trust Agreement.]
[IF THE TRUST PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT -
This Trust Preferred Security is a Global Certificate within the meaning of the
Agreement hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary. This
Trust Preferred Security is exchangeable for Trust Preferred Securities
registered in the name of a person other than the Depositary or its nominee only
in the limited circumstances described in the Agreement and no transfer of this
Trust Preferred Security (other than a transfer of this Trust 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 Trust Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the Trust or its agent for registration of transfer, exchange or
payment, and any Trust Preferred Security issued is registered in the name of
Cede & Co. or such other name as requested by an authorized representative of
The Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.]
Certificate Number________ Number of Trust Preferred Securities________
CUSIP NO. ________
Certificate Evidencing Trust Preferred Securities
of
Detroit Edison Trust [I/II]
___% Trust Preferred Securities
(liquidation amount $___ per Trust Preferred Security)
Detroit Edison Trust [I/II], a statutory trust created under the laws
of the State of Delaware (the "Trust"), hereby certifies that (the "Holder") is
the registered owner of Trust Preferred securities of the Trust representing
preferred undivided beneficial interests in the assets of the Trust designated
as the ___% Trust Preferred Securities (liquidation amount $__ per Trust
Preferred security) (the "Trust Preferred Securities"). The Trust Preferred
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate duly endorsed
A1-1
and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Trust Preferred
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Trust Agreement of the Trust dated as
of _____________, as the same may be amended from time to time (the
"Agreement"), including the designation of the terms of the Trust Preferred
Securities as set forth in Exhibit A to the Agreement. Capitalized terms used
herein but not defined shall have the meaning given them in the Agreement. The
Holder is entitled to the benefits of the Trust Preferred Securities Guarantee
to the extent provided therein. The Sponsor will provide a copy of the
Agreement, the Trust Preferred Securities Guarantee and the Indenture to a
Holder without charge upon written request to the Trust at its principal place
of business.
Upon receipt of this certificate, the Holder is bound by the Agreement
and is entitled to the benefits thereunder.
[In addition, the Holder is deemed to have (i) agreed to the terms of
the Indenture and the Debentures, including that the Debenture are subordinate
and junior in right of payment to all present and future Senior Indebtedness (as
defined in the Indenture) as and to the extent provided in the Indenture and
(ii) agreed to the terms of the Trust Preferred Securities Guarantee, including
that the Trust Preferred Securities Guarantee is subordinate and junior in right
of payment to all other liabilities of the Sponsor, including the Debentures,
except those made pari passu or subordinate by their terms, and pari passu with
the most senior preferred or preference stock now or hereafter issued by the
Sponsor and with any guarantee now or hereafter entered into by the Sponsor in
respect of any preferred or preference stock of any Affiliate of the Sponsor.]
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Trust Preferred
Securities as evidence of indirect beneficial ownership in the Debentures.
Unless the Property Trustee's Certificate of Authentication hereon has
been properly executed, the Trust Preferred Securities evidenced by this
Certificate shall not be entitled to any benefit under the Agreement or be valid
or obligatory for any purpose.
A1-2
IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of ____________________.
DETROIT EDISON TRUST [I/II]
By:
----------------------------------------
Name:
Title: Administrative Trustee
By:
----------------------------------------
Name:
Title: Administrative Trustee
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Preferred Securities referred to in the
within-mentioned Agreement
Dated _________, ________
Bank One Trust Company, National Association
as Property Trustee
By:
----------------------------------------
Authorized Signatory
A1-3
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Trust Preferred Security will be
fixed at a rate per annum of ___% (the "Coupon Rate") of the stated liquidation
amount of $____ per Trust Preferred Security, such rate being the rate of
interest payable on the Debentures to be held by the Property Trustee.
Distributions in arrears for more than one quarter will bear interest thereon
compounded quarterly at the Coupon Rate ("Compound Interest") until
[__________________, and at the Reset Rate thereafter] (to the extent permitted
by applicable law). The term "Distributions" as used herein includes such cash
distributions and any such interest (including Additional Interest and Compound
Interest) payable unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Debentures held by the Property
Trustee and to the extent the Property Trustee has actually received and holds
funds available therefor. The amount of Distributions payable for any period
will be computed for any full quarterly Distribution period on the basis of a
360-day year consisting of twelve 30-day months, and for any period shorter than
a full quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days elapsed
per 30-day month.
Except as otherwise described below, Distributions on the
Trust Preferred Securities will be cumulative, will accrue from
____________________ and will be payable quarterly in arrears, on
_________________________________________ of each year, commencing on
____________, _____, to holders of record on the relevant record dates, which
will be, as long as the Trust Preferred Securities remain in book-entry form,
one Business Day prior to such payment date, such payment dates shall correspond
to the interest payment dates on the Debentures. In the event that the Trust
Preferred Securities are not in book-entry form, the Administrative Trustees
will have the right to select relevant record dates, which will be more than one
Business Day but less than 60 Business Days prior to the relevant payment dates.
The Debenture Issuer has the right under the Indenture to defer payments of
interest by extending the interest payment period from time to time on the
Debentures for a period not exceeding 20 consecutive quarters (each an
"Extension Period"), provided that no Extension Period shall last beyond the
date of the maturity of the Debentures and, as a consequence of such deferral,
quarterly Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded quarterly during any
such Extension Period. Prior to the termination of any such Extension Period,
the Debenture Issuer may further extend such Extension Period; provided that
such Extension Period together with all such previous and further extensions
thereof may not exceed 20 consecutive quarters or extend beyond the maturity of
the Debentures. Payments of accrued Distributions will be payable to Holders as
they appear on the books and records of the Trust on the first record date after
the end of the Extension Period. Upon the termination of any Extension Period
and the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
The Trust Preferred Securities shall be redeemable as provided
in the Agreement.
A1-4
[OPTION TO ELECT REPAYMENT]
The undersigned hereby irrevocably requests and instructs the
Trust to repay $__ stated liquidation amount of the within Trust Preferred
Security, pursuant to its terms, on the "Put Option Exercise Date," together
with distributions thereon accrued but unpaid to the date of repayment, to the
undersigned at:
________________________________________________________________
(Please print or type Name and Address of the Undersigned)
and to issue to the undersigned, pursuant to the terms of the Agreement, a new
Trust Preferred Security or Trust Preferred Securities representing the
remaining stated liquidation amount of this Trust Preferred Security.
For this Option to Elect Repayment to be effective, the within Trust Preferred
Security with this Option to Elect Repayment duly completed must be received by
the Trust at the [Corporate Trust Office] of the Property Trustee at [Bank One
Trust Company, National Association, 100 East Broad Street, Columbus, Ohio
43271. Attention: [Corporate Trust Administration].
Dated:
________________________
Signature:
________________________________________
Signature Guarantee:
______________________________
(Sign exactly as your name appears on the other side of this Trust Preferred
Security Certificate)
Note: The signature to this Option to Elect Repayment must correspond with the
name as written upon the face of the within Trust Preferred Security in every
particular without alternation or enlargement or any change whatsoever.
A1-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Trust Preferred Security Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
agent to transfer this Trust Preferred Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Dated:
_______________________
Signature:
__________________________________________
Signature Guarantee:
________________________________
(Sign exactly as your name appears on the other side of this Trust Preferred
Security Certificate)
(Signature(s) must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Trustee, which requirements include membership or
participation in STAMP or such other "signature guaranty program" as may be
determined by the Trustee in addition to or in substitution for STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
A1-6
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
[NOTE: This is a form of Common Security Certificate. The actual Common
Security Certificate may vary substantially from this form, as contemplated
by Section 7.1(b) of the form of Amended and Restated Trust Agreement.]
The Common Securities may only be transferred by the Debenture Issuer
and any Related Party to the Debenture Issuer or a Related Party of the
Debenture Issuer; provided that, any such transfer is subject to the condition
precedent that the transferor obtain the written opinion of nationally
recognized independent counsel experienced in such matters that such transfer
would not cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States federal income
tax purposes as a grantor Trust; and
(ii) the Trust would be an Investment Company or the transferee would
become an Investment Company.
Certificate Number_______ Number of Trust Preferred Securities_________
CUSIP NO. _________
Certificate Evidencing Common Securities
of
Detroit Edison Trust [I/II]
___% Common Securities
(liquidation amount $___ per Common Security)
Detroit Edison Trust [I/II], a statutory trust created under the laws
of the State of Delaware (the "Trust"), hereby certifies that The Detroit Edison
Company (the "Holder") is the registered owner of _________ common securities of
the Trust representing common undivided beneficial interests in the assets of
the Trust designated as the ___% Common Securities (liquidation amount $___ per
common security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued and shall in all respects be subject to the provisions of the
Amended and Restated Trust Agreement of the Trust dated as of __________, ____,
as the same may be amended from time to time (the "Agreement"), including the
designation of the terms of the Common Securities as set forth in Exhibit A to
the Agreement. Capitalized terms used herein but not defined shall have the
meaning given them in the Agreement. The Holder is entitled to the benefits of
the Common Securities Guarantee to the extent provided therein. The Sponsor will
provide a copy of the Agreement, the Common
A2-1
Securities 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 Sponsor is bound by the Agreement
and is entitled to the benefits thereunder.
[In addition, the Holder is deemed to have (i) agreed to the terms of
the Indenture and the Debentures, including that the Debentures are subordinate
and junior in right of payment to all present and future Senior Indebtedness (as
defined in the Indenture) as and to the extent provided in the Indenture and
(ii) agreed to the terms of the Common Securities Guarantee, including that the
Common Securities Guarantee is subordinate and junior in right of payment to all
other liabilities of the Sponsor, including the Debentures, except those made
pari passu or subordinate by their terms, and pari passu with any guarantee now
or hereafter entered into by the Sponsor in respect of any preferred or
preference stock of any Affiliate of the Sponsor.]
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
A2-2
IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of ____________________.
DETROIT EDISON TRUST [I/II]
By:
-------------------------------------------
Name:
Title: Administrative Trustee
By:
-------------------------------------------
Name:
Title: Administrative Trustee
A2-3
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at
a rate per annum of ___% (the "Coupon Rate") of the stated liquidation amount of
$___ per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one quarter will bear interest thereon compounded quarterly at the Coupon
Rate ("Compound Interest") until [________________________, and at the Reset
Rate thereafter] (to the extent permitted by applicable law). The term
"Distributions" as used herein includes such cash distributions and any such
interest (including Additional Interest and Compound Interest) payable unless
otherwise stated. A Distribution is payable only to the extent that payments are
made in respect of the Debentures held by the Property Trustee and to the extent
the Property Trustee has actually received and holds funds available therefor.
The amount of Distributions payable for any period will be computed for any full
quarterly Distribution period on the basis of a 360-day year of twelve 30-day
months, and for any period shorter than a full quarterly Distribution period for
which Distributions are computed, Distributions will be computed on the basis of
the actual number of days elapsed per 30-day month.
Except as otherwise described below, distributions on the
Common Securities will be cumulative, will accrue from ____________________ and
will be payable quarterly in arrears, on _________________________________ of
each year, commencing on __________, ______, to Holders of record on the
relevant record dates, which will be, as long as the Common Securities remain in
book-entry form, one Business Day prior to such payment dates, such payment
dates shall correspond to the interest payment dates on the Debentures. The
Debenture Issuer has the right under the Indenture to defer payments of interest
by extending the interest payment period from time to time on the Debentures for
a period not exceeding 20 consecutive quarters (each an "Extension Period"),
provided that no Extension Period shall last beyond the date of the maturity of
the Debentures and, as a consequence of such deferral, quarterly Distributions
will also be deferred. Despite such deferral, quarterly Distributions will
continue to accrue with interest thereon (to the extent permitted by applicable
law) at the Coupon Rate compounded quarterly during any such Extension Period.
Prior to the termination of any such Extension Period, the Debenture Issuer may
further extend such Extension Period; provided that such Extension Period
together with all such previous and further extensions thereof may not exceed 20
consecutive quarters or extend beyond the maturity date of the Debentures.
Payments of accrued Distributions will be payable to Holders as they appear on
the books and records of the Trust on the first record date after the end of the
Extension Period. Upon the termination of any Extension Period and the payment
of all amounts then due, the Debenture Issuer may commence a new Extension
Period, subject to the above requirements.
The Common Securities shall be redeemable as provided in the
Agreement.
A2-4
[OPTION TO ELECT REPAYMENT]
The undersigned hereby irrevocably requests and instructs the
Trust to repay $__ stated liquidation amount of the within Common Security,
pursuant to its terms, on the "Put Option Exercise Date," together with
distributions thereon accrued and unpaid to the date of repayment, to the
undersigned at:
________________________________________________________________
(Please print or type Name and Address of the Undersigned)
and to issue to the undersigned, pursuant to the terms of the Agreement, a new
Common Security or Common Securities representing the remaining stated
liquidation amount of this Common Security.
For this Option to Elect Repayment to be effective, the within Common Security
with this Option to Elect Repayment duly completed must be received by the Trust
at the [Corporate Trust Office] of the Property Trustee at [Bank One Trust
Company, National Association, 100 East Broad Street, Columbus, Ohio 43271],
Attention: [Corporate Trust Administration].
Dated:
-----------------------
Signature:
------------------------------------------
Signature Guarantee:
--------------------------------
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
Note: The signature to this Option to Elect Repayment must correspond with the
name as written upon the face of the within Common Security in every particular
without alternation or enlargement or any change whatsoever.
A2-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Common Security Certificate to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Dated:
-----------------------
Signature:
------------------------------------------
Signature Guarantee:
--------------------------------
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
(Signature(s) must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Trustee, which requirements include membership or
participation in STAMP or such other "signature guaranty program" as may be
determined by the Trustee in addition to or in substitution for STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
A2-6