EXHIBIT 4(c)
AVA CAPITAL TRUST III
AMENDED AND RESTATED
DECLARATION OF TRUST
AMONG
AVISTA CORPORATION, AS SPONSOR,
UNION BANK OF CALIFORNIA, N.A., AS INSTITUTIONAL TRUSTEE,
SUNTRUST DELAWARE TRUST COMPANY, AS DELAWARE TRUSTEE,
AND
MALYN K. MALQUIST AND DIANE C. THOREN,
AS REGULAR TRUSTEES
DATED AS OF APRIL 5, 2004
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINED TERMS............................................................................ 2
SECTION 1.01. Definitions........................................ 2
ARTICLE II ESTABLISHMENT OF THE TRUST.............................................................. 11
SECTION 2.01. Name............................................... 11
SECTION 2.02. Offices of the Trustees; Principal Place
of Business.................................... 11
SECTION 2.03. Initial Contribution of Trust Property;
Organizational Expenses........................ 11
SECTION 2.04. Issuance of the Preferred Securities............... 12
SECTION 2.05. Subscription and Purchase of Subordinated
Debt Securities; Issuance of the
Common Securities.............................. 12
SECTION 2.06. Declaration of Trust............................... 12
SECTION 2.07. Authorization to Enter into Certain
Transactions................................... 12
SECTION 2.08. Assets of Trust.................................... 17
SECTION 2.09. Title to Trust Property............................ 17
SECTION 2.10. Mergers and Consolidations of the Trust............ 18
ARTICLE III PAYMENT ACCOUNT........................................................................... 19
SECTION 3.01. Payment Account.................................... 19
ARTICLE IV DISTRIBUTIONS; REDEMPTION.................................................................. 19
SECTION 4.01. Distributions...................................... 19
SECTION 4.02. Distribution Rate.................................. 20
SECTION 4.03. Distribution Periods............................... 24
SECTION 4.04. Redemption......................................... 25
SECTION 4.05. Subordination of Common Securities and
Distributions.................................. 26
SECTION 4.06. Payment Procedures................................. 27
SECTION 4.07. Tax Returns and Reports............................ 27
SECTION 4.08. Exchange........................................... 28
ARTICLE V TRUST SECURITIES CERTIFICATES............................................................... 28
SECTION 5.01. Initial Ownership.................................. 28
SECTION 5.02. The Trust Securities Certificates.................. 29
SECTION 5.03. Authentication of Trust Securities
Certificates................................... 29
SECTION 5.04. Registration of Transfer and Exchange of
Preferred Securities Certificates.............. 29
SECTION 5.05. Mutilated, Destroyed, Lost or Stolen Trust
Securities Certificates........................ 30
SECTION 5.06. Persons Deemed Securityholders..................... 30
SECTION 5.07. Access to List of Securityholders' Names
and Addresses.................................. 31
SECTION 5.08. Maintenance of Office or Agency.................... 31
SECTION 5.09. Appointment of Paying Agent........................ 31
SECTION 5.10. Ownership of Common Securities by Sponsor.......... 32
SECTION 5.11. Book-Entry Preferred Securities
Certificates; Common Securities
Certificate.................................... 32
SECTION 5.12. Notices to Clearing Agency......................... 33
SECTION 5.13. Definitive Preferred Securities
Certificates................................... 33
SECTION 5.14. Rights of Securityholders.......................... 34
ARTICLE VI ACTS OF SECURITYHOLDERS; MEETINGS; VOTING.................................................. 34
SECTION 6.01. Limitations on Voting Rights....................... 34
SECTION 6.02. Notice of Meetings................................. 37
SECTION 6.03. Meetings of Holders of Preferred Securities........ 38
SECTION 6.04. Voting Rights...................................... 38
SECTION 6.05. Proxies, etc....................................... 38
SECTION 6.06. Securityholder Action by Written Consent........... 38
SECTION 6.07. Record Date for Voting and Other Purposes.......... 39
SECTION 6.08. Acts of Securityholders............................ 39
SECTION 6.09. Inspection of Records.............................. 40
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE TRUSTEES............................................ 40
SECTION 7.01. Representations and Warranties of the
Trustees....................................... 40
ARTICLE VIII THE TRUSTEES............................................................................. 41
SECTION 8.01. Certain Duties and Responsibilities................ 41
SECTION 8.02. Notice of Defaults................................. 42
SECTION 8.03. Certain Rights of Institutional Trustee............ 42
SECTION 8.04. Not Responsible for Recitals or Issuance
of Securities.................................. 43
SECTION 8.05. May Hold Securities................................ 44
SECTION 8.06. Compensation; Fees; Indemnity...................... 44
SECTION 8.07. Trustees Required; Eligibility..................... 44
SECTION 8.08. Conflicting Interests.............................. 45
SECTION 8.09. Co-Trustees and Separate Trustee................... 45
SECTION 8.10. Resignation and Removal; Appointment of
Successor...................................... 46
SECTION 8.11. Acceptance of Appointment by Successor............. 48
SECTION 8.12. Merger, Conversion, Consolidation or
Succession to Business......................... 48
SECTION 8.13. Preferential Collection of Claims Against
Sponsor or Trust............................... 48
SECTION 8.14. Reports by Institutional Trustee................... 49
SECTION 8.15. Reports to the Institutional Trustee............... 49
SECTION 8.16. Evidence of Compliance with Conditions
Precedent...................................... 49
SECTION 8.17. Number of Trustees................................. 50
SECTION 8.18. Delegation of Power................................ 50
SECTION 8.19. Enforcement of Rights of Institutional
Trustee by Securityholders..................... 50
SECTION 8.20. Delaware Trustee................................... 51
ARTICLE IX DISSOLUTION AND LIQUIDATION................................................................ 51
SECTION 9.01. Dissolution Upon Expiration Date................... 51
SECTION 9.02. Early Termination.................................. 52
SECTION 9.03. Termination........................................ 52
SECTION 9.04. Liquidation........................................ 52
SECTION 9.05. Bankruptcy......................................... 53
SECTION 9.06. Certificate of Cancellation........................ 54
ARTICLE X REMARKETING PROCEDURES...................................................................... 54
SECTION 10.01. Election to Remarket............................... 54
SECTION 10.02. Notice of Election................................. 54
SECTION 10.03. Determination of Distribution Rate................. 55
ARTICLE XI MISCELLANEOUS PROVISIONS................................................................... 57
SECTION 11.01. Guarantee by the Sponsor........................... 57
SECTION 11.02. Limitation of Rights of Securityholders............ 57
SECTION 11.03. Amendment.......................................... 57
SECTION 11.04. Separability....................................... 59
SECTION 11.05. Governing Law...................................... 59
SECTION 11.06. Successors......................................... 59
SECTION 11.07. Headings........................................... 59
SECTION 11.08. Notice and Demand.................................. 59
SECTION 11.09. Agreement Not to Petition.......................... 60
SECTION 11.10. Conflict with Trust Indenture Act.................. 60
AVA CAPITAL TRUST III
Certain Sections of this Declaration of Trust relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Act Section Declaration of Trust Section
- --------------------------- ----------------------------
Section 310(a)(1) ........................................................................ 8.07
(a)(2) ............................................................................ 8.07
(a)(3) ............................................................................ 8.09
(a)(4) ............................................................................ Not Applicable
(b) ............................................................................... 8.08
Section 311(a) ........................................................................... 8.13
(b) ............................................................................... 8.13
Section 312(a) ........................................................................... 5.07
(b) ............................................................................... 5.07
(c) ............................................................................... 5.07
Section 313(a) ........................................................................... 8.14(a)
(a)(4) ............................................................................ 8.14(b)
(b) ............................................................................... 8.14(b)
(c) ............................................................................... 8.14(a)
(d) ............................................................................... 8.14(a), 8.14(b)
Section 314(a) ........................................................................... 8.15
(b) ............................................................................... Not Applicable
(c)(1) ............................................................................ 8.15, 8.16
(c)(2) ............................................................................ 8.16
(c)(3) ............................................................................ 8.16
(d) ............................................................................... Not Applicable
(e) ............................................................................... 8.16
Section 315(a) ........................................................................... 8.01
(b) ............................................................................... 8.02, 8.14(b)
(c) ............................................................................... 8.01(a)
(d) ............................................................................... 8.01, 8.03
(e) ............................................................................... Not Applicable
Section 316(a) ........................................................................... Not Applicable
(a)(1)(A) ......................................................................... 8.19
(a)(1)(B) ......................................................................... 8.19
(a)(2) ............................................................................ Not Applicable
(b) ............................................................................... Not Applicable
(c) ............................................................................... Not Applicable
Section 317(a)(1) ........................................................................ Not Applicable
(a)(2) ............................................................................ Not Applicable
(b) ............................................................................... 5.09
Section 318(a) ........................................................................... 11.10
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Note: This Cross Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms and provisions.
AMENDED AND RESTATED DECLARATION OF TRUST
THIS AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") is made
as of April 5, 2004, by and among (i) Avista Corporation, a Washington
corporation (the "Sponsor" or the "Company"); (ii) Union Bank of California,
N.A., a national banking association duly organized and existing under the laws
of the United States of America, as trustee (the "Institutional Trustee" and, in
its separate corporate capacity and not in its capacity as Trustee, the "Bank");
(iii) SunTrust Delaware Trust Company, a Delaware limited purpose trust company
duly organized and existing under the laws of the State of Delaware, as Delaware
trustee (the "Delaware Trustee" and, in its separate corporate capacity and not
in its capacity as Delaware Trustee, the "Delaware Bank"); (iv) Malyn K.
Malquist, an individual, and Diane C. Thoren, an individual, as regular trustees
(each a "Regular Trustee" and together the "Regular Trustees") (the
Institutional Trustee, the Delaware Trustee and the Regular Trustees referred to
collectively as the "Trustees"); and (v) the several Holders, as hereinafter
defined.
W I T N E S S E T H :
WHEREAS, a statutory trust has been declared and established pursuant
to the Delaware Statutory Trust Act by entering into that certain Declaration of
Trust, dated as of November 4, 1996 (the "1996 Declaration"), and by the
execution and filing by the Trustees with the Secretary of State of the State of
Delaware of the Certificate of Trust, dated November 4, 1996;
WHEREAS, pursuant to the Removal and Appointment of Trustee and
Amendment of the Declaration of Trust of the Trust, entered into by the Sponsor,
the Bank, the Delaware Bank and a Regular Trustee, dated as of March 9, 2004,
(i) the Sponsor removed Wilmington Trust Company as a trustee of the Trust and
appointed the Bank and the Delaware Bank as trustees of the Trust; (ii) the
Sponsor removed Lawrence J. Pierce as a trustee of the Trust and appointed Malyn
K. Malquist and Diane C. Thoren as trustees of the Trust; and (iii) the 1996
Declaration was amended by changing the name of the Trust from Washington Water
Power Capital III to AVA Capital Trust III. The 1996 Declaration, as amended by
the Removal and Appointment of Trustee and Amendment of the Declaration of Trust
is referred to as the "Original Declaration."
WHEREAS, Malyn K. Malquist executed and filed the Amended and Restated
Certificate of Trust of the Trust with the Secretary of State of the State of
Delaware on March 9, 2004;
WHEREAS, the parties hereto desire to amend and restate the Original
Declaration in its entirety as set forth herein to provide for, among other
things, (i) the acquisition by the Trust from the Sponsor of all of the right,
title and interest in the Subordinated Debt Securities; (ii) the issuance of the
Common Securities by the Trust to the Sponsor; and (iii) the issuance and sale
of the Preferred Securities by the Trust pursuant to the Underwriting Agreement.
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party, for the benefit of the other parties
and for the benefit of the Securityholders, hereby amends and restates the
Original Declaration in its entirety and agrees as follows:
ARTICLE I
DEFINED TERMS
SECTION 1.01 Definitions
For all purposes of this Declaration, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the singular;
(b) all other terms used herein that are defined in the
Trust Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) unless the context otherwise requires, any reference
to an "Article" or a "Section" refers to an Article or a Section, as the case
may be, of this Declaration; and
(d) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Declaration as a whole and not to
any particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.08.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Bank" has the meaning specified in the preamble to this Declaration.
"Bankruptcy Event" means, with respect to any Person:
(i) the entry of a decree or order by a court
having jurisdiction in the premises judging such Person a
bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjudication or
composition of or in respect of such Person under federal
bankruptcy law or any other applicable federal or state law,
or appointing a receiver, liquidator, assignee, trustee,
sequestrator or other similar official of such Person or of
any substantial part of its property, or ordering the winding
up or liquidation of its affairs, and the continuance of such
decree or order unstayed and in effect for a period of 60
consecutive days; or
(ii) the institution by such Person of
proceedings to be adjudicated a bankrupt or insolvent, or the
consent by it to the institution of bankruptcy or insolvency
proceedings against it, or the filing by it of a petition or
answer or
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consent seeking reorganization or relief under federal
bankruptcy law or any other applicable federal or state law,
or the consent by it to the filing of such petition or to the
appointment of a receiver, liquidator, assignee, trustee,
sequestrator or similar official of such Person or of any
substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by
it in writing of its inability to pay its debts generally as
they become due, or the taking of action by such Person in
furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 11.09.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Sponsor to have been duly adopted by
the Sponsor's Board of Directors or a duly authorized committee thereof and to
be in full force and effect on the date of such certification, and delivered to
the Trustees.
"Book-Entry Preferred Securities Certificates" means certificates
representing Preferred Securities issued in global, fully registered form to the
Clearing Agency as described in Section 5.11.
"Business Day" means a day other than (i) a Saturday or a Sunday; (ii)
a day on which banks in New York, New York are authorized or obligated by law or
executive order to remain closed; or (iii) a day on which the Indenture
Trustee's corporate trust office is closed for business.
"Calculation Agent" means Union Bank of California, N.A., acting as
calculation agent, or its successor appointed by the Company and the Trust.
"Calculation Agent Agreement" means the agreement among the Company,
the Trust and Union Bank of California, N.A., as calculation agent, dated as of
April 5, 2004.
"Certificate Depository Agreement" means the agreement among the Trust,
the Institutional Trustee and The Depository Trust Company, as the initial
Clearing Agency, dated March 31, 2004, relating to the Preferred Securities
Certificates.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act. The Depository Trust
Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created 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.
3
"Common Security" means an undivided beneficial interest in the assets
of the Trust having a Liquidation Amount of $1,000 and having the rights
provided therefor in this Declaration, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Common Securities Certificate" means a certificate evidencing
ownership of a Common Security or Securities, substantially in the form attached
as Exhibit C.
"Company" means Avista Corporation.
"Declaration" means this Amended and Restated Declaration of Trust, as
the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including all exhibits hereto, including, for all
purposes of this Amended and Restated Declaration of Trust and any modification,
amendment or supplement, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this Amended and Restated Declaration of Trust
and any such modification, amendment or supplement, respectively.
"Definitive Preferred Securities Certificates" means either or both (as
the context requires) of (i) Preferred Securities Certificates issued in
certificated, fully registered form as provided in Section 5.11(a) and (ii)
Preferred Securities Certificates issued in certificated, fully registered form
as provided in Section 5.13.
"Delaware Bank" has the meaning specified in the preamble to this
Declaration.
"Delaware Statutory Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time
to time.
"Delaware Trustee" means the commercial bank or trust company or any
other Person identified as the "Delaware Trustee" and has the meaning specified
in the preamble to this Declaration solely in its capacity as Delaware Trustee
of the Trust and not in its individual capacity, or its successor in interest in
such capacity, or any successor Delaware Trustee appointed as herein provided.
"Designated CMT Maturity Index" means the original period to maturity
of the U.S. Treasury securities (10 years) with respect to which the 10-year
Treasury CMT will be calculated.
"Distribution Payment Date" means each day on which Distributions are
payable determined based on the prevailing Distribution Rate.
"Distribution Period" means each semiannual period in a Fixed Rate
Period and each quarterly period in a Floating Rate Period for which
Distributions are payable.
"Distribution Rate" means the rate at which Distributions will accrue
in respect of any Distribution Period, as determined pursuant to the terms of
this Declaration, whether by Remarketing or otherwise.
4
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.01.
"Election Date" means a date that is no later than the fifth Business
Day prior to the proposed Remarketing Date.
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the occurrence of an Indenture Event of Default;
(b) default by the Trust in the payment of any
Distribution when it becomes due and payable, and continuation of such default
for a period of 60 days;
(c) default by the Trust in the payment of any Redemption
Price of any Trust Security when it becomes due and payable;
(d) default in the performance, or breach, in any
material respect, of any covenant or warranty of the Institutional Trustee and
the Delaware Trustee in this Declaration (other than a covenant or warranty a
default in the performance of which or the breach of which is dealt with in
clause (b) or (c) above) and continuation of such default or breach for a period
of 60 days after there has been give, by registered or certified mail, to the
appropriate trustees and the Sponsor by the Holders of at least 33% in aggregate
Liquidation Amount of the Outstanding Preferred Securities, a written notice
specifying such default or breach and requiring it to be remedied and stating
that such notice is a "Notice of Default" hereunder;
(e) the occurrence of any Bankruptcy Event with respect
to the Institutional Trustee or all or substantially all of its property if a
successor Institutional Trustee has not been appointed within a period of 90
days thereof; or
(f) the occurrence of any Bankruptcy Event with respect
to the Trust.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expense Agreement" means the Agreement as to Expenses and Liabilities
between the Company and the Trust, substantially in the form attached as Exhibit
B, as amended from time to time.
"Extension Period" has the meaning specified in Section 4.01(d).
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System.
"Fixed Rate" means the Distribution Rate during a Fixed Rate Period as
determined by a Remarketing.
5
"Fixed Rate Period" means the Initial Fixed Rate Period and each period
set by the Company and the Regular Trustees during a Remarketing for which the
Fixed Rate determined in such Remarketing will apply; provided, however, that a
Fixed Rate Period must be for a duration of at least six months, may not extend
beyond the stated maturity of the Subordinated Debt Securities and may not end
on a day other than a day immediately preceding a Distribution Payment Date.
"Floating Rate" means the Distribution Rate during a Floating Rate
Period calculated pursuant to Section 4.02(e).
"Floating Rate Determination Date" means the second London Business Day
immediately preceding the first day of the relevant Distribution Period in the
Floating Rate Period.
"Floating Rate Period" means any period during which a Floating Rate is
in effect.
"Guarantee" means the Guarantee Agreement executed and delivered by the
Company and Union Bank of California, N.A., as Guarantee Trustee,
contemporaneously with the execution and delivery of this Declaration, for the
benefit of the Holders of the Trust Securities, as amended from time to time.
"Indenture Event of Default" means an "Event of Default" as defined in
the Subordinated Indenture.
"Indenture Redemption Date" means "Redemption Date," as defined in the
Subordinated Indenture.
"Indenture Trustee" means the trustee under the Subordinated Indenture.
"Initial Distribution Rate" means 6.50% per annum.
"Initial Fixed Rate Period" means the Issue Date through March 31,
2009.
"Institutional Trustee" means the commercial bank or trust company
identified as the "Institutional Trustee" in the preamble to this Declaration
solely in its capacity as Institutional Trustee of the Trust and not in its
individual capacity, or its successor in interest in such capacity, or any
successor "Institutional Trustee" as herein provided.
"Investment Company Act" means the Investment Company Act of 1940, as
amended.
"Issue Date" means the date of the delivery of the Trust Securities.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (i) Trust Securities having a Liquidation Amount
equal to the principal amount of Subordinated Debt Securities to be
contemporaneously redeemed or repaid
6
in accordance with the Subordinated Indenture and the proceeds of which will be
used to pay the Redemption Price of such Trust Securities and (ii) Subordinated
Debt Securities having a principal amount equal to the Liquidation Amount of the
Trust Securities of the Holder to whom such Subordinated Debt Securities are
distributed.
"Liquidation Amount" means the stated amount of $1,000 per Trust
Security.
"Liquidation Date" means the date on which Subordinated Debt Securities
are to be distributed to Holders of Trust Securities in connection with a
dissolution and liquidation of the Trust pursuant to Section 9.04.
"Liquidation Distribution" has the meaning specified in Section 9.05.
"London Business Day" means a day that is a Business Day and a day on
which dealings in deposits in U.S. dollars are transacted, or with respect to
any future date are expected to be transacted, in the London interbank market.
"Maturity Date of the Subordinated Debt Securities" means "Stated
Maturity" as defined in the Subordinated Indenture.
"Majority in Liquidation Amount of the Preferred Securities" or
"Majority in Liquidation Amount of the Common Securities" means, except as
provided by the Trust Indenture Act, Preferred Securities or Common Securities,
as the case may be, representing more than 50% of the aggregate Liquidation
Amount of all then Outstanding Preferred Securities or Common Securities, as the
case may be.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Sponsor, and
delivered to the appropriate Trustee. One of the officers signing an Officers'
Certificate given pursuant to Section 8.16 shall be the principal executive,
financial or accounting officer of the Sponsor. An Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Declaration shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering the
Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as is necessary, in such officer's opinion, to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Trust, the Trustees or the Sponsor, but not an employee of the
Trust or the Trustees, and who
7
shall be reasonably acceptable to the Institutional Trustee. Any Opinion of
Counsel pertaining to federal income tax matters may rely on published rulings
of the Internal Revenue Service.
"Original Declaration of Trust" has the meaning specified in the
recitals to this Declaration.
"Outstanding", when used with respect to Preferred Securities, means,
as of the date of determination, all Preferred Securities theretofore
authenticated and delivered under this Declaration, except:
(i) Preferred Securities theretofore canceled by
the Regular Trustees or delivered to the Regular Trustees for
cancellation;
(ii) Preferred Securities for whose payment or
redemption money in the necessary amount has been theretofore
deposited with the Institutional Trustee or any Paying Agent
for the Holders of such Preferred Securities; provided that if
such Preferred Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Declaration;
and
(iii) Preferred Securities in exchange for or in
lieu of which other Preferred Securities have been
authenticated and delivered pursuant to this Declaration;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Preferred Securities owned by the Sponsor, the Holder of the Common Securities,
any Trustee or any Affiliate of the Sponsor or any Trustee shall be disregarded
and deemed not to be Outstanding, except that (a) in determining whether any
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Preferred Securities
which such Trustee knows to be so owned shall be so disregarded and (b) the
foregoing shall not apply at any time when all of the outstanding Preferred
Securities are owned by the Sponsor, the Holder of the Common Securities, one or
more Trustees and/or any such Affiliate. 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 Regular Trustees the pledgee's right so
to act with respect to such Preferred Securities and that the pledgee is not the
Sponsor or any Affiliate of the Sponsor.
"Owner" means each Person who is the beneficial owner of a Book-Entry
Preferred Securities Certificate as reflected in the records of the Clearing
Agency or, if a Clearing Agency Participant is not the Owner, then as reflected
in the records of a Person maintaining an account with such Clearing Agency
(directly or indirectly, in accordance with the rules of such Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.09 and shall initially be the Institutional Trustee.
"Payment Account" means a segregated non-interest-bearing corporate
trust account maintained by the Institutional Trustee for the benefit of the
Securityholders in which all
8
amounts paid in respect of the Subordinated Debt Securities will be held and
from which the Institutional Trustee shall make payments to the Securityholders
in accordance with Section 4.01.
"Person" means an individual, corporation, partnership, joint venture,
trust, limited liability company or corporation, unincorporated organization or
government or any agency or political subdivision thereof.
"Preferred Securities Certificate" means a certificate evidencing
ownership of a Preferred Security or Securities, substantially in the form
attached as Exhibit A.
"Preferred Security" means an undivided beneficial interest in the
assets of the Trust having a Liquidation Amount of $1,000 and having rights
provided therefor in this Declaration, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Record Date" means the opening of business on the Business Day
immediately preceding the relevant Distribution Payment Date.
"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Declaration;
provided that each Indenture Redemption Date and the Maturity Date of the
Subordinated Debt Securities shall be a Redemption Date for a Like Amount of
Trust Securities.
"Redemption Price" means, with respect to any date fixed for redemption
of any Trust Security, the Liquidation Amount of such Trust Security, plus
accrued and unpaid Distributions to such date.
"Relevant Trustee" shall have the meaning specified in Section 8.10.
"Remarketing" means the conduct by which a Fixed Rate shall be
determined in accordance with the Remarketing Procedures.
"Remarketing Agent" means Lehman Brothers Inc., its successors or
assigns, or such other remarketing agent appointed to such capacity by the
Company and the Regular Trustees.
"Remarketing Agreement" means the agreement among the Company, the
Trust and Lehman Brothers Inc., as remarketing agent, dated as of April 5, 2004.
"Remarketing Date" means any Business Day no later than the third
Business Day prior to any Remarketing Settlement Date.
"Remarketing Procedures" means those procedures set forth in Article X.
"Remarketing Settlement Date" means, to the extent applicable, (i) the
first Business Day of the next Distribution Period following the expiration of
the Initial Fixed Rate Period and any subsequent Fixed Rate Period; (ii) any
Distribution Payment Date during a Floating Rate Period; or (iii) any
Distribution Payment Date during a time in which Preferred Securities are
redeemable in a Fixed Rate Period subsequent to the Initial Fixed Rate Period.
9
"Regular Trustee" means each of the individuals identified as a
"Regular Trustee" in the preamble to this Declaration solely in their capacities
as Regular Trustees of the Trust formed and continued hereunder and not in their
individual capacities, or such trustee's successor(s) in interest in such
capacity, or any successor "Regular Trustee" appointed as herein provided.
"Securities Register" and "Securities Registrar" are described in
Section 5.04.
"Securityholder" or "Holder" means a Person in whose name a Trust
Security or Securities is registered in the Securities Register; and any such
Person who is a beneficial owner within the meaning of the Delaware Statutory
Trust Act.
"Sponsor" means Avista Corporation, in its capacity as "Sponsor" under
this Declaration.
"Subordinated Debt Securities" means the $61,856,000 aggregate
principal amount of the Sponsor's Subordinated Debt Securities, Series due 2034,
issued pursuant to the Subordinated Indenture.
"Subordinated Indenture" means the Indenture, dated as of April 1,
2004, between the Sponsor and the Indenture Trustee, as the same may be
modified, amended or supplemented in accordance with the applicable provisions
thereof.
"Telerate Page 3750" means the display designated on page 3750 on
MoneyLine Telerate (or such other page as may replace the 3750 page on the
service or such other service as may be nominated by the British Bankers'
Association for the purpose of displaying London interbank offered rates for
U.S. dollar deposits).
"Telerate Page 7051" means the display on MoneyLine Telerate (or any
successor service), on such page (or any other page as may replace such page on
that service), for the purpose of displaying Treasury Constant Maturities as
reported in H.15(519).
"10-year Treasury CMT" has the meaning set forth in Section 4.02(e).
"30-year Treasury CMT" has the meaning set forth in Section 4.02(e).
"3-month LIBOR Rate" has the meaning set forth in Section 4.02(e).
"Trust" means the Delaware statutory trust continued hereby and
identified on the cover page to this Declaration.
"Trustees" means the Persons identified as "Trustees" in the preamble
to this Declaration solely in their capacities as Trustees of the Trust and not
in their individual capacities, or their successor in interest in such capacity,
or any successor trustee appointed as herein provided.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
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"Trust Property" means (i) the Subordinated Debt Securities; (ii) any
cash on deposit in, or owing to, the Payment Account; and (iii) all proceeds and
rights in respect of the foregoing and any other property and assets for the
time being held or deemed to be held by the Institutional Trustee pursuant to
this Declaration.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.
"Trust Security" means any one of the Common Securities or the
Preferred Securities.
"Underwriting Agreement" means the Underwriting Agreement, dated March
29, 2004, among the Trust, the Sponsor and the underwriters named therein.
ARTICLE II
ESTABLISHMENT OF THE TRUST
SECTION 2.01 Name
The Trust continued hereby shall be known as "AVA Capital Trust III",
in which name the Trustees may conduct the business of the Trust, make and
execute contracts and other instruments on behalf of the Trust and sue and be
sued. The Regular Trustees may change the name of the Trust from time to time
following written notice to the Holders.
SECTION 2.02 Offices of the Trustees; Principal Place of Business
The address of the Institutional Trustee is 475 Sansome Street, 12th
Floor, San Francisco, California 94111, or at such other address as the
Institutional Trustee may designate by written notice to the Securityholders and
the Sponsor. The principal place of business of the Delaware Trustee is c/o
SunTrust Delaware Trust Company, 1011 Centre Road, Suite 108, Wilmington,
Delaware 19805, or at such other address in Delaware as the Delaware Trustee may
designate by notice to the Sponsor. The address of the Regular Trustees is c/o
Avista Corporation, 1411 East Mission Avenue, Spokane, Washington 99202,
Attention: Treasurer. The principal place of business of the Trust is c/o Avista
Corporation, 1411 East Mission Avenue, Spokane, Washington 99202. The Sponsor
may change the principal place of business of the Trust at any time by giving
notice thereof to the Trustees.
SECTION 2.03 Initial Contribution of Trust Property; Organizational
Expenses
The Trust received from the Sponsor in connection with the Original
Declaration of the sum of $10, which constituted the initial Trust Property. The
Sponsor, as obligor of the Subordinated Debt Securities, shall pay all costs and
expenses of the Trust as they arise (including, but not limited to, costs and
expenses relating to the organization of the Trust, issuance and sale of the
Preferred Securities, the fees and expenses (including reasonable counsel fees
and expenses) of the Trustees) or shall, upon request of the Trustees, promptly
reimburse the Trustees for any such expenses paid by the Trustees. The Sponsor
shall make no claim upon the Trust Property for the payment of such expenses.
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SECTION 2.04 Issuance of the Preferred Securities
The Regular Trustees, on behalf of the Trust, shall execute and deliver
to the underwriters named in the Underwriting Agreement Preferred Securities
Certificates, registered in the name of the nominee of the initial Clearing
Agency, in an aggregate amount of 60,000 Preferred Securities having an
aggregate Liquidation Amount of $60,000,000, against receipt of the aggregate
purchase price of such Preferred Securities of $60,000,000, which amount the
Regular Trustees shall promptly deliver to the Institutional Trustee.
SECTION 2.05 Subscription and Purchase of Subordinated Debt Securities;
Issuance of the Common Securities
The Regular Trustees, on behalf of the Trust, shall execute and deliver
to the Sponsor Common Securities Certificates, registered in the name of the
Sponsor, in an aggregate amount of 1,856 Common Securities having an aggregate
Liquidation Amount of $1,856,000 against payment by the Sponsor of such amount,
which amount shall be promptly delivered to the Institutional Trustee.
Contemporaneously therewith, the Regular Trustees, on behalf of the Trust, shall
subscribe to and purchase from the Sponsor Subordinated Debt Securities,
registered in the name of the Institutional Trustee, on behalf of the Trust and
the Holders, and having an aggregate principal amount equal to $61,856,000, and,
in satisfaction of the purchase price for such Subordinated Debt Securities, the
Institutional Trustee, on behalf of the Trust, shall deliver to the Sponsor the
sum of $61,856,000.
SECTION 2.06 Declaration of Trust
The exclusive purposes and functions of the Trust are (i) to issue and
sell the Trust Securities and use the proceeds from such sale to acquire the
Subordinated Debt Securities, (ii) to maintain its status as a grantor trust for
federal income tax purposes; (iii) to make Distributions, and (iv) to engage in
those activities necessary, incidental, appropriate or convenient thereto. The
Sponsor hereby confirms each of the Bank, the Delaware Bank, Malyn K. Malquist
and Diane C. Thoren as trustees of the Trust, to have all the rights, powers and
duties to the extent set forth herein. The Institutional Trustee hereby declares
that it will hold the Trust Property in trust upon and subject to the conditions
set forth herein for the benefit of the Trust and the Securityholders. The
Trustees shall have all rights, powers and duties set forth herein and in
accordance with applicable law with respect to accomplishing the purposes of the
Trust. 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
Institutional Trustee or the Regular Trustees set forth herein. The Delaware
Trustee shall be one of the Trustees for the sole and limited purpose of
fulfilling the requirements of the Delaware Statutory Trust Act.
SECTION 2.07 Authorization to Enter into Certain Transactions
The Trustees shall conduct the affairs of the Trust in accordance with
the terms of this Declaration. Subject to the limitations set forth in paragraph
(c) of this Section, and in accordance with the following paragraphs (a) and
(b), the Trustees shall have the authority to enter into all transactions and
agreements determined by the Trustees to be appropriate in exercising the
authority, express or implied, otherwise granted to the Trustees under this
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Declaration, and to perform all acts in furtherance thereof, including without
limitation, the following:
(a) As among the Trustees, the Regular Trustees, acting
singly or jointly, shall have the exclusive power, duty and authority to act on
behalf of the Trust with respect to the following matters:
(i) to acquire the Subordinated Debt Securities
with the proceeds of the sale of the Trust Securities;
provided, however, the Regular Trustees shall cause legal
title to all of the Subordinated Debt Securities to be vested
in, and the Subordinated Debt Securities to be held of record
in the name of, the Institutional Trustee for the benefit of
the Trust and Holders of the Trust Securities;
(ii) to give the Sponsor and the Institutional
Trustee prompt written notice of the occurrence of any Special
Event (as defined in the Subordinated Indenture) and to take
any ministerial actions in connection therewith; provided,
that the Regular Trustees shall consult with the Sponsor and
the Institutional Trustee before taking or refraining to take
any ministerial action in relation to a Special Event;
(iii) to establish a record date with respect to
all actions to be taken hereunder that require a record date
be established, including for the purposes of Section 316(c)
of the Trust Indenture Act and with respect to Distributions,
voting rights, redemptions, and exchanges, and to issue
relevant notices to Holders of the Trust Securities as to such
actions and applicable record dates;
(iv) to bring or defend, pay, collect,
compromise, arbitrate, resort to legal action, or otherwise
adjust claims or demands of or against the Trust ("Legal
Action"), unless pursuant to Section 2.07(b)(v), the
Institutional Trustee has the power to bring such Legal
Action;
(v) to employ or otherwise engage employees and
agents (who may be designated as officers with titles) and
managers, contractors, advisors, and consultants and pay
reasonable compensation for such services;
(vi) to cause the Trust to comply with the
Trust's obligations under the Trust Indenture Act;
(vii) to give the certificate to the Institutional
Trustee required by Section 314(a)(4) of the Trust Indenture
Act, which certificate may be executed by any Regular Trustee;
(viii) to take all actions and perform such duties
as may be required of the Regular Trustees pursuant to the
terms of this Declaration, the Remarketing Agreement and the
Calculation Agent Agreement;
(ix) to take all action that may be necessary or
appropriate for the preservation and the continuation of the
Trust's valid existence, rights, franchises
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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 Securities or to enable the Trust to
effect the purposes for which the Trust has been created;
(x) to take all action necessary to cause all
applicable tax returns and tax information reports that are
required to be filed with respect to the Trust to be duly
prepared and filed by the Regular Trustees, on behalf of the
Trust;
(xi) to execute and deliver the Trust Securities
on behalf of the Trust;
(xii) to cause the Trust to enter into, and to
execute, deliver and perform on behalf of the Trust, the
Remarketing Agreement, the Calculation Agent Agreement, the
Expense Agreement and the Certificate Depository Agreement and
such other agreements as may be necessary or desirable in
connection with the consummation hereof;
(xiii) to assist in the registration of the
Preferred Securities under the Securities Act of 1933, as
amended, and under state securities or blue sky laws, and the
qualification of this Declaration as a trust indenture under
the Trust Indenture Act;
(xiv) to assist in the listing of the Preferred
Securities upon such securities exchange or exchanges, if
necessary and as shall be determined by the Sponsor, and the
registration of the Preferred Securities under the Exchange
Act, and the preparation and filing of all periodic and other
reports and other documents pursuant to the foregoing;
(xv) to send notices (other than notices of
default) and other information regarding the Trust Securities
and the Subordinated Debt Securities to the Securityholders in
accordance with this Declaration, the Remarketing Agreement
and the Calculation Agent Agreement;
(xvi) to appoint a Paying Agent (subject to
Section 5.09), authenticating agent, Remarketing Agent,
Calculation Agent and Securities Registrar in accordance with
this Declaration;
(xvii) to elect to remarket the Preferred
Securities and determine the length of any Fixed Rate Period
in accordance with this Declaration, including redemption
dates applicable to any Fixed Rate Period;
(xviii) to register transfers of the Trust
Securities in accordance with this Declaration;
(xix) to assist in, to the extent provided in this
Declaration, the winding up of the affairs of and termination
of the Trust and the preparation, execution and filing of the
certificate of cancellation with the Secretary of State of the
State of Delaware; and
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(xx) to take any action incidental to the
foregoing as the Regular Trustees may from time to time
determine is necessary, appropriate, convenient or advisable
to protect and conserve the Trust Property for the benefit of
the Securityholders (without consideration of the effect of
any such action on any particular Securityholder).
(b) As among the Trustees, the Institutional Trustee
shall have the exclusive power, duty and authority to act on behalf of the Trust
with respect to the following matters:
(i) engage in such ministerial activities as
shall be necessary or appropriate to effect promptly the
redemption of the Trust Securities to the extent the
Subordinated Debt Securities are redeemed, mature or otherwise
repaid;
(ii) upon a distribution of Subordinated Debt
Securities in accordance with the terms of this Declaration,
engage in such ministerial activities as shall be necessary or
appropriate to effect promptly the distribution of
Subordinated Debt Securities to Holders of Trust Securities
pursuant to the terms of this Declaration;
(iii) subject to the terms hereof, exercise all of
the rights, powers and privileges of a holder of the
Subordinated Debt Securities under the Subordinated Indenture
and, if an Event of Default occurs and is continuing, shall
enforce for the benefit of, and subject to the rights of, the
Holders of the Trust Securities, its rights as holder of the
Subordinated Debt Securities under the Subordinated Indenture;
(iv) take all actions and perform such duties as
may be specifically required of the Institutional Trustee
pursuant to the terms of this Declaration;
(v) take any Legal Action specifically required
of the Institutional Trustee pursuant to the terms of this
Declaration which arises out of or in connection with an Event
of Default or the Institutional Trustee's duties and
obligations under this Declaration, the Delaware Statutory
Trust Act or the Trust Indenture Act;
(vi) the establishment and maintenance of the
Payment Account;
(vii) the receipt of and holding of legal title to
the Subordinated Debt Securities as described herein;
(viii) the collection of interest, principal and
any other payments made in respect of the Subordinated Debt
Securities in the Payment Account;
(ix) the distribution of amounts owed to the
Securityholders in respect of the Trust Securities;
(x) the sending of notices of default and other
information regarding the Trust Securities and the
Subordinated Debt Securities to the Securityholders in
accordance with this Declaration;
15
(xi) the distribution of the Trust Property in
accordance with the terms of this Declaration;
(xii) as provided in this Declaration, the winding
up of the affairs of and termination of the Trust; and
(xiii) the taking of any action incidental to the
foregoing as the Institutional Trustee may from time to time
determine is necessary, appropriate, convenient or advisable
to protect and conserve the Trust Property for the benefit of
the Securityholders (without consideration of the effect of
any such action on any particular Securityholder).
(c) So long as this Declaration remains in effect, the
Trust (or the Trustees acting on behalf of the Trust) shall not undertake any
business, activities or transaction except as expressly provided herein or
contemplated hereby. In particular, the Trustees shall not (i) acquire any
investments or engage in any activities not authorized by this Declaration; (ii)
sell, assign, transfer, exchange, pledge, set-off or otherwise dispose of any of
the Trust Property or interests therein, including to Securityholders, except as
expressly provided herein; (iii) take any action that would cause the Trust to
fail or cease to qualify as a grantor trust for United States federal income tax
purposes; (iv) incur any indebtedness for borrowed money; (v) take or consent to
any action that would result in the placement of a Lien on any of the Trust
Property; (vi) issue any securities other than the Trust Securities; or (vii)
have any power to, or agree to any action by the Sponsor that would, vary the
investment (within the meaning of Treasury Regulation Section 301.7701-4(c)) of
the Trust or of the Securityholders. The Trustees shall defend all claims and
demands of all Persons at any time claiming any Lien on any of the Trust
Property adverse to the interest of the Trust or the Securityholders in their
capacity as Securityholders.
(d) In connection with the issue and sale of the
Preferred Securities, the Sponsor, as obligor of the Subordinated Debt
Securities, shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Sponsor in furtherance of the following prior to the date of this
Declaration are hereby ratified and confirmed in all respects):
(i) to prepare for filing by the Trust with the
Commission, and execute on behalf of the Trust, a registration
statement on Form S-3 under the Securities Act of 1933, as
amended, in relation to the Preferred Securities, including
any amendments thereto;
(ii) to determine the states in which to take
appropriate action to qualify or register for sale all or part
of the Preferred Securities and to do any and all such acts,
other than actions which must be taken by or on behalf of the
Trust, and advise the Trustees of actions they must take on
behalf of the Trust, and prepare for execution and filing any
documents to be executed and filed by the Trust or on behalf
of the Trust, as the Sponsor deems necessary or advisable in
order to comply with the applicable laws of any such States;
16
(iii) to prepare for filing by the Trust, and
execute on behalf of the Trust, an application to the New York
Stock Exchange or any other national stock exchange or the
Nasdaq National Market for listing upon notice of issuance of
any Preferred Securities, if applicable;
(iv) to prepare for filing by the Trust, and
execute on behalf of the Trust, with the Commission a
registration statement on Form 8-A relating to the
registration of the Preferred Securities under Section 12(g)
of the Exchange Act, including any amendments thereto, if
applicable;
(v) to negotiate the terms of, and execute on
behalf of the Trust, the Underwriting Agreement providing for
the sale of the Preferred Securities and to execute, deliver
and perform the Underwriting Agreement on behalf of the Trust;
(vi) to negotiate the terms of, on behalf of the
Trust, the Remarketing Agreement providing for the retention
of the Remarketing Agent and the establishment of certain
procedures relating to Remarketings;
(vii) to negotiate the terms of, on behalf of the
Trust, the Calculation Agent Agreement providing for the
retention of the Calculation Agent;
(viii) to elect to remarket the Preferred
Securities and determine the length of any Fixed Rate Period
in accordance with this Declaration, including redemption
dates applicable to any Fixed Rate Period; and
(ix) to take any other actions necessary,
incidental, appropriate or convenient to carry out any of the
foregoing activities.
(e) Notwithstanding anything herein to the contrary, the
Regular Trustees are authorized and directed to conduct the affairs of the Trust
and to operate the Trust so that the Trust will not be deemed to be an
"investment company" required to be registered under the Investment Company Act
of 1940, as amended, or taxed as other than a grantor trust for United States
federal income tax purposes and so that the Subordinated Debt Securities will be
treated as indebtedness of the Sponsor for United States federal income tax
purposes. In this connection, the Sponsor and the Regular Trustees are
authorized to take any action, not inconsistent with applicable law, the
Certificate of Trust or this Declaration, that each of the Sponsor and the
Regular Trustees determines in its discretion to be necessary or desirable for
such purposes, as long as such action does not materially and adversely affect
the interests of the Holders of the Preferred Securities.
SECTION 2.08. Assets of Trust
The assets of the Trust shall consist of the Trust Property.
SECTION 2.09. Title to Trust Property
Legal title to all Trust Property shall be vested at all times in the
Institutional Trustee (in its capacity as such) and shall be held and
administered by the Institutional Trustee for the
17
benefit of the Securityholders and the Trust in accordance with this
Declaration. The right, title and interest of the Institutional Trustee to the
Subordinated Debt Securities shall vest automatically in each Person who may
thereafter be appointed as Institutional Trustee in accordance with the terms
hereof. Such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered.
SECTION 2.10. Mergers and Consolidations of the Trust
The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any entity, except pursuant to this Section
2.10 or Section 9.04. Upon the approval of the Holders of the Common Securities,
and without the consent of the Holders of the Preferred Securities or the
Trustees, the Trust may merge with or into, consolidate, amalgamate, or be
replaced by or convey, transfer or lease its properties and assets substantially
as an entirety to a trust organized as such under the laws of any state;
provided, however, that (i) such successor entity either (a) expressly assumes
all of the obligations of the Trust with respect to the Preferred Securities or
(b) substitutes for the Preferred Securities other securities having
substantially the same terms as the Preferred Securities (the "Successor
Preferred Securities") so long as the Successor Preferred Securities have the
same priority as the Preferred Securities with respect to distributions and
payments upon liquidation, redemption and otherwise; (ii) a trustee of such
successor entity possessing the same powers and duties as the Institutional
Trustee is appointed to hold the Subordinated Debt Securities; (iii) such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not cause the Preferred Securities (including any Successor Preferred
Securities) to be downgraded by any nationally recognized statistical rating
organization; (iv) the Preferred Securities or any Successor Preferred
Securities are listed or quoted, or any Successor Preferred Securities will be
listed or quoted upon notification of issuance, on any national securities
exchange or with another organization on which Preferred Securities are then
listed or quoted; (v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Preferred Securities (including any
Successor Preferred Securities) in any material respect; (vi) such successor
entity has a purpose substantially identical to that of the Trust; (vii) prior
to such merger, consolidation, amalgamation, replacement, conveyance, transfer
or lease, the Institutional Trustee has received an Opinion of Counsel from
independent counsel experienced in such matters to the effect that (a) such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not adversely affect the rights, preferences and privileges of the holders
of the Preferred Securities (including any Successor Preferred Securities) in
any material respect, and (b) following such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, neither the Trust nor
such successor entity will be required to register as an "investment company"
under the Investment Company Act; and (viii) the Sponsor or any permitted
transferee to whom it has transferred the Common Securities hereunder owns all
of the common securities of such successor entity and guarantees the obligations
of such successor entity under the Successor Preferred Securities at least to
the extent provided by the Guarantee. Notwithstanding the foregoing, the Trust
shall not, except with the consent of Holders of 100% in aggregate Liquidation
Amount of the Preferred Securities, consolidate, amalgamate, merge with or into,
or be replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to, any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger,
18
replacement, conveyance, transfer or lease would cause the Trust or the
successor entity to be taxable other than as a grantor trust for United States
federal income tax purposes. Any merger or similar agreement shall be executed
by the Regular Trustees on behalf of the Trust.
ARTICLE III
PAYMENT ACCOUNT
SECTION 3.01. Payment Account
(a) On or prior to the Issue Date, the Institutional
Trustee shall establish the Payment Account. The Institutional Trustee and an
agent of the Institutional Trustee shall have exclusive control and sole right
of withdrawal with respect to the Payment Account for the purpose of making
deposits in and withdrawals from the Payment Account in accordance with this
Declaration. All monies and other property deposited or held from time to time
in the Payment Account shall be held by the Institutional Trustee in the Payment
Account for the exclusive benefit of the Securityholders and for distribution as
herein provided, including (and subject to) any priority of payments provided
for herein.
(b) The Institutional Trustee shall deposit in the
Payment Account, promptly upon receipt, all payments of principal or interest
on, and any other payments or proceeds with respect to, the Subordinated Debt
Securities and any amounts paid to the Institutional Trustee pursuant to the
Guarantee. Amounts held in the Payment Account shall not be invested by the
Institutional Trustee pending distribution thereof.
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
SECTION 4.01. Distributions
(a) Distributions shall accrue from the Issue Date until
the Redemption Date. During the Initial Fixed Rate Period, Distributions will be
payable semiannually in arrears on April 1 and October 1 of each year,
commencing on October 1, 2004. During any Fixed Rate Period, other than the
Initial Fixed Rate Period, Distributions will be payable semiannually in arrears
on the first day of the first month that begins at least six months after the
first day of the Fixed Rate Period and on the first day of each six month period
thereafter during such Fixed Rate Period. Any Fixed Rate Period may not end on a
day other than a day immediately preceding a Distribution Payment Date. During
any Floating Rate Period, Distributions will be payable quarterly in arrears on
January 1, April 1, July 1 and October 1 of each year.
(b) If any Distribution Payment Date with respect to a
Fixed Rate Period is not a Business Day, Distributions will be payable, without
interest, on the immediately succeeding Business Day, with the same force and
effect as if payment was made on the date such payment was originally payable
(and without the accrual of any additional amount of Distributions). If any
Distribution Payment Date with respect to a Floating Rate Period is not a
Business Day, then Distributions will be payable on the immediately succeeding
Business Day
19
and Distributions shall accrue to the actual payment date (except for a
Distribution Payment Date that coincides with the Redemption Date).
(c) The amount of Distributions payable on each
Distribution Payment Date relating to a Fixed Rate Period will be computed on
the basis of a 360-day year of twelve 30-day months. The amount of Distributions
payable on each Distribution Payment Date relating to a Floating Rate Period
will be computed by multiplying the per annum Distribution Rate in effect for
such Distribution Period by a fraction, the numerator of which will be the
actual number of days in such Distribution Period (or portion thereof)
(determined by including the first day thereof and excluding the last thereof)
and the denominator of which will be 360, and multiplying the rate so obtained
by $1,000.
(d) The Company has the right under the Subordinated
Indenture to defer payments of interest on the Subordinated Debt Securities by
extending the interest period from time to time on the Subordinated Debt
Securities (an "Extension Period") which, if exercised, would defer
Distributions on the Trust Securities during any Extension Period. The payment
of such Distributions, together with any interest thereon, will be distributed
to the Holders of Trust Securities as received at the end of any Extension
Period.
(e) Distributions on the Trust Securities shall be made
and shall be deemed payable on each Distribution Payment Date only to the extent
that the Trust has available funds on hand in the Payment Account for the
payment of such Distributions.
(f) Distributions on the Trust Securities on each
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities on the relevant Record Date.
Each Trust Security upon registration of transfer of or in exchange for
or in lieu of any other Trust Security shall carry the rights of Distributions
accrued and unpaid, and to accrue, which were carried by such other Trust
Security.
SECTION 4.02. Distribution Rate
(a) During the Initial Fixed Rate Period, the
Distribution Rate shall be the Initial Distribution Rate.
(b) Prior to the expiration of the Initial Fixed Rate
Period and any subsequent Fixed Rate Period, prior to any Distribution Payment
Date with respect to a Floating Rate Period or prior to any Distribution Payment
Date in a Fixed Rate Period during a time in which the Preferred Securities are
redeemable in such Fixed Rate Period, the Company and the Regular Trustees will
have the option to remarket the Preferred Securities to establish a new Fixed
Rate for a new Fixed Rate Period (to be in effect after the expiration of the
then current Distribution Period). If the Company and the Regular Trustees elect
to conduct a Remarketing of the Preferred Securities for the purpose of
establishing a new Fixed Rate for a new Fixed Rate Period, the Trust shall, not
less than 20 nor more than 35 Business Days prior to the related Election Date,
notify in writing the Clearing Agency, the Institutional Trustee, the Indenture
Trustee, the Calculation Agent and the Remarketing Agent. If the Preferred
Securities are not
20
issued in global, fully registered form to the Clearing Agency or its nominee,
such notice shall be delivered to the Owners instead of the Clearing Agency.
Such notice shall describe the Remarketing and shall indicate the length of the
proposed new Fixed Rate Period, the proposed Remarketing Date and any redemption
provisions that will apply during such new Fixed Rate Period. The Company and
the Regular Trustees shall have the right to terminate a Remarketing at any time
prior to the Election Date by written notice of such termination to the Clearing
Agency (or the Owners, as applicable), the Remarketing Agent, the Institutional
Trustee, the Indenture Trustee and the Calculation Agent.
(c) If the Remarketing Agent has determined that it will
be able to remarket all Preferred Securities tendered or deemed tendered for
purchase in the Remarketing at a Fixed Rate and at a price of $1,000 per
Preferred Security, on any Remarketing Date, the Distribution Rate for the new
Fixed Rate Period will be the Fixed Rate determined by the Remarketing Agent,
which will be the rate per annum (rounded to the nearest one-thousandth (0.001)
of one percent per annum) which the Remarketing Agent determines, in its sole
judgment, to be the lowest Fixed Rate per annum that will enable it to remarket
all Preferred Securities tendered or deemed tendered for Remarketing at a price
of $1,000 per Preferred Security.
(d) If the Company and the Regular Trustees do not elect
to remarket the Preferred Securities pursuant to Section 4.02(b) or have
terminated a Remarketing or if the Remarketing Agent is unable to remarket all
of the Preferred Securities tendered or deemed tendered for a purchase price of
$1,000 per Preferred Security pursuant to the Remarketing Procedures, the
Distribution Rate for the next Distribution Period shall be the Floating Rate
and the new Distribution Period shall be a Floating Rate Period.
(e) The Calculation Agent shall calculate the Floating
Rate on the Floating Rate Determination Date as follows:
Except as provided below, the Floating Rate for any Floating Rate
Period for the Preferred Securities will be equal to the Adjustable Rate (as
defined below) plus 3.66%. The "Adjustable Rate" for any Distribution Period
will be equal to the highest of the 3-month LIBOR Rate, the 10-year Treasury CMT
and the 30-year Treasury CMT (each as defined below and collectively referred to
as the "Benchmark Rates") for such Distribution Period during the Floating Rate
Period. In the event that the Calculation Agent determines in good faith that
for any reason:
(1) any one of the Benchmark Rates
cannot be determined for any
Distribution Period, the Adjustable
Rate for such Distribution Period
will be equal to the higher of
whichever two of such rates can be
so determined;
(2) only one of the Benchmark Rates can
be determined for any Distribution
Period, the Adjustable Rate for
such Distribution Period will be
equal to whichever such rate can be
so determined; or
21
(3) none of the Benchmark Rates can be
determined for any Distribution
Period, the Adjustable Rate for the
preceding Distribution Period will
be continued for such Distribution
Period.
The "3-month LIBOR Rate" means, for each Distribution Period, the
arithmetic average of the two most recent weekly quotes for deposits for U.S.
Dollars having a term of three months, as published on the first Business Day of
each week immediately preceding the Distribution Period for which the Floating
Rate is being determined. Such quotes will be taken from Telerate Page 3750 at
approximately 11:00 a.m. London time on the relevant date. If such rate does not
appear on Telerate Page 3750 on the Floating Rate Determination Date, the
3-month LIBOR Rate will be the arithmetic mean of the rates quoted by three
major banks in New York City selected by the Calculation Agent, at approximately
11:00 a.m., New York City time, on the Floating Rate Determination Date for
loans in U.S. Dollars to leading European banks for a period of three months.
"The 10-year Treasury CMT" means the rate determined in accordance with
the following provisions:
(1) With respect to any Floating Rate
Determination Date and the Distribution Period that begins immediately
thereafter, the 10-year Treasury CMT means the rate displayed on
Telerate Page 7051 under the caption "...Treasury Constant
Maturities... Federal Reserve Board Release H.15...Mondays
Approximately 3:45 P.M.", under the column for the Designated CMT
Maturity Index (as defined below).
(2) If such rate is no longer displayed
on the relevant page, or is not so
displayed by 3:00 P.M., New York
City time, on the applicable
Floating Rate Determination Date,
then the 10-year Treasury CMT for
such Floating Rate Determination
Date will be such treasury constant
maturity rate for the Designated
CMT Maturity Index as is published
in H.15(519).
(3) If such rate is no longer displayed
on the relevant page, or if not
published by 3:00 P.M., New York
City time, on the applicable
Floating Rate Determination Date,
then the 10-year Treasury CMT for
such Floating Rate Determination
Date will be such constant maturity
treasury rate for the Designated
CMT Maturity Index (or other United
States Treasury rate for the
Designated CMT Maturity Index) for
the applicable Floating Rate
Determination Date with respect to
such Distribution reset date as may
then be published by either the
Board of Governors of the Federal
Reserve System or the United States
Department of the Treasury that the
Calculation Agent determines to be
comparable to the rate formerly
displayed on the Telerate Page 7051
and published in H.15(519).
22
(4) If such information is not provided
by 3:00 P.M., New York City time,
on the applicable Floating Rate
Determination Date, then the
10-year Treasury CMT for such
Floating Rate Determination Date
will be calculated by the
Calculation Agent and will be a
yield to maturity, based on the
arithmetic mean of the secondary
market offered rates as of
approximately 3:30 P.M., New York
City time, on such Floating Rate
Determination Date reported,
according to their written records,
by three leading primary United
States government securities
dealers in The City of New York
(each, a "Reference Dealer")
selected by the Calculation Agent
(from five such Reference Dealers
selected by the Calculation Agent
and eliminating the highest
quotation (or, in the event of
equality, one of the highest) and
the lowest quotation (or, in the
event of equality, one of the
lowest)), for the most recently
issued direct noncallable fixed
rate obligations of the United
States ("Treasury Debentures") with
an original maturity of
approximately the Designated CMT
Maturity Index and a remaining term
to maturity of not less than such
Designated CMT Maturity Index minus
one year.
(5) If the Calculation Agent is unable
to obtain three such Treasury
Debentures quotations, the 10-year
Treasury CMT for the applicable
Floating Rate Determination Date
will be calculated by the
Calculation Agent and will be a
yield to maturity based on the
arithmetic mean of the secondary
market offered rates as of
approximately 3:30 P.M., New York
City time, on the applicable
Floating Rate Determination Date of
three Reference Dealers in The City
of New York (from five such
Reference Dealers selected by the
Calculation Agent and eliminating
the highest quotation (or, in the
event of equality, one of the
highest) and the lowest quotation
(or, in the event of equality, one
of the lowest)), for Treasury
Debentures with an original
maturity of the number of years
that is the next highest to the
Designated CMT Maturity Index and a
remaining term to maturity closest
to the Designated CMT Maturity
Index and in an amount of at least
$100 million.
(6) If three or four (and not five) of
such Reference Dealers are quoting
as set forth above, then the
10-year Treasury CMT will be based
on the arithmetic mean of the
offered rates obtained and neither
the highest nor lowest of such
quotes will be eliminated;
provided, however, that if fewer
than three Reference Dealers
selected by the Calculation Agent
are quoting as set forth above, the
10-year Treasury CMT
23
with respect to the applicable
Floating Rate Determination Date
will remain the 10-year Treasury
CMT for the immediately preceding
interest period. If two Treasury
Debentures with an original
maturity as described in the second
preceding sentence have remaining
terms to maturity equally close to
the Designated CMT Maturity Index,
then the quotes for the Treasury
Debentures with the shorter
remaining term to maturity will be
used.
The "30-year Treasury CMT" has the meaning specified under the
definition of 10-year Treasury CMT, except that the Designated CMT Maturity
Index for the 30-year Treasury CMT shall be 30 years.
The 3-month LIBOR Rate, the 10-year Treasury CMT and the 30-year
Treasury CMT shall each be rounded to the nearest hundredth of a percent.
The Floating Rate with respect to each Floating Rate Period will be
calculated as promptly as practicable by the Calculation Agent according to the
appropriate method described above.
(f) If the Company elects to defer interest during a
Fixed Rate Period, Distributions will continue to accrue and be compounded
semiannually at the Fixed Rate until the expiration of the Fixed Rate Period.
Prior to the expiration of such Fixed Rate Period and any subsequent Fixed Rate
Period during the Extension Period, the Company and the Regular Trustees will
have the option to remarket the Preferred Securities for a new Fixed Rate Period
(to take effect upon expiration of such Fixed Rate Period). If the Company and
the Trust do not remarket the Preferred Securities, the Floating Rate during the
Extension Period shall be determined as provided herein, but shall not be less
than the Fixed Rate for the Fixed Rate Period just ended. If the Company elects
to defer interest during a Floating Rate Period, Distributions will continue to
accrue and be compounded quarterly at the applicable Floating Rate, reset
quarterly, subject to the right of the Company and the Regular Trustees to
remarket the Preferred Securities prior to any Distribution Payment Date in
order to establish a new Fixed Rate for a new Fixed Rate Period in accordance
with this Section 4.02 and the Remarketing Procedures.
SECTION 4.03. Distribution Periods
In accordance with Section 4.02 and the Remarketing Procedures, the
Company and the Regular Trustees, on behalf of the Trust may, prior to the
expiration of the Initial Fixed Rate Period and any subsequent Fixed Rate
Period, prior to any Distribution Payment Date in a Fixed Rate Period during a
time in which the Preferred Securities are redeemable in such Fixed Rate Period
or prior to any Distribution Payment Date with respect to a Floating Rate
Period, elect to remarket the Preferred Securities to establish a new Fixed Rate
for a new Fixed Rate Period (to be in effect after the then current Distribution
Period). A Fixed Rate Period must be for a duration of at least six months, may
not extend beyond the stated maturity of the Subordinated Debt Securities and
may not end on a day other than a day immediately preceding a Distribution
Payment Date. If a new Fixed Rate for a new Fixed Rate Period is set in a
Remarketing, a new Fixed Rate Period shall commence following the expiration of
the then current Distribution
24
Period. If a new Fixed Rate for a new Fixed Rate Period is not set, for any
reason, including after the expiration of the Initial Fixed Rate Period, in
accordance with the terms of this Declaration, a Floating Rate Period and the
Floating Rate reset quarterly shall be in effect if and until the Company and
the Regular Trustees remarket the Preferred Securities and set a new Fixed Rate
for a new Fixed Rate Period in accordance with Section 4.02 and the Remarketing
Procedures.
SECTION 4.04. Redemption
(a) On each Indenture Redemption Date and the Maturity
Date of the Subordinated Debt Securities, the Trust will be required to redeem a
Like Amount of Trust Securities at the Redemption Price.
(b) Notice of redemption shall be given by the
Institutional Trustee by first class mail, postage prepaid, mailed not less than
30 nor more than 60 days prior to the Redemption Date to each Holder of Trust
Securities to be redeemed, at such Holder's address appearing in the Securities
Register. All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number or CUSIP numbers of the
Preferred Securities affected;
(iv) that on the Redemption Date the Redemption
Price will become due and payable, to the extent set forth in
Section 4.04(d) below, upon each such Trust Security to be
redeemed and that Distributions thereon will cease to
accumulate on and after said date, except as provided in
Section 4.04(e) below; and
(v) the place or places where Trust Securities
are to be surrendered for the payment of the Redemption Price.
If the notice of the related redemption of Subordinated Debt Securities
states that such redemption of Subordinated Debt Securities is conditional upon
the receipt by the paying agent or agents of money sufficient to pay the
redemption price on such Subordinated Debt Securities as provided in Section 404
of the Subordinated Indenture, then the notice of redemption of the Trust
Securities shall refer to such condition and the effect thereof.
(c) The Trust in issuing the Trust Securities may use
"CUSIP" or "private placement" numbers (if then generally in use), and, if so,
the Institutional Trustee shall indicate the "CUSIP" or "private placement"
numbers of the Trust Securities in notices of redemption and related materials
as a convenience to Holders; provided, that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Trust Securities or as contained in any notice of redemption and related
material.
25
(d) The Trust Securities redeemed on each Redemption Date
shall be redeemed at the Redemption Price with the applicable proceeds from the
contemporaneous redemption or repayment of Subordinated Debt Securities.
Redemptions of the Trust Securities shall be made and the Redemption Price shall
be due and payable on each Redemption Date to the extent, but only to the
extent, that the Trust has funds then on hand and available in the Payment
Account for the payment of such Redemption Price.
(e) If the Trust gives a notice of redemption in respect
of any Preferred Securities, then by 2:00 P.M., New York City time, on the
Redemption Date, subject to Section 4.04(d) above and this Section 4.04(e), the
Institutional Trustee will, with respect to Preferred Securities held in global
form, irrevocably deposit with the Clearing Agency for such Preferred
Securities, to the extent available therefor, funds sufficient to pay the
applicable Redemption Price and will give such Clearing Agency irrevocable
instructions and authority to pay the Redemption Price to the Holders of the
Preferred Securities. With respect to Preferred Securities that are not held in
global form, the Institutional Trustee, subject to Section 4.04(d) above and
this Section 4.04(e), will irrevocably deposit with the Paying Agent, to the
extent available therefor, funds sufficient to pay the applicable Redemption
Price and will give the Paying Agent irrevocable instructions and authority to
pay the Redemption Price to the Holders of the Preferred Securities upon
surrender of their Preferred Securities Certificates. Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date for any
Trust Securities called for redemption shall be payable to the Holders of such
Trust Securities as they appear on the Securities Register for the Trust
Securities on the relevant Record Dates for the related Distribution Dates. If
notice of redemption shall have been given (or if the Sponsor has given
irrevocable instructions to the Institutional Trustee to give notice of
redemption) and funds deposited as required, then, upon the date of such
deposit, all rights of Holders holding Trust Securities so called for redemption
will cease, except the right of such Holders to receive the Redemption Price and
any Distribution payable in respect of the Trust Securities on or prior to the
Redemption Date, but without interest, and such Trust Securities will cease to
be Outstanding. In the event that any date on which any applicable Redemption
Price is payable is not a Business Day, then payment of the applicable
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day 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. In the event
that payment of the Redemption Price in respect of any Trust Securities called
for redemption is improperly withheld or refused and not paid either by the
Trust or by the Sponsor pursuant to the Guarantee, Distributions on such Trust
Securities will continue to accumulate, as set forth in Section 4.01 and in
accordance with the continued accrual of interest on the Subordinated Debt
Securities, from the Redemption Date originally established by the Trust for
such Trust Securities to the date such applicable Redemption Price is actually
paid, in which case the actual payment date will be the date fixed for
redemption for purposes of calculating the applicable Redemption Price.
SECTION 4.05. Subordination of Common Securities and Distributions
(a) Payment of Distributions on, and the Redemption Price
of, the Trust Securities, as applicable, shall be made pro rata based on the
Liquidation Amount of the Trust
26
Securities; provided, however, that if on any Distribution Payment Date or
Redemption Date an Indenture Event of Default shall have occurred and be
continuing, no payment of any Distribution on, or Redemption Price of, any
Common Security, and no other payment on account of the redemption, liquidation
or other acquisition of Common Securities, shall be made unless payment in full
in cash of all accumulated and unpaid Distributions on all Outstanding Preferred
Securities for all Distribution Periods terminating on or prior thereto, or in
the case of payment of the Redemption Price the full amount of such Redemption
Price on all Outstanding Preferred Securities, shall have been made or provided
for, and all funds immediately available to the Institutional Trustee shall
first be applied to the payment in full in cash of all Distributions on, or
Redemption Price of, Preferred Securities then due and payable.
(b) In the case of the occurrence of any Indenture Event
of Default, the Holder of Common Securities will be deemed to have waived any
right to act with respect to such Event of Default under this Declaration until
the effect of all such Events of Default with respect to the Preferred
Securities have been cured, waived or otherwise eliminated. Until any such
Events of Default under this Declaration with respect to the Preferred
Securities have been so cured, waived or otherwise eliminated, the Institutional
Trustee shall act solely on behalf of the Holders of the Preferred Securities
and not the Holder of the Common Securities, and only the Holders of the
Preferred Securities will have the right to direct the Institutional Trustee to
act on their behalf.
(c) Distributions on the Common Securities shall be
payable at the same Distribution Rates, on the same Distribution Payment Dates
and for the same Distribution Periods and to holders as of the same Record Date
as for the Preferred Securities.
SECTION 4.06. Payment Procedures
Payments of Distributions in respect of the Preferred Securities shall
be made by check mailed to the address of the Person entitled thereto as such
address shall appear on the Securities Register or, if the Preferred Securities
are held by a Clearing Agency, such Distributions shall be made to the Clearing
Agency, which shall credit the relevant Persons' accounts at such Clearing
Agency on the applicable Distribution Payment Dates. Payment of the Redemption
Price of or Liquidation Distribution on the Preferred Securities shall be made
in immediately available funds upon surrender of the Preferred Securities
Certificates representing such Preferred Securities at the corporate trust
office of the Institutional Trustee in Los Angeles, California, or, if the
Preferred Securities are held by the Clearing Agency or its nominee, such
Redemption Price or Liquidation Distribution shall be made to the Clearing
Agency by wire transfer in immediately available funds. Payments in respect of
the Common Securities shall be made in such manner as shall be mutually agreed
between the Institutional Trustee and the Holder of the Common Securities.
SECTION 4.07. Tax Returns and Reports
The Regular Trustee(s) shall prepare (or cause to be prepared), at the
Sponsor's expense, and file all United States federal, state and local tax and
information returns and reports required to be filed by or in respect of the
Trust. The Regular Trustee(s) shall provide or cause to be
27
provided on a timely basis to each Holder any Internal Revenue Service form
required to be so provided in respect of the Trust Securities.
SECTION 4.08. Exchange
(a) If at any time the Sponsor or any of its Affiliates
(in either case, a "Sponsor Affiliated Owner/Holder") is the Owner or Holder of
any Preferred Securities, such Sponsor Affiliated Owner/Holder shall have the
right to deliver to the Institutional Trustee all or such portion of its
Preferred Securities as it elects and receive, in exchange therefore, a like
amount of Subordinated Debt Securities. Such election (i) shall be exercisable
effective on any Distribution Payment Date by such Sponsor Affiliated
Owner/Holder delivering to the Institutional Trustee a written notice of such
election specifying the liquidation amount of Preferred Securities with respect
to which such election is being made and the Distribution Payment Date on which
such exchange shall occur, which Distribution Payment Date shall be not less
than ten Business Days after the date of receipt by the Institutional Trustee or
its designee the Preferred Securities which are the subject of such election by
1:00 P.M. New York time, on the Distribution Payment Date on which such exchange
is to occur. After the exchange, such Preferred Securities will be canceled and
will no longer be deemed to be outstanding and all rights of the Sponsor or its
Affiliate(s) with respect to such Preferred Securities will cease.
(b) In the case of an exchange described in Section
4.08(a), the Trust will, on the date of such exchange, exchange Subordinated
Debt Securities having a principal amount equal to the aggregate liquidation
amount of the outstanding Common Securities, multiplied by the ratio of the
aggregate liquidation amount of the Preferred Securities exchanged pursuant to
Section 4.08(a) divided by the aggregate liquidation amount of the Preferred
Securities outstanding immediately prior to such exchange, for such proportional
amount of Common Securities held by the Sponsor (which contemporaneously shall
be canceled and no longer be deemed to be outstanding); provided, that the
Sponsor delivers or caused to be delivered to the Institutional Trustee or its
designee the required amount of Common Securities to be exchanged by 1:00 P.M.
New York time, on the Distribution Payment Date on which such exchange is to
occur.
ARTICLE V
TRUST SECURITIES CERTIFICATES
SECTION 5.01. Initial Ownership
Upon the creation of the Trust by the contribution by the Sponsor
pursuant to Section 2.03 and until the issuance of the Trust Securities, and at
any time during which no Trust Securities are outstanding, the Sponsor shall be
the sole beneficial owner of the Trust.
28
SECTION 5.02. The Trust Securities Certificates
Each of the Preferred and Common Securities Certificates shall be
issued in minimum denominations of $1,000 and integral multiples in excess
thereof. The Trust Securities Certificates shall be executed on behalf of the
Trust by manual or facsimile signature of at least one Regular Trustee. Trust
Securities Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures shall have been affixed,
authorized to sign on behalf of the Trust, shall be validly issued and entitled
to the benefits of this Declaration, notwithstanding that such individuals or
any of them shall have ceased to be so authorized prior to the authentication
and delivery of such Trust Securities Certificates or did not hold such offices
at the date of authentication and delivery of such Trust Securities
Certificates. A transferee of a Trust Securities Certificate shall become a
Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Section 5.04.
SECTION 5.03. Authentication of Trust Securities Certificates
On the Issue Date, the Regular Trustees shall cause Trust Securities
Certificates, in an aggregate Liquidation Amount as provided in Sections 2.04
and 2.05, to be executed on behalf of the Trust, authenticated and delivered to
or upon the written order of the Sponsor signed by its Chairman of the Board,
its President or any Vice President, without further corporate action by the
Sponsor, in authorized denominations. No Trust Securities Certificate shall
entitle its holder to any benefit under this Declaration, or shall be valid for
any purpose, unless there shall appear on such Trust Securities Certificate a
certificate of authentication substantially in the form set forth in Exhibit A
or Exhibit C, as applicable, executed by the Institutional Trustee by manual
signature; such authentication shall constitute conclusive evidence that such
Trust Securities Certificate shall have been duly authenticated and delivered
hereunder. All Trust Securities Certificates shall be dated the date of their
authentication.
SECTION 5.04. Registration of Transfer and Exchange of Preferred
Securities Certificates
The Securities Registrar shall keep or cause to be kept, at the office
or agency maintained pursuant to Section 5.08, a Securities Register in which,
subject to such reasonable regulations as it may prescribe, the Securities
Registrar shall provide for the registration of Preferred Securities
Certificates and the Common Securities Certificates (subject to Section 5.10 in
the case of the Common Securities Certificates) and registration of transfers
and exchanges of Preferred Securities Certificates as herein provided. The
Institutional Trustee shall be the initial Securities Registrar.
Upon surrender for registration of transfer of any Preferred Securities
Certificate at the office or agency maintained pursuant to Section 5.08, one or
more of the Regular Trustees shall execute, and the Institutional Trustee shall
authenticate and deliver in the name of the designated transferee or transferees
one or more new Preferred Securities Certificates in authorized denominations of
a like aggregate Liquidation Amount dated the date of authentication by the
Institutional Trustee. The Securities Registrar shall not be required to
register the transfer of any Preferred Securities that have been called for
redemption. At the option of a Holder, Preferred
29
Securities Certificates may be exchanged for other Preferred Securities
Certificates in authorized denominations of the same class and of a like
aggregate Liquidation Amount upon surrender of the Preferred Securities
Certificates to be exchanged at the office or agency maintained pursuant to
Section 5.08.
Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustees and the Securities
Registrar duly executed by the Holder or his attorney duly authorized in
writing. Each Preferred Securities Certificate surrendered for registration of
transfer or exchange shall be canceled and subsequently disposed of by the
Securities Registrar in accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Preferred Securities Certificates, but the Securities Registrar or
the Regular Trustees may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Preferred Securities Certificates.
SECTION 5.05. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates
If (a) any mutilated Trust Securities Certificate shall be surrendered
to the Securities Registrar, or if the Securities Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any Trust
Securities Certificate and (b) there shall be delivered to the Securities
Registrar and the Regular Trustees such security or indemnity as may be required
by them to save each of them harmless, then in the absence of notice that such
Trust Securities Certificate shall have been acquired by a bona fide purchaser,
the Regular Trustees or any one of them on behalf of the Trust shall execute,
and the Institutional Trustee shall authenticate and make available for
delivery, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Trust Securities Certificate, a new Trust Securities Certificate of like
class, tenor and denomination. In connection with the issuance of any new Trust
Securities Certificate under this Section, the Regular Trustees or the
Securities Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Trust Securities Certificate issued pursuant to this Section shall
constitute conclusive evidence of an ownership interest in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.
SECTION 5.06. Persons Deemed Securityholders
Prior to due presentation of a Trust Securities Certificate for
registration of transfer, the Trustees or the Securities Registrar shall treat
the Person in whose name any Trust Securities Certificate shall be registered in
the Securities Register as the owner of such Trust Securities Certificate for
the purpose of receiving Distributions (subject to Section 4.01(d)) and for all
other purposes whatsoever, and neither the Trustees nor the Securities Registrar
shall be bound by any notice to the contrary.
30
SECTION 5.07. Access to List of Securityholders' Names and Addresses
In the event that the Institutional Trustee is no longer the Securities
Registrar, the Regular Trustees shall furnish or cause to be furnished to (i)
the Sponsor and the Institutional Trustee semi-annually, not later than June 1
and December 1 in each year, and (ii) the Sponsor or the Institutional Trustee,
as the case may be, within 15 days after receipt by any Regular Trustee of a
request therefor from the Sponsor or the Institutional Trustee, as the case may
be, in writing, a list, in such form as the Sponsor or the Institutional
Trustee, as the case may be, may reasonably require, of the names and addresses
of the Securityholders as of a date not more than 15 days prior to the time such
list is furnished. If three or more Securityholders or one or more Holders of
Trust Securities Certificates evidencing not less than 25% of the outstanding
Liquidation Amount apply in writing to the Regular Trustees, and such
application states that the applicants desire to communicate with other
Securityholders with respect to their rights under this Declaration or under the
Trust Securities Certificates and such application is accompanied by a copy of
the communication that such applicants propose to transmit, then the Regular
Trustees shall, within five Business Days after the receipt of such application,
afford such applicants access during normal business hours to the current list
of Securityholders. Each Holder, by receiving and holding a Trust Securities
Certificate, shall be deemed to have agreed not to hold the Sponsor, the
Institutional Trustee or the Regular Trustees accountable by reason of the
disclosure of its name and address, regardless of the source from which such
information was derived.
SECTION 5.08. Maintenance of Office or Agency
The Regular Trustees shall maintain an office or offices or agency or
agencies where Preferred Securities Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Trustees in respect of the Trust Securities Certificates may be served. The
Regular Trustees initially designate Union Bank of California, N.A., 475 Sansome
Street, 12th Floor, San Francisco, California 94111, or such other address as
may be designated by the Institutional Trustee to the Regular Trustee, as its
principal agency for such purposes. The Regular Trustees shall give prompt
written notice to the Sponsor and to the Securityholders of any change in the
location of the Securities Register or any such office or agency.
SECTION 5.09. Appointment of Paying Agent
The Paying Agent shall make Distributions and other payments provided
hereby to Securityholders from the Payment Account and shall report the amounts
of such Distributions and payments to the Institutional Trustee and the Regular
Trustees. Any Paying Agent shall have the revocable power to withdraw funds from
the Payment Account for the purpose of making the Distributions and payments
provided hereby. The Regular Trustees may revoke such power and remove the
Paying Agent if such Trustees determine in their sole discretion that the Paying
Agent shall have failed to perform its obligations under this Agreement in any
material respect, provided that such revocation and removal shall not become
effective until the appointment of a successor. The Paying Agent shall initially
be the Institutional Trustee, and it may choose any co-paying agent that is
acceptable to the Regular Trustees and the Sponsor. Any Person acting as Paying
Agent shall be permitted to resign as Paying Agent upon 30 days'
31
written notice to the Regular Trustees and the Institutional Trustee, provided
that such resignation shall not become effective until the appointment of a
successor. In the event that a Paying Agent shall resign or be removed, the
Institutional Trustee shall appoint a successor that is acceptable to the
Regular Trustees to act as Paying Agent (which shall be a bank or trust
company). The Institutional Trustee shall cause such successor Paying Agent or
any additional Paying Agent appointed by the Institutional Trustee to execute
and deliver to the Trustees an instrument in which such successor Paying Agent
or additional Paying Agent shall agree with the Trustees that as Paying Agent,
such successor Paying Agent or additional Paying Agent will hold all sums, if
any, held by it for payment to the Securityholders in trust for the benefit of
the Securityholders entitled thereto until such sums shall be paid to such
Securityholders. The Paying Agent shall return all unclaimed funds to the
Institutional Trustee and upon removal of a Paying Agent such Paying Agent shall
also return all funds in its possession to the Institutional Trustee. The
provisions of Sections 8.01, 8.03 and 8.06 shall apply to the Institutional
Trustee also in its role as Paying Agent, for so long as the Institutional
Trustee shall act as Paying Agent and, to the extent applicable, to any other
paying agent appointed hereunder. Any reference in this Agreement to the Paying
Agent shall include any co-paying agent unless the context requires otherwise.
SECTION 5.10. Ownership of Common Securities by Sponsor
On the Issue Date, the Sponsor shall acquire, and thereafter retain,
beneficial and record ownership of the Common Securities. To the fullest extent
permitted by law, any attempted transfer of the Common Securities, except for
transfers by operation of law or to an Affiliate of the Sponsor or a permitted
successor under Article Ten of the Subordinated Indenture, shall be void. The
Regular Trustees shall cause each Common Securities Certificate issued to the
Sponsor to contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT
AS PROVIDED IN THE DECLARATION OF TRUST REFERRED TO HEREIN".
SECTION 5.11. Book-Entry Preferred Securities Certificates; Common
Securities Certificate
(a) The Preferred Securities Certificates, upon original
issuance, will be issued in the form of a typewritten global Preferred
Securities Certificate or Certificates representing Book-Entry Preferred
Securities Certificates, to be delivered to The Depository Trust Company, the
initial Clearing Agency, or its custodian, by or on behalf of, the Trust. Such
Preferred Securities Certificate or Certificates shall initially be registered
on the Securities Register in the name of Cede & Co., the nominee of the initial
Clearing Agency, and no Owner will receive a definitive Preferred Securities
Certificate representing such beneficial owner's interest in such Preferred
Securities, except as provided in Section 5.13. Unless and until Definitive
Preferred Securities Certificates have been issued to Owners pursuant to Section
5.13:
(i) the provisions of this Section 5.11(a) shall
be in full force and effect;
(ii) the Securities Registrar and the Trustees
shall be entitled to deal with the Clearing Agency for all
purposes of this Declaration relating to the Book-Entry
Preferred Securities Certificates (including the payment of
principal
32
of and Distributions on the Book-Entry Preferred Securities
and the giving of instructions or directions to Owners of
Book-Entry Preferred Securities) as the sole Holder of
Book-Entry Preferred Securities and shall have no obligations
to the Owners thereof;
(iii) to the extent that the provisions of this
Section conflict with any other provisions of this
Declaration, the provisions of this Section shall control; and
(iv) the rights of the Owners of the Book-Entry
Preferred Securities Certificates shall be exercised only
through the Clearing Agency and shall be limited to those
established by law and agreements between such Owners and the
Clearing Agency and/or the Clearing Agency Participants.
Pursuant to the Certificate Depository Agreement, unless and
until Definitive Preferred Securities Certificates are issued
pursuant to Section 5.13, the Clearing Agency will make
book-entry transfers among the Clearing Agency Participants
and receive and transmit payments on the Preferred Securities
to such Clearing Agency Participants.
(v) The Clearing Agency 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 Preferred Securities have
voted on any matter provided for in this Declaration, so long
as Definitive Preferred Securities Certificates have not been
issued, the Trustees may conclusively rely on, and shall be
fully protected in relying on, any written instrument
(including a proxy) delivered to the Trustees by the Clearing
Agency setting forth the Owners' votes or assigning the right
to vote on any matter to any other Person either in whole or
in part.
(b) A single Common Securities Certificate representing
the Common Securities shall be issued to the Sponsor in the form of a definitive
Common Securities Certificate.
SECTION 5.12. Notices to Clearing Agency
To the extent a notice or other communication to the Owners is required
under this Declaration, unless and until Definitive Preferred Securities
Certificates shall have been issued to Owners pursuant to Section 5.13, the
Trustees shall give all such notices and communications specified herein to be
given to Owners to the Clearing Agency, and shall have no obligations to the
Owners.
SECTION 5.13. Definitive Preferred Securities Certificates
If (i) the Sponsor advises the Trustees in writing that the Clearing
Agency is no longer willing or able to properly discharge its responsibilities
with respect to the Preferred Securities Certificates, and the Sponsor is unable
to locate a qualified successor within 90 days, or (ii) the Sponsor at its
option advises the Trustees in writing that it elects to terminate the
book-entry
33
system through the Clearing Agency, then the Regular Trustees shall notify the
Clearing Agency and Holders of the Preferred Securities. Upon surrender to the
Regular Trustees of the typewritten Preferred Securities Certificate or
Certificates representing the Book-Entry Preferred Securities Certificates by
the Clearing Agency, accompanied by registration instructions, the Regular
Trustees or any one of them shall execute, and the Institutional Trustee shall
authenticate, the Definitive Preferred Securities Certificates in accordance
with the instructions of the Clearing Agency. Neither the Securities Registrar
nor the Trustees shall be liable for any delay in delivery of such instructions
and may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Preferred Securities Certificates,
the Trustees shall recognize the Holders of the Definitive Preferred Securities
Certificates as Securityholders. The Definitive Preferred Securities
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to the Regular Trustees, as
evidenced by the execution thereof by the Regular Trustees or any one of them.
SECTION 5.14. Rights of Securityholders
The legal title to the Trust Property is vested exclusively in the
Institutional Trustee (in its capacity as such) in accordance with Section 2.09,
and the Securityholders shall not have any right or title therein other than an
undivided beneficial interest in the assets of the Trust conferred by their
Trust Securities, and they shall have no right to call for any partition or
division of property, profits or rights of the Trust except as described below.
The Trust Securities shall be personal property giving only the rights
specifically set forth therein and in this Declaration. The Trust Securities
shall have no preemptive or other similar rights and when issued and delivered
to Securityholders against payment of the purchase price therefor, except as
otherwise provided in the Expense Agreement and Section 11.01 hereof, will be
fully paid and nonassessable by the Trust. Except as otherwise provided in the
Expense Agreement and Section 11.01 hereof, the Holders of the Trust 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.
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
SECTION 6.01. Limitations on Voting Rights
(a) Except as provided in this Section, in Section 2.10,
in Section 8.10 or in Section 11.03 of this Declaration, in the Subordinated
Indenture, and as otherwise required by law, no Holder of Preferred Securities
shall have any right to vote or in any manner otherwise control the
administration, operation and management of the Trust or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Trust Securities Certificates, be construed so as to constitute the
Securityholders from time to time as partners or members of an association.
(b) So long as any Subordinated Debt Securities are held
by the Institutional Trustee on behalf of the Trust, the Institutional Trustee
shall not (i) direct the time, method and place of conducting any proceeding for
any remedy available to the Indenture Trustee, or execute
34
any trust or power conferred on the Institutional Trustee with respect to such
Subordinated Debt Securities; (ii) waive any past default that may be waived
under Section 713 of the Subordinated Indenture; (iii) exercise any right to
rescind or annul a declaration that the principal of all the Subordinated Debt
Securities shall be due and payable; or (iv) consent to any amendment,
modification or termination of the Subordinated Indenture or the Subordinated
Debt Securities, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of at least a Majority in
Liquidation Amount of the Preferred Securities; provided, however, that where a
consent under the Subordinated Indenture would require the consent of each
holder of Subordinated Debt Securities affected thereby, no such consent shall
be given by the Institutional Trustee without the prior written consent of each
Holder of Preferred Securities. The Institutional Trustee shall not revoke any
action previously authorized or approved by a vote of the Holders of Preferred
Securities, except by a subsequent vote of the Holders of Preferred Securities.
Subject to Section 8.02, the Institutional Trustee shall notify all Holders of
the Preferred Securities of any notice of default received with respect to the
Subordinated Debt Securities. In addition to obtaining the foregoing approvals
of the Holders of the Preferred Securities, prior to taking any of the foregoing
actions, the Institutional Trustee shall, at the expense of the Sponsor, obtain
an Opinion of Counsel experienced in such matters to the effect that such action
will not cause the Trust to be taxable other than as a grantor trust for United
States federal income tax purposes.
(c) If any proposed amendment to the Declaration provides
for, or the Trust otherwise proposes to effect, (i) any action that would
adversely affect in any material respect the interests, powers, preferences or
special rights of the Preferred Securities, whether by way of amendment to the
Declaration or otherwise, or (ii) the dissolution, winding-up or termination of
the Trust, other than pursuant to the terms of this Declaration, then the
Holders of Outstanding Trust Securities as a 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 the Holders of at least a Majority in Liquidation
Amount of the Preferred Securities; except as otherwise provided in Section
11.03(c). Notwithstanding any other provision of this Declaration, no amendment
to this Declaration may be made if, as a result of such amendment, it would
cause the Trust to be taxable other than as a grantor trust for United States
federal income tax purposes.
(d) Holders of a Majority in Liquidation Amount of the
Preferred Securities may, on behalf of the Holders of all the Preferred
Securities, waive any past Event of Default and its consequences, except a
default described in clause (b) or (c) of the definition of "Event of Default"
contained in Section 1.01, a default in respect of a covenant or provision which
under this Declaration cannot be modified or amended without the consent of the
Holder of each Outstanding Preferred Security or an Indenture Event of Default
that the Holders of a Majority in Liquidation Amount of the Preferred Securities
would not be entitled to waive pursuant to Section 6.01(e).
Upon any such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured
for every purpose of this Declaration; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon. Any waiver by the Holders of the Preferred Securities of an Event of
Default with respect to Preferred Securities shall also be deemed to
35
constitute a waiver by the Holders of Common Securities for all purposes of the
Declaration without any further act, vote or consent of the Holders of Common
Securities.
(e) For so long as any Preferred Securities remain
Outstanding, if, upon an Indenture Event of Default, the Indenture Trustee and
the holders of the outstanding Subordinated Debt Securities have failed to
declare the principal of all of the Subordinated Debt Securities to be
immediately due and payable, the Holders of at least 33% in aggregate
Liquidation Amount of the Preferred Securities then Outstanding shall have such
right to make such declaration by a notice in writing to the Institutional
Trustee, the Sponsor and the Indenture Trustee.
At any time after such a declaration of acceleration with respect to
the Subordinated Debt Securities has been made and before a judgment or decree
for payment of the money due has been obtained by the Indenture Trustee as
provided in the Subordinated Indenture, the Holders of a Majority in Liquidation
Amount of the Preferred Securities, by written notice to the Institutional
Trustee, the Sponsor and the Indenture Trustee, may rescind and annul such
declaration and its consequences if:
(i) the Sponsor has paid or deposited with the
Indenture Trustee a sum sufficient to pay
(1) all overdue installments of
interest on all of the Subordinated Debt Securities,
(2) the principal of any Subordinated
Debt Securities which have become due otherwise than
by such declaration of acceleration and interest
thereon at the rate borne by the Subordinated Debt
Securities, and
(3) all sums paid or advanced by the
Indenture Trustee under the Subordinated Indenture
and the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee
and the Institutional Trustee, their agents and
counsel; and
(ii) all Indenture Events of Default, other than
the non-payment of the principal of the Subordinated Debt
Securities which has become due solely by such acceleration,
have been cured or waived as provided in Section 713 of the
Subordinated Indenture.
The Holders of at least a Majority in Liquidation Amount of the
Preferred Securities may, on behalf of the Holders of all the Preferred
Securities, waive any past default under the Subordinated Indenture, except a
default in the payment of principal or interest (unless such default has been
cured and a sum sufficient to pay all matured installments of interest and
principal due otherwise than by acceleration has been deposited with the
Indenture Trustee) or a default in respect of a covenant or provision which
under the Subordinated Indenture cannot be modified or amended without the
consent of the holder of each outstanding Subordinated Debt Securities. No such
rescission shall affect any subsequent default or impair any right consequent
thereon.
36
Upon receipt by the Institutional Trustee of written notice declaring
such an acceleration, or rescission and annulment thereof, by Holders of the
Preferred Securities all or part of which is represented by Book-Entry Preferred
Securities Certificates, a record date shall be established for determining
Holders of Outstanding Preferred Securities entitled to join in such notice,
which record date shall be at the close of business on the day the Institutional
Trustee receives such notice. The Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to join in such
notice, whether or not such Holders remain Holders after such record date;
provided, that, unless such declaration of acceleration, or rescission and
annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having joined in such notice prior to the day which is 90
days after such record date, such notice of declaration of acceleration, or
rescission and annulment, as the case may be, shall automatically and without
further action by any Holder be canceled and of no further effect. Nothing in
this paragraph shall prevent a Holder, or a proxy of a Holder, from giving,
after expiration of such 90-day period, a new written notice of declaration of
acceleration, or rescission and annulment thereof, as the case may be, that is
identical to a written notice which has been canceled pursuant to the proviso to
the preceding sentence, in which event a new record date shall be established
pursuant to the provisions of this Section 6.01(e).
(f) Except as set forth in Section 6.01(e) and Section
8.19, the Holders of Preferred Securities shall have no right to exercise
directly any right or remedy available to the holders of, or in respect of, the
Subordinated Debt Securities.
The Holders of a Majority in Liquidation Amount of the Preferred
Securities at the time Outstanding shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred on the
Institutional Trustee with respect to the Preferred Securities; provided,
however, that, the Institutional Trustee shall have the right to decline to
follow any such direction if the Institutional Trustee being advised by counsel
determines that the action so directed may not lawfully be taken, or if the
Institutional Trustee in good faith shall determine that the proceedings so
directed would be illegal or involve it in personal liability or be unduly
prejudicial to the rights of Holders of Preferred Securities not parties to such
direction, and provided further that nothing in this Declaration shall impair
the right of the Institutional Trustee to take any action deemed proper by the
Institutional Trustee and which is not inconsistent with such direction by such
Holders.
SECTION 6.02. Notice of Meetings
Notice of all meetings of the Holders of Preferred Securities, stating
the time, place and purpose of the meeting, shall be given by the Regular
Trustees pursuant to Section 11.08 to each Holder of Preferred Securities of
record, at his registered address, at least 15 days and not more than 90 days
before the meeting. At any such meeting, any business properly before the
meeting may be so considered whether or not stated in the notice of the meeting.
Any adjourned meeting may be held as adjourned without further notice.
37
SECTION 6.03. Meetings of Holders of Preferred Securities
No annual meeting of Securityholders is required to be held. The
Regular Trustees, however, shall call a meeting of Securityholders to vote on
any matter upon the written request of the Holders of Preferred Securities of
record of at least 33% of the Preferred Securities (based upon their Liquidation
Amount) and the Regular Trustees or the Institutional Trustee may, at any time
in their discretion, call a meeting of Holders of Preferred Securities to vote
on any matters as to which Holders of Preferred Securities are entitled to vote.
Holders of Preferred Securities of record of at least 50% of the
Preferred Securities (based upon their Liquidation Amount), present in person or
by proxy, shall constitute a quorum at any meeting of Holders of Preferred
Securities.
If a quorum is present at a meeting, an affirmative vote by the Holders
of Preferred Securities of record present, in person or by proxy, holding more
than 66-2/3% of the Preferred Securities (based upon their Liquidation Amount)
held by the Holders of Preferred Securities of record present, either in person
or by proxy, at such meeting shall constitute the action of the Securityholders,
unless this Declaration requires a greater number of affirmative votes.
SECTION 6.04. Voting Rights
Securityholders shall be entitled to one vote for each $1,000 of
Liquidation Amount represented by their Trust Securities in respect of any
matter as to which such Securityholders are entitled to vote; provided, however,
any Preferred Securities that are owned by the Company, the Institutional
Trustee or the Delaware Trustee will, for purposes of any vote or consent, be
treated as if they were not outstanding.
SECTION 6.05. Proxies, etc.
At any meeting of Securityholders, any Securityholder entitled to vote
may vote by proxy, provided that no proxy shall be voted at any meeting unless
it shall have been placed on file with the Regular Trustees, or with such other
officer or agent of the Trust as the Regular Trustees may direct, for
verification prior to the time at which such vote shall be taken. Pursuant to a
resolution of the Institutional Trustee, proxies may be solicited in the name of
the Institutional Trustee or one or more officers of the Institutional Trustee.
Only Securityholders of record shall be entitled to vote. When Trust Securities
are held jointly by several Persons, any one of them may vote at any meeting in
person or by proxy in respect of such Trust Securities, but if more than one of
them shall be present at such meeting in person or by proxy, and such joint
owners or their proxies so present disagree as to any vote to be cast, such vote
shall not be received in respect of such Trust Securities. A proxy purporting to
be executed by or on behalf of a Securityholder shall be deemed valid unless
challenged at or prior to its exercise, and the burden of proving invalidity
shall rest on the challenger. No proxy shall be valid more than three years
after its date of execution.
SECTION 6.06. Securityholder Action by Written Consent
Any action which may be taken by Securityholders at a meeting may be
taken without a meeting and without prior notice if Securityholders holding at
least 66-2/3% of all outstanding
38
Trust Securities entitled to vote in respect of such action (or such other
proportion thereof as shall be required by any express provision of this
Declaration) shall consent to the action in writing (based upon their
Liquidation Amount).
SECTION 6.07. Record Date for Voting and Other Purposes
For the purposes of determining the Securityholders who are entitled to
notice of and to vote at any meeting or by written consent, or to participate in
any Distribution on the Trust Securities in respect of which a record date is
not otherwise provided for in this Declaration, or for the purpose of any other
action, the Regular Trustees may from time to time fix a date, not more than 90
days prior to the date of any meeting of Securityholders or the payment of
Distribution or other action, as the case may be, as a record date for the
determination of the identity of the Securityholders of record for such
purposes.
SECTION 6.08. Acts of Securityholders
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Declaration to be given, made or
taken by Securityholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Securityholders in
person or by an agent appointed in writing; and, except as otherwise expressly
provided herein, such action shall become effective when such instrument or
instruments are delivered to the Regular Trustees. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Securityholders signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Declaration and (subject to Section 8.01) conclusive in favor of the Trustees,
if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustees deem sufficient.
The ownership of Preferred Securities shall be proved by the Securities
Register. Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder to
take any action hereunder with regard to any particular Trust Security may do so
with regard to all or any part of
39
the Liquidation Amount of such Trust Security or by one or more duly appointed
agents each of which may do so pursuant to such appointment with regard to all
or any part of such Liquidation Amount.
If any dispute shall arise between the Securityholders and the Trustees
with respect to the authenticity, validity or binding nature of any request,
demand, authorization, direction, consent, waiver or other Act of such
Securityholder or Trustee under this Article VI, then the determination of such
matter by the Institutional Trustee shall be conclusive with respect to such
matter.
SECTION 6.09. Inspection of Records
Upon reasonable notice to the Trustees, the records of the Trust shall
be open to inspection by Securityholders during normal business hours for any
purpose reasonably related to such Securityholder's interest as a
Securityholder.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE TRUSTEES
SECTION 7.01. Representations and Warranties of the Trustees
The Bank, the Delaware Bank, the Institutional Trustee and the Delaware
Trustee, each on behalf of and as to itself, hereby represents and warrants for
the benefit of the Sponsor and the Securityholders that:
(a) the Bank is a national banking association or trust
company duly organized, validly existing and in good standing under the laws of
the United States of America, and the Delaware Bank is a banking corporation or
trust company, duly organized, validly existing and in good standing under the
laws of the State of Delaware;
(b) each of the Bank and the Delaware Bank has full
corporate power, authority and legal right to execute, deliver and perform their
obligations under this Declaration and has taken all necessary action to
authorize the execution, delivery and performance by it of this Declaration;
(c) this Declaration has been duly authorized, executed
and delivered by each of the Bank and the Delaware Bank and constitutes the
valid and legally binding agreement of each of the Bank and the Delaware Bank,
enforceable against it in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles;
(d) the execution, delivery and performance by each of
the Bank and the Delaware Bank of this Declaration have been duly authorized by
all necessary corporate action on the part of the Bank, the Institutional
Trustee, the Delaware Bank and the Delaware Trustee and do not require any
approval of stockholders of the Bank or the Delaware Bank and such execution,
delivery and performance will not (i) violate the Bank's or the Delaware Bank's
40
Charter or By-laws, or (ii) violate any law, governmental rule or regulation of
the United States or the State of New York or Delaware, as the case may be,
governing the banking or trust powers of the Bank and the Institutional Trustee
or the Delaware Bank and the Delaware Trustee, or any order, judgment or decree
applicable to the Bank, the Institutional Trustee, the Delaware Bank or the
Delaware Trustee; and
(e) neither the authorization, execution or delivery by
the Bank or the Delaware Bank of this Declaration, nor the consummation of any
of the transactions by the Bank, the Institutional Trustee, the Delaware Bank or
the Delaware Trustee (as appropriate in context) contemplated herein or therein,
require the consent or approval of, the giving of notice to, the registration
with or the taking of any other action with respect to any governmental
authority or agency under any existing federal, New York or Delaware law
governing the banking or trust powers of the Bank or the Delaware Bank.
ARTICLE VIII
THE TRUSTEES
SECTION 8.01. Certain Duties and Responsibilities
(a) The rights, duties and responsibilities of the
Trustees shall be as provided by this Declaration and, in the case of the
Institutional Trustee, the Trust Indenture Act. The Institutional Trustee, other
than during the occurrence and continuation of an Event of Default, undertakes
to perform only such duties as are specifically set forth in this Declaration
and, upon an Event of Default, must exercise the same degree of care and skill
as a prudent person would exercise or use in the conduct of his/her own affairs.
The Trustees shall have all the privileges, rights and immunities provided by
the Delaware Statutory Trust Act. Notwithstanding the foregoing, no provision of
this Declaration shall require the Trustees to expend or risk their own funds or
otherwise incur any financial liability in the performance of any of their
duties hereunder, or in the exercise of any of their rights or powers, if they
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
them. Whether or not therein expressly so provided, every provision of this
Declaration relating to the conduct or affecting the liability of or affording
protection to the Trustees shall be subject to the provisions of this Section.
To the extent that, at law or in equity, each Trustee has duties (including
fiduciary duties) and liabilities relating thereto to the Trust or to the
Securityholders, each Trustee shall not be liable to the Trust or to any
Securityholder for such Trustee's good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of each Trustee otherwise existing at law or
in equity, are agreed by the Sponsor and the Securityholders to replace such
other duties and liabilities of such Trustee.
(b) All payments made by the Institutional Trustee in
respect of the Trust Securities shall be made only from the income and proceeds
from the Trust Property and only to the extent that there shall be sufficient
income or proceeds from the Trust Property to enable the Institutional Trustee
to make payments in accordance with the terms hereof. Each Securityholder, by
its acceptance of a Trust Security, agrees that it will look solely to the
income and proceeds from the Trust Property to the extent available for
distribution to it as herein
41
provided and that the Trustees are not personally liable to it for any amount
distributable in respect of any Trust Security or for any other liability in
respect of any Trust Security. This Section 8.01(b) does not limit the liability
of the Trustees expressly set forth elsewhere in this Declaration or, in the
case of the Institutional Trustee, in the Trust Indenture Act.
SECTION 8.02. Notice of Defaults
Within 90 days after the occurrence of any default known to the
Institutional Trustee, the Institutional Trustee shall transmit, in the manner
and to the extent provided in Section 11.08, notice of default to the
Securityholders, the Regular Trustees and the Sponsor, unless such default shall
have been cured or waived before the giving of such notice, provided that the
Institutional Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee, or a trust committee of
directors and/or responsible officers of the Institutional Trustee in good faith
determines that the withholding of such notice is in the interests of the
Securityholders. For the purpose of this Section, the term "default" means any
event which is, or after notice or lapse of time or both would become, an Event
of Default.
SECTION 8.03. Certain Rights of Institutional Trustee
Subject to the provisions of Section 8.01 and except as provided by
law:
(a) the Institutional Trustee may rely and shall be
protected in acting or refraining from acting in good faith upon any resolution,
Opinion of Counsel, certificate, written representation of a Holder or
transferee, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, bond or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) if (i) in performing its duties under this
Declaration the Institutional Trustee is required to decide between alternative
courses of action, or (ii) in construing any of the provisions in this
Declaration the Institutional Trustee finds the same ambiguous or inconsistent
with any other provisions contained herein, or (iii) the Institutional Trustee
is unsure of the application of any provision of this Declaration, then, except
as to any matter as to which the Holders of Preferred Securities are entitled to
vote under the terms of this Declaration, the Institutional Trustee shall
deliver a notice to the Sponsor requesting written instructions of the Sponsor
as to the course of action to be taken. The Institutional Trustee shall take
such action, or refrain from taking such action, as the Institutional Trustee
shall be instructed in writing to take, or to refrain from taking, by the
Sponsor; provided, however, that if the Institutional Trustee does not receive
such instructions of the Sponsor within ten Business Days after it has delivered
such notice, or such reasonably shorter period of time set forth in such notice
(which to the extent practicable shall not be less than two Business Days), it
may, but shall be under no duty to, take or refrain from taking such action not
inconsistent with this Declaration as it shall deem advisable and in the best
interests of the Securityholders, in which event the Institutional Trustee shall
have no liability except for its own bad faith, negligence or willful
misconduct;
(c) the Institutional Trustee may consult with counsel or
other experts of its selection and the written advice of such counsel or other
experts or any Opinion of Counsel shall
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be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon;
(d) the Institutional Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Declaration at the request or direction of any of the Securityholders pursuant
to this Declaration, unless such Securityholders shall have offered to the
Institutional Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(e) the Institutional Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other document, but the Institutional Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit;
(f) the Institutional Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys; provided that the Institutional Trustee
shall be responsible for its own negligence or recklessness with respect to
selection of any agent or attorney appointed by it hereunder;
(g) the Institutional Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Declaration;
(h) the Institutional Trustee shall not be deemed to have
notice of any default or Event of Default unless an officer of the Institutional
Trustee assigned to its Corporate Trust Division has actual knowledge thereof or
unless written notice of any event which is in fact such a default is received
by the Institutional Trustee at its corporate trust office, and such notice
references the Trust Securities and this Declaration; and
(i) the rights, privileges, protections, immunities and
benefits given to the Institutional Trustee, including, without limitation, its
right to be indemnified, are extended to, and shall be enforceable by, the
Institutional Trustee in each of its respective capacities hereunder, and to
each agent, custodian and other Person employed to act hereunder.
SECTION 8.04. Not Responsible for Recitals or Issuance of Securities
The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Trust, and the Trustees do not assume
any responsibility for their correctness. The Trustees shall not be accountable
for the use or application by the Trust of the proceeds of the Trust Securities
in accordance with Section 2.05.
The Institutional Trustee may conclusively assume that any funds held
by it hereunder are legally available unless an officer of the Institutional
Trustee assigned to its Institutional Trust Services Department shall have
received written notice from the Company, any Holder or any other Trustee that
such funds are not legally available.
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The Institutional Trustee makes no representations as to the value or
condition of the property of the Trust or any part thereof. The Institutional
Trustee makes no representations as to the validity or sufficiency of this
Declaration or the Trust Securities.
SECTION 8.05. May Hold Securities
Any Trustee or any other agent of the Trustees or the Trust, in its
individual or any other capacity, and except as provided in the definition of
the term "Outstanding" in Article I, may become the owner or pledgee of Trust
Securities and may otherwise deal with the Trust with the same rights it would
have if it were not a Trustee or such other agent.
SECTION 8.06. Compensation; Fees; Indemnity
The Sponsor, as obligor of the Subordinated Debt Securities, agrees:
(a) to pay to the Trustees from time to time reasonable
compensation for all services rendered by the Trustees hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to
reimburse the Trustees upon request for all reasonable expenses, disbursements
and advances incurred or made by the Trustees in accordance with any provision
of this Declaration (including the reasonable compensation and the expenses and
disbursements of their agents and counsel), except any such expense,
disbursement or advance as may be attributable to their willful misconduct,
negligence or bad faith (or, in the case of the Delaware Trustee, any such
expense, disbursement or advance as shall have been caused by his/her own gross
negligence); and
(c) to indemnify each of the Trustees for, and to hold
each of the Trustees harmless against, any and all loss, damage, claims,
liability or expense incurred without willful misconduct, negligence (gross
negligence, in the case of the Delaware Trustee) or bad faith on their part,
arising out of or in connection with the acceptance or administration of this
Declaration, including the costs and expenses of defending themselves against
any claim (whether by the Sponsor, any Securityholder or any other person) or
liability in connection with the exercise or performance of any of their powers
or duties hereunder.
The provisions of this Section 8.06 shall survive the termination of
this Declaration.
SECTION 8.07. Trustees Required; Eligibility
(a) There shall at all times be an Institutional Trustee
hereunder with respect to the Trust Securities. The Institutional Trustee shall
be a Person that has a combined capital and surplus of at least $50,000,000. If
any such Person publishes reports of condition at least annually, pursuant to
law or to the requirements of its supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of such Person
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Institutional
Trustee with respect to the Trust Securities shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
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(b) There shall at all times be one or more Regular
Trustees hereunder with respect to the Trust Securities. Each Regular Trustee
shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind such
entity.
(c) There shall at all times be a Delaware Trustee with
respect to the Trust Securities. The Delaware Trustee shall either be (i) a
natural person who is at least 21 years of age and a resident of the State of
Delaware or (ii) a legal entity authorized to conduct a trust business and with
its principal place of business in the State of Delaware that shall act through
one or more persons authorized to bind such entity.
SECTION 8.08. Conflicting Interests
If the Institutional Trustee has or shall acquire a conflicting
interest within the meaning of the Trust Indenture Act, the Institutional
Trustee shall either eliminate such interest or resign, to the extent and in the
manner provided by, and subject to the provisions of, the Trust Indenture Act
and this Declaration. To the extent permitted by the Trust Indenture Act, the
Institutional Trustee shall not be deemed to have a conflicting interest by
virtue of being trustee under the Guarantee.
SECTION 8.09. Co-Trustees and Separate Trustee
At any time or times, for the purpose of meeting the legal requirements
of the Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Holder of the Common Securities and the
Institutional Trustee shall have power to appoint, and upon the written request
of the Institutional Trustee, the Sponsor shall for such purpose join with the
Institutional Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to appoint, one or more Persons
approved by the Institutional Trustee either to act as co-trustee, jointly with
the Institutional Trustee, of all or any part of such Trust Property, or to act
as separate trustee of any such Trust Property, in either case with such powers
as may be provided in the instrument of appointment, and to vest in such Person
or Persons in the capacity aforesaid, any property, title, right or power deemed
necessary or desirable, subject to the other provisions of this Section. If the
Sponsor does not join in such appointment within 15 days after the receipt by it
of a request so to do, or in case an Indenture Event of Default has occurred and
is continuing, the Institutional Trustee alone shall have power to make such
appointment. Any co-trustee or separate trustee appointed pursuant to this
Section shall satisfy the requirements of Section 8.07.
Should any written instrument from the Sponsor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged, and delivered
by the Sponsor.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
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(i) The Trust Securities shall be executed,
authenticated and delivered and all rights, powers, duties,
and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or
required to be deposited or pledged with, the Trustees
hereunder, shall be exercised, solely by the Trustees.
(ii) The rights, powers, duties, and obligations
hereby conferred or imposed upon the Institutional Trustee in
respect of any property covered by such appointment shall be
conferred or imposed upon and exercised or performed by the
Institutional Trustee or by the Institutional Trustee and such
co-trustee or separate trustee jointly, as shall be provided
in the instrument appointing such co-trustee or separate
trustee, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed,
the Institutional Trustee shall be incompetent or unqualified
to perform such act, in which event such rights, powers,
duties, and obligations shall be exercised and performed by
such co-trustee or separate trustee.
(iii) The Institutional Trustee, at any time, by
an instrument in writing executed by it, with the written
concurrence of the Sponsor, may accept the resignation of or
remove any co-trustee or separate trustee appointed under this
Section, and, in case an Indenture Event of Default has
occurred and is continuing, the Institutional Trustee shall
have power to accept the resignation of, or remove, any such
co-trustee or separate trustee without the concurrence of the
Sponsor. Upon the written request of the Institutional
Trustee, the Sponsor shall join with the Institutional Trustee
in the execution, delivery, and performance of all instruments
and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or
separate trustee so resigned or removed may be appointed in
the manner provided in this Section.
(iv) No co-trustee or separate trustee hereunder
shall be personally liable by reason of any act or omission of
the Institutional Trustee, or any other such trustee
hereunder.
(v) The Trustees shall not be liable by reason
of any act of a co-trustee or separate trustee.
(vi) Any Act of Holders delivered to the
Institutional Trustee shall be deemed to have been delivered
to each such co-trustee and separate trustee.
SECTION 8.10. Resignation and Removal; Appointment of Successor
No resignation or removal of any Trustee (the "Relevant Trustee") and
no appointment of a successor Relevant Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor Relevant
Trustee in accordance with the applicable requirements of Section 8.11.
The Relevant Trustee may resign at any time by giving written notice
thereof to the Securityholders, the Sponsor and the other Trustees, except that
notice is only required to be
46
delivered to the Securityholders in the event that the Institutional Trustee or
the Delaware Trustee is the resigning Relevant Trustee. If the instrument of
acceptance by a successor Relevant Trustee required by Section 8.11 shall not
have been delivered to the resigning Relevant Trustee within 30 days after the
giving of such notice of resignation, the resigning Relevant Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Relevant Trustee.
Unless an Indenture Event of Default shall have occurred and be
continuing, the Relevant Trustee may be removed at any time by Act of the Holder
of the Common Securities. If an Indenture Event of Default shall have occurred
and be continuing, the Relevant Trustee may be removed at such time by Act of
the Securityholders of a Majority in Liquidation Amount of the Preferred
Securities, delivered to the Relevant Trustee (in its individual capacity and on
behalf of the Trust).
If the Relevant Trustee shall resign, be removed or become incapable of
continuing to act as Trustee at a time when no Indenture Event of Default shall
have occurred and be continuing, the Holder of the Common Securities, by Act of
the Holder of the Common Securities delivered to the retiring and successor
Relevant Trustees, shall promptly appoint a successor Relevant Trustee or
Trustees, and the retiring Relevant Trustee shall comply with the applicable
requirements of Section 8.11. If the Relevant Trustee shall resign, be removed
or become incapable of continuing to act as the Relevant Trustee at a time when
an Indenture Event of Default shall have occurred and be continuing, the Holders
of Preferred Securities, by Act of the Securityholders of a Majority in
Liquidation Amount of the Preferred Securities then outstanding delivered to the
retiring and successor Relevant Trustee, shall promptly appoint a successor
Relevant Trustee or Trustees, and the Relevant Trustee shall comply with the
applicable requirements of Section 8.11. If no successor Relevant Trustee shall
have been so appointed in accordance with this Section 8.10 and accepted
appointment in the manner required by Section 8.11, any Securityholder who has
been a Securityholder of Trust Securities for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Relevant Trustee.
The Institutional Trustee shall give notice of each resignation and
each removal of the Relevant Trustee, and each appointment of a successor
Trustee to all Securityholders in the manner provided in Section 11.08 and shall
give notice to the Sponsor, except that notice is only required to be delivered
to the Securityholders in the event that the Institutional Trustee or the
Delaware Trustee is the resigning or removed Relevant Trustee. Each notice shall
include the name of the successor Relevant Trustee and the address of its
corporate trust office if it is the Institutional Trustee.
Notwithstanding the foregoing or any other provision of this
Declaration, in the event any Regular Trustee or a Delaware Trustee who is a
natural person dies or becomes incompetent or incapacitated, the vacancy created
by such death, incompetence or incapacity may be filled by (i) the act of the
remaining Regular Trustee or (ii) otherwise by the Sponsor (with the successor
in each case being an individual who satisfies the eligibility requirement for
Regular Trustees set forth in Section 8.07). Additionally, notwithstanding the
foregoing or any other provision of this Declaration, in the event the Sponsor
believes that any Regular Trustee has become incompetent or incapacitated, the
Sponsor, by notice to the remaining Trustees, may terminate the status of
47
such Person as an Regular Trustee (in which case the vacancy so created will be
filled in accordance with the preceding sentence).
SECTION 8.11. Acceptance of Appointment by Successor
In case of the appointment hereunder of a successor Relevant Trustee,
every such successor Relevant Trustee so appointed shall execute, acknowledge
and deliver to the Trust and to the retiring Relevant Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Relevant Trustee shall become effective and such successor Relevant
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Relevant Trustee; but,
on the request of the Sponsor or the successor Relevant Trustee, such retiring
Relevant Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Relevant Trustee all the rights,
powers and trusts of the retiring Relevant Trustee and shall duly assign,
transfer and deliver to such successor Relevant Trustee all property and money
held by such retiring Relevant Trustee hereunder.
Upon request of any such successor Relevant Trustee, the retiring
Relevant Trustee shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Relevant Trustee all such
rights, powers and trusts referred to in the preceding paragraph.
No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article.
SECTION 8.12. Merger, Conversion, Consolidation or Succession to
Business
Any Person into which the Institutional Trustee, Delaware Trustee or
any Regular Trustee which is not a natural person may be merged or converted or
with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which such Relevant Trustee shall be a party, or
any Person succeeding to all or substantially all the corporate trust business
of such Relevant Trustee, shall be the successor of such Relevant Trustee
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.
SECTION 8.13. Preferential Collection of Claims Against Sponsor or
Trust
If and when the Institutional Trustee shall be or become a creditor of
the Sponsor or the Trust (or any other obligor upon the Subordinated Debt
Securities or the Trust Securities), the Institutional Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of claims
against the Sponsor or Trust (or any such other obligor). For purposes of
Section 311(b)(4) and (6) of the Trust Indenture Act:
(a) "cash transaction" means any transaction in which
full payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other orders
drawn upon banks or bankers and payable upon demand; and
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(b) "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or incurred
by the Sponsor or the Trust (or any such obligor) for the purpose of financing
the purchase, processing, manufacturing, shipment, storage or sale of goods,
wares or merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or merchandise
previously constituting the security; provided the security is received by the
Institutional Trustee simultaneously with the creation of the creditor
relationship with the Sponsor or the Trust (or any such obligor) arising from
the making, drawing, negotiating or incurring of the draft, bill of exchange,
acceptance or obligation.
SECTION 8.14. Reports by Institutional Trustee
(a) Within 60 days after May 15 of each year commencing
with May 15, 2004, if required by Section 313(a) of the Trust Indenture Act, the
Institutional Trustee shall transmit a brief report dated as of such May 15 with
respect to any of the events specified in such Section 313(a) that may have
occurred since the later of the date of this Declaration or the preceding May
15.
(b) The Institutional Trustee shall transmit to
Securityholders the reports required by Section 313(b) of the Trust Indenture
Act at the times specified therein.
(c) Reports pursuant to this Section shall be transmitted
in the manner and to the Persons required by Sections 313(c) and (d) of the
Trust Indenture Act.
SECTION 8.15. Reports to the Institutional Trustee
The Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Institutional Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and, within 120 days
after the end of each fiscal year of the Sponsor, the compliance certificate
required by Section 314(a)(4) of the Trust Indenture Act in the form and in the
manner required by Section 314 of the Trust Indenture Act.
Delivery of such reports, information and documents to the
Institutional Trustee is for informational purposes only and the Institutional
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein.
SECTION 8.16. Evidence of Compliance with Conditions Precedent
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration, including an
Officers' Certificate and an Opinion of Counsel that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given pursuant to Section 314(c) of the Trust
Indenture Act shall comply with Section 314(e) of the Trust Indenture Act.
49
SECTION 8.17. Number of Trustees
(a) The number of Trustees shall initially be four;
provided that the Sponsor by written instrument may increase or decrease the
number of Regular Trustees.
(b) If a Trustee ceases to hold office for any reason and
the number of Regular Trustees is not reduced pursuant to Section 8.17(a), or if
the number of Trustees is increased pursuant to Section 8.17(a), a vacancy shall
occur. The vacancy shall be filled with a Trustee appointed in accordance with
Section 8.10.
(c) Except as provided in Section 9.02, the death,
resignation, retirement, removal, bankruptcy, incompetence or incapacity to
perform the duties of a Trustee shall not operate to annul, dissolve or
terminate the Trust. Whenever a vacancy in the number of Regular Trustees shall
occur, until such vacancy is filled by the appointment of an Regular Trustee in
accordance with Section 8.10, the Regular Trustees in office, regardless of
their number (and notwithstanding any other provision of this Declaration),
shall have all powers granted to the Regular Trustees and shall discharge the
duties imposed upon the Regular Trustees by this Declaration.
SECTION 8.18. Delegation of Power
(a) Any Regular Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purpose of executing any documents
contemplated in Section 2.07(a), including any registration statement or
amendment thereto filed with the Commission, or making any other governmental
filing; and
(b) The Regular Trustees shall have power to delegate
from time to time to such of their number the doing of such things and the
execution of such instruments either in the name of the Trust or the names of
the Regular Trustees or otherwise as the Regular Trustees may deem expedient, to
the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
SECTION 8.19. Enforcement of Rights of Institutional Trustee by
Securityholders
If (i) the Trust fails to pay Distributions in full on the Preferred
Securities for more than five consecutive years at any one time, or (ii) an
Event of Default occurs and is continuing, then the Institutional Trustee may
enforce its rights against the Company as the holder of the Subordinated Debt
Securities. In addition, the Holders of a majority in aggregate Liquidation
Amount of the Preferred Securities will have the right to direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee or to direct the exercise of any trust or power conferred
upon the Institutional Trustee under this Declaration, including the right to
direct the Institutional Trustee to exercise the remedies available to it as a
holder of the Subordinated Debt Securities; provided that such direction shall
not be in conflict with any rule of law or with this Declaration, and could not
involve the Institutional Trustee in personal liability in circumstances where
reasonable indemnity would not be adequate. If the Institutional Trustee fails
to enforce its rights under the Subordinated Debt Securities, a Holder of
Preferred Securities may, to the fullest extent permitted by applicable law,
institute a legal
50
proceeding against the Company to enforce its rights under this Declaration
without first instituting any legal proceeding against the Institutional Trustee
or any other Person, including the Trust; it being understood and intended that
no one or more of such Holders shall have any right in any manner whatsoever by
virtue of, or by availing of, any provision of this Declaration to affect,
disturb or prejudice the rights of any other of such Holders or to obtain or to
seek to obtain priority or preference over any other of such Holders or to
enforce any right under this Declaration, except in the manner herein provided
and for the equal and ratable benefit of all such Holders. Notwithstanding the
foregoing, a Holder of Preferred Securities may institute a legal proceeding
directly against the Company, without first instituting a legal proceeding
against or requesting or directing that action be taken by the Institutional
Trustee or any other Person, for enforcement of payment to such Holder of
principal of or interest on the Subordinated Debt Securities having a principal
amount equal to the aggregate stated liquidation amount of the Preferred
Securities of such Holder on or after the due dates therefor specified or
provided for in the Subordinated Debt Securities. The Company shall be
subrogated to all rights of the Holders of Preferred Securities in respect of
any amounts paid to such Holders by the Company pursuant to this Section.
SECTION 8.20. Delaware Trustee
(a) Notwithstanding any other provision of this
Declaration, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees or the Institutional Trustee described in this Declaration.
The Delaware Trustee shall be a trustee for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Delaware Statutory Trust Act.
(b) It is expressly understood and agreed by the parties
hereto that in fulfilling its obligations as Delaware Trustee hereunder on
behalf of the Trust (i) each of the representations, undertakings and agreements
herein made on the part of the Trust is made and intended not as
representations, warranties, covenants, undertakings and agreements by SunTrust
Delaware Trust Company in its individual capacity but is made and intended for
the purpose of binding only the Trust, and (ii) under no circumstances shall
SunTrust Delaware Trust Company in its individual capacity be personally liable
for the payment of any indebtedness or expenses of the Trust or be liable for
the breach or failure of any obligation, representation, warranty or covenant
made or undertaken by the Trust under this Declaration, except if such breach or
failure is due to any gross negligence or willful misconduct of the Delaware
Trustee.
ARTICLE IX
DISSOLUTION AND LIQUIDATION
SECTION 9.01. Dissolution Upon Expiration Date
The Trust shall automatically dissolve on December 31, 2034 (the
"Expiration Date") or earlier pursuant to Section 9.02.
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SECTION 9.02. Early Termination
Upon the first to occur of any of the following events (such first
occurrence, an "Early Termination Event"), the Trust shall be dissolved in
accordance with the terms hereof:
(i) the occurrence of a Bankruptcy Event in
respect of the Sponsor, dissolution or liquidation of the
Sponsor, or the dissolution of the Trust pursuant to judicial
decree;
(ii) the delivery of written direction to the
Institutional Trustee by the Sponsor at any time (which
direction is optional and wholly within the discretion of the
Sponsor) to dissolve the Trust and distribute the Subordinated
Debt Securities to Securityholders as provided in Section
9.04; and
(iii) the payment at maturity or redemption of all
of the Junior Subordinated Debt Securities, and the consequent
redemption of all of the Preferred Securities.
SECTION 9.03. Termination
The respective obligations and responsibilities of the Trust and the
Trustees created hereby shall terminate upon the latest to occur of the
following: (a) the distribution by the Institutional Trustee to Securityholders
upon the liquidation of the Trust pursuant to Section 9.04 or 9.05, or upon the
redemption of all of the Trust Securities pursuant to Section 4.04, of all
amounts or instruments required to be distributed hereunder upon the final
payment of the Trust Securities; (b) the payment of any expenses owed by the
Trust; and (c) the discharge of all administrative duties of the Regular
Trustees, including the performance of any tax reporting obligations with
respect to the Trust or the Securityholders.
SECTION 9.04. Liquidation
(a) If any Early Termination Event specified in clause
(ii) of Section 9.02 occurs, the Trust shall be liquidated and the Institutional
Trustee shall distribute the Subordinated Debt Securities to the Securityholders
as provided in this Section 9.04.
(b) In connection with a distribution of the Subordinated
Debt Securities, each Holder of Trust Securities shall be entitled to receive,
after the satisfaction of liabilities to creditors of the Trust (as evidenced by
a certificate of the Regular Trustees), a Like Amount of Subordinated Debt
Securities. Notice of liquidation shall be given by the Institutional Trustee by
first-class mail, postage prepaid, mailed not later than 30 nor more than 60
days prior to the Liquidation Date to each Holder of Trust Securities at such
Holder's address appearing in the Securities Register. All notices of
liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation
Date, the Trust Securities will no longer be deemed to be
Outstanding and any Trust Securities Certificates
52
not surrendered for exchange will be deemed to represent a
Like Amount of Subordinated Debt Securities; and
(iii) provide such information with respect to the
mechanics by which Holders may exchange Trust Securities
Certificates for Subordinated Debt Securities as the Regular
Trustees or the Institutional Trustee shall deem appropriate.
(c) In order to effect the liquidation of the Trust and
distribution of the Subordinated Debt Securities to Securityholders, the
Institutional Trustee shall establish a record date for such distribution (which
shall be not more than 45 days prior to the Liquidation Date) and, either itself
acting as exchange agent or through the appointment of a separate exchange
agent, shall establish such procedures as it shall deem appropriate to effect
the distribution of Subordinated Debt Securities in exchange for the Outstanding
Trust Securities Certificates.
(d) After the Liquidation Date, (i) the Trust Securities
will no longer be deemed to be Outstanding, (ii) certificates representing a
Like Amount of Subordinated Debt Securities will be issued to Holders of Trust
Securities Certificates, upon surrender of such certificates to the Regular
Trustees or their agent for exchange, (iii) any Trust Securities Certificates
not so surrendered for exchange will be deemed to represent a Like Amount of
Subordinated Debt Securities, accruing interest at the rate provided for in the
Subordinated Debt Securities from the last Distribution Payment Date on which a
Distribution was made on such Trust Certificates until such certificates are so
surrendered (and until such certificates are so surrendered, no payments of
interest or principal will be made to Holders of Trust Securities Certificates
with respect to such Subordinated Debt Securities) and (iv) all rights of
Securityholders holding Trust Securities will cease, except the right of such
Securityholders to receive Subordinated Debt Securities upon surrender of Trust
Securities Certificates.
(e) The Sponsor will use its best efforts to have the
Subordinated Debt Securities that are distributed in exchange for the Preferred
Securities to be listed on such securities exchange as the Preferred Securities
are then listed. The Sponsor may elect to have the Subordinated Debt Securities
issued in book-entry form to the Clearing Agency or its nominee pursuant to a
Certificate Depository Agreement.
SECTION 9.05. Bankruptcy
If an Early Termination Event specified in clause (i) of Section 9.02
has occurred, the Trust shall be liquidated. The Institutional Trustee shall
distribute the Subordinated Debt Securities to the Securityholders as provided
in Section 9.04, unless such distribution is determined by the Regular Trustees
not to be practical, in which event the Holders will be entitled to receive out
of the assets of the Trust available for distribution to Securityholders, after
satisfaction of liabilities to creditors, an amount equal to the Liquidation
Amount per Trust Security plus accrued and unpaid Distributions thereon to the
date of payment (such amount being the "Liquidation Distribution"). If such
Liquidation Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then, subject to the next succeeding sentence, the amounts payable
by the Trust on the Trust Securities shall be paid on a pro rata basis (based
upon Liquidation Amounts). The
53
Holder of the Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution, winding-up or termination pro rata
(determined as aforesaid) with Holders of Preferred Securities, except that, if
an Indenture Event of Default has occurred and is continuing, the Preferred
Securities shall have a priority over the Common Securities.
SECTION 9.06. Certificate of Cancellation
A Certificate of Cancellation ("Certificate") to terminate the Trust
(as permitted hereby) may be signed by any Regular Trustee, individually, in
such capacity so long as such Certificate fully complies with all legal
requirements.
ARTICLE X
REMARKETING PROCEDURES
SECTION 10.01. Election to Remarket
If the Company, and the Regular Trustees acting at the direction of the
Company, elect to conduct a Remarketing, the Trust, not less than 20 nor more
than 35 Business Days prior to the related Election Date, is required pursuant
to Section 4.02(b) to give the written notice of proposed Remarketing of the
Preferred Securities to the Clearing Agency, the Institutional Trustee, the
Indenture Trustee, the Remarketing Agent and the Calculation Agent. If the
Preferred Securities are not issued in global, fully registered form to the
Clearing Agency, such notice shall be delivered to the Holders instead of the
Clearing Agency. As required by Section 4.02(b), such notice will describe the
Remarketing and will indicate the length of the proposed new Fixed Rate Period,
the proposed Remarketing Date and any redemption provisions that will apply
during such new Fixed Rate Period. At any time prior to the Election Date, the
Company and the Regular Trustees may elect to terminate a Remarketing by giving
the Clearing Agency (or the Holders, as applicable), the Remarketing Agent, the
Institutional Trustee, the Indenture Trustee and the Calculation Agent written
notice of such termination.
SECTION 10.02. Notice of Election
(a) Not later than 4:00 P.M., New York City time, on an
Election Date, each Holder of Preferred Securities may give, through the
facilities of the Clearing Agency in the case of Book-Entry Preferred Securities
Certificates, a written notice to the Institutional Trustee of its election
("Notice of Election") (i) to retain and not to have all or any portion of the
Preferred Securities owned by it remarketed in the Remarketing or (ii) to tender
all or any portion of such Preferred Securities for purchase in the Remarketing
(such portion, in either case, is to be in the Liquidation Amount of $1,000 or
any integral multiple thereof). Any Notice of Election given to the
Institutional Trustee will be irrevocable and may not be conditioned upon the
level at which the Fixed Rate is established in the Remarketing. Promptly after
4:30 P.M., New York City time, on such Election Date, the Institutional Trustee,
based on the Notices of Election received by it through the Clearing Agency (or
from the Holders, if Definitive Preferred Securities Certificates have been
issued) prior to such time, will notify the Regular Trustees, the Company and
the Remarketing Agent of the number of Preferred Securities to be retained by
holders of
54
Preferred Securities and the number of Preferred Securities tendered for
purchase in the Remarketing.
(b) If any Holder of Preferred Securities gives a Notice
of Election to tender Preferred Securities as described in 10.02(a), the
Preferred Securities so subject to such Notice of Election will be deemed
tendered for purchase in the Remarketing, notwithstanding any failure by such
Holder to deliver or properly deliver such Preferred Securities to the
Remarketing Agent for purchase. If any Holder of Preferred Securities fails
timely to deliver a Notice of Election, as described above, such Preferred
Securities will be deemed tendered for purchase in such Remarketing,
notwithstanding such failure or the failure by such Holder to deliver or
properly deliver such Preferred Securities to the Remarketing Agent for
purchase.
(c) The right of each Holder of Preferred Securities to
have Preferred Securities tendered for purchase in the Remarketing shall be
limited to the extent that (i) the Remarketing Agent conducts a Remarketing
pursuant to the terms of the Remarketing Agreement, (ii) Preferred Securities
tendered have not been called for redemption, (iii) the Remarketing Agent is
able to find a purchaser or purchasers for tendered Preferred Securities at a
Fixed Rate and (iv) such purchaser or purchasers deliver the purchase price
therefor to the Remarketing Agent.
(d) Any Holder of Preferred Securities that desires to
continue to retain a number of Preferred Securities, but only if the Fixed Rate
is not less than a specified rate per annum, shall submit a Notice of Election
to tender such Preferred Securities pursuant to this Section 10.02 and
separately notify the Remarketing Agent of its interest at the telephone number
set forth in the notice of Remarketing delivered pursuant to Section 10.01. If
such Holder so notifies the Remarketing Agent, the Remarketing Agent will give
priority to such Holder's purchase of such number of Preferred Securities in the
Remarketing providing that the Fixed Rate is not less than such specified rate.
SECTION 10.03. Determination of Distribution Rate
(a) If Holders submit Notices of Election to retain all
of the Preferred Securities then outstanding, the Fixed Rate will be the rate
determined by the Remarketing Agent, in its sole discretion, as the rate that
would have been established had a Remarketing been held on the related
Remarketing Date.
(b) On any Remarketing Date on which the Remarketing is
to be conducted, the Remarketing Agent will use commercially reasonable efforts
to remarket, at a price equal to 100% of the Liquidation Amount thereof,
Preferred Securities tendered or deemed tendered for purchase. Except as
provided in Section 10.03(a), if, as a result of such efforts, on any
Remarketing Date, the Remarketing Agent has determined that it will be able to
remarket all Preferred Securities tendered or deemed tendered for purchase in
the Remarketing at a Fixed Rate and at a price of $1,000 per Preferred Security,
prior to 4:00 P.M., New York City time, on such Remarketing Date, the
Remarketing Agent will determine the Fixed Rate, which will be the rate per
annum (rounded to the nearest one-thousandth (0.001) of one percent per annum)
which the Remarketing Agent determines, in its sole judgment, to be the lowest
Fixed Rate per annum that will enable it to remarket all Preferred Securities
tendered or deemed tendered for
55
Remarketing at a price of $1,000 per Preferred Security. By approximately 4:30
P.M., New York City time, on a Remarketing Date, the Remarketing Agent shall
advise, by telephone, (i) the Clearing Agency, the Institutional Trustee, the
Indenture Trustee, the Trust, the Company and the Calculation Agent of any new
Fixed Rate established pursuant to the Remarketing and the number of remarketed
Preferred Securities sold in the Remarketing; (ii) each purchaser of a
remarketed Preferred Security (or the Clearing Agency Participant thereof) of
such new Fixed Rate and the number of remarketed Preferred Securities such
purchaser is to purchase; and (iii) each purchaser to give instructions to its
Clearing Agency Participant to pay the purchase price on the Remarketing
Settlement Date in same day funds against delivery of the remarketed Preferred
Securities purchased through the facilities of the Clearing Agency.
(c) If the Remarketing Agent is unable to remarket by
4:00 P.M., New York City time on the third Business Day prior to the Remarketing
Settlement Date, all Preferred Securities tendered or deemed tendered for a
purchase at a price of $1,000 per Preferred Security, the Distribution Rate for
the next Distribution Period shall be the Floating Rate and the new Distribution
Period shall be a Floating Rate Period. In such case, no Preferred Securities
will be sold in the Remarketing and each Holder will continue to hold its
Preferred Securities at such Floating Rate during such Floating Rate Period.
(d) All Preferred Securities tendered or deemed tendered
in the Remarketing will be automatically delivered to the account of the
Remarketing Agent through the facilities of the Clearing Agency against payment
of the purchase price therefor on the Remarketing Settlement Date. The
Remarketing Agent will make payment to the Clearing Agency Participant of each
tendering holder of Preferred Securities in the Remarketing through the
facilities of the Clearing Agency by the close of business on the Remarketing
Settlement Date.
In accordance with the Clearing Agency's normal procedures, on the
Remarketing Settlement Date, the transaction described above with respect to
each Preferred Security tendered for purchase and sold in the Remarketing will
be executed through the Clearing Agency Participants, will be debited and
credited and such Preferred Securities delivered by book entry as necessary to
effect purchases and sales of such Preferred Securities. The Clearing Agency is
expected to make payment in accordance with its normal procedures.
This Section 10.03(d) shall not apply if Definitive Preferred
Securities Certificates have been issued.
(e) If any Holder selling Preferred Securities in the
Remarketing fails to deliver such Preferred Securities, the Clearing Agency
Participant of such selling Holder and of any other person that was to have
purchased Preferred Securities in the Remarketing may deliver to any such other
person a number of Preferred Securities that is less than the number of
Preferred Securities that otherwise was to be purchased by such person. In such
event, the number of Preferred Securities to be so delivered will be determined
by such Clearing Agency Participant and delivery of such lesser number of
Preferred Securities will constitute good delivery. This paragraph shall not
apply if Definitive Preferred Securities Certificates have been issued.
56
(f) The Remarketing Agent is not obligated to purchase
any Preferred Securities that would otherwise remain unsold in a Remarketing.
Neither the Trust, any Trustee, the Company nor the Remarketing Agent shall be
obligated in any case to provide funds to make payment upon tender of Preferred
Securities for Remarketing.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Guarantee by the Sponsor
Subject to the terms and conditions hereof, the Sponsor, as obligor of
the Subordinated Debt Securities, irrevocably and unconditionally guarantees to
each Person to whom the Trust is now or hereafter becomes indebted or liable
(the "Beneficiaries") the full payment, when and as due, of any and all
Obligations (as hereinafter defined) to such Beneficiaries. As used herein,
"Obligations" means any indebtedness, expenses or liabilities of the Trust,
other than obligations of the Trust to pay to Holders of any Preferred
Securities, Common Securities or other similar interests in the Trust the
amounts due such Holders pursuant to the terms of the Preferred Securities,
Common Securities or such other similar interests, as the case may be. This
guarantee is intended to be for the benefit of, and to be enforceable by, all
such Beneficiaries, whether or not such Beneficiaries have received notice
hereof.
SECTION 11.02. Limitation of Rights of Securityholders
The death or incapacity of any Person having an interest, beneficial or
otherwise, in a Trust Security shall not operate to terminate this Declaration,
nor entitle the legal representatives or heirs of such Person or any
Securityholder for such Person, to claim an accounting, take any action or bring
any proceeding in and for a partition or winding up of the arrangements
contemplated hereby, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
SECTION 11.03. Amendment
(a) This Declaration may be amended from time to time by
the Institutional Trustee and the Holders of a Majority in Liquidation Amount of
the Common Securities, without the consent of any Holder of the Preferred
Securities (i) to cure any ambiguity, correct or supplement any provision herein
that may be defective or inconsistent with any other provision herein, or to
make other changes to the provisions with respect to matters or questions
arising under this Declaration; provided, however, that such amendment shall not
adversely affect in any material respect the interests of any Holder of Trust
Securities; (ii) to facilitate the tendering, remarketing and settlement of the
Preferred Securities, as herein contemplated; (iii) to modify, eliminate or add
to any provisions of this Declaration to such extent as shall be necessary to
ensure that the Trust will not be taxable other than as a grantor trust for
United States federal income tax purposes at any time that any Trust Securities
are Outstanding or to ensure that the Trust will not be required to register as
an investment company under the Investment Company Act; or (iv) in accordance
with the requirements of Section 8.11. Without limiting the generality of the
foregoing, if the Trust Indenture Act as in effect at the date of the execution
and delivery
57
of this Declaration or at any time thereafter shall be amended and (x) if any
such amendment shall require one or more changes to any provisions hereof or the
inclusion herein of any additional provisions, or shall by operation of law be
deemed to effect such changes or incorporate such provisions by reference or
otherwise, this Declaration shall be deemed to have been amended so as to
conform to such amendment to the Trust Indenture Act, and the Company and the
Trustees may, without the consent of any Holders, amend this Declaration to
evidence such amendment hereof; or (y) if any such amendment shall permit one or
more changes to, or the elimination of, any provisions hereof which, at the date
of the execution and delivery hereof or at any time thereafter, are required by
the Trust Indenture Act to be contained herein or are contained herein to
reflect any provisions of the Trust Indenture Act as in effect at such date,
this Declaration shall be deemed to have been amended to effect such changes or
elimination, and the Company and the Trustees may, without the consent of any
Holders, amend this Declaration to evidence such amendment.
(b) Except as provided in Section 11.03(c) hereof, any
provision of this Declaration may be amended by the Institutional Trustee and
the Holders of a Majority in Liquidation Amount of the Common Securities with
(i) the consent of Holders of at least a Majority in Liquidation Amount of the
Preferred Securities, and (ii) receipt by the Trustees of an Opinion of Counsel
to the effect that such amendment or the exercise of any power granted to the
Trustees in accordance with such amendment will not affect the Trust's being
taxable as a grantor trust for United States federal income tax purposes or the
Trust's exemption from status of an "investment company" under the Investment
Company Act.
(c) In addition to and notwithstanding any other
provision in this Declaration, without the consent of each affected
Securityholder, this Declaration may not be amended to (i) change the amount or
timing of any Distribution on the Trust Securities or otherwise adversely affect
the amount of any Distribution required to be made in respect of the Trust
Securities as of a specified date; (ii) restrict the right of a Securityholder
to institute suit for the enforcement of any such payment on or after such date;
or (iii) change the consent required pursuant to this Section 11.03.
(d) Notwithstanding any other provisions of this
Declaration, the Trustees shall not enter into or consent to any amendment to
this Declaration which would cause the Trust to fail or cease to qualify for the
exemption from status of an "investment company" under the Investment Company
Act of 1940, as amended, afforded by Rule 3a-5 thereunder.
(e) Without the consent of the Sponsor, the Calculation
Agent or the Remarketing Agent, this Declaration may not be amended in a manner
which imposes any additional obligation on the Sponsor, the Calculation Agent or
the Remarketing Agent, as the case may be. Notwithstanding any other provisions
of this Declaration, the consent of the Delaware Trustee shall be required to
amend any provision of, or add any provision to, this Declaration which affects
the Delaware Trustee's rights, duties, immunities, liabilities or otherwise. In
executing any amendment permitted by this Declaration, the Trustees shall be
entitled to receive, and (subject to Section 8.01) shall be fully protected in
relying upon an Officer's Certificate and an Opinion of Counsel stating that the
execution of such amendment is authorized or permitted by this Declaration. Any
Trustee may, but shall not be obligated to,
58
enter into any such amendment which affects such Trustee's own rights, duties,
immunities or liabilities under this Declaration or otherwise.
(f) In the event that any amendment to this Declaration
is made, the Regular Trustees shall promptly provide to the Sponsor a copy of
such amendment.
SECTION 11.04. Separability
In case any provision in this Declaration or in the Trust Securities
Certificates shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 11.05. Governing Law
THIS DECLARATION AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS DECLARATION AND
THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF DELAWARE.
SECTION 11.06. Successors
This Declaration shall be binding upon and shall inure to the benefit
of any successor to both the Trust and the Trustees, including any successor by
operation of law.
SECTION 11.07. Headings
The Article and Section headings are for convenience only and shall not
affect the construction of this Declaration.
SECTION 11.08. Notice and Demand
Any notice, demand or other communication which by any provision of
this Declaration is required or permitted to be given or served to or upon any
Securityholder or the Sponsor may be given or served in writing by deposit
thereof, first-class postage prepaid, in the United States mail, hand delivery
or facsimile transmission, in each case, addressed, (i) in the case of a Holders
of Preferred Securities, to such Holders of Preferred Securities as such
Securityholder's name and address appear on the Securities Register and, (ii) in
the case of the Holders of Common Securities or the Sponsor, to Avista
Corporation, 1411 East Mission Avenue, Spokane, Washington 99202, Attention:
Treasurer, Facsimile No. (509) 495-4361, or to such other address as the Holders
of Common Securities or the Sponsor may give notice of to the Institutional
Trustee and the Delaware Trustee. Such notice, demand or other communication to
or upon a Securityholder shall be deemed to have been sufficiently given or
made, for all purposes, upon hand delivery, mailing or transmission.
Any notice, demand or other communication which by any provision of
this Declaration is required or permitted to be given or served to or upon the
Trust or the Trustees shall be given in writing addressed as follows: (i) with
respect to the Institutional Trustee and the Delaware
59
Trustee, Union Bank of California, N.A., 475 Sansome Street, 12th Floor, San
Francisco, California 94111, Attention: Corporate Trust Services, Facsimile No.
(415) 296-6754; SunTrust Delaware Trust Company, 1011 Centre Road, Suite 108,
Wilmington, Delaware 19805, Attention: Corporate Trust Department, Facsimile No.
(302) 892-9943 (with a copy to SunTrust Bank, 225 East Robinson Street, Suite
250, Orlando, Florida 32801, Attention: Corporate Trust Department), as the case
may be, or to such other address as the Institutional Trustee or the Delaware
Trustee may give notice of to the Sponsor; and (ii) with respect to the Regular
Trustees, to them at the address above for notices to the Sponsor, marked
Attention: Regular Trustees of AVA Capital Trust III, c/o Treasurer. Such
notice, demand or other communication to or upon the Trust or the Trustees shall
be deemed to have been sufficiently given or made only upon actual receipt of
the writing by the applicable Trustee.
Any notice, demand or other communication which by any provision of
this Declaration is required or permitted to be served upon the Calculation
Agent or the Remarketing Agreement shall be given in accordance with the
Calculation Agent Agreement or the Remarketing Agreement, respectively.
SECTION 11.09. Agreement Not to Petition
Each of the Trustees and the Sponsor agrees for the benefit of the
Securityholders that, until at least one year and one day after the Trust has
been terminated in accordance with Article IX, it shall not file, or join in the
filing of, a petition against the Trust under any bankruptcy, reorganization,
arrangement, insolvency, liquidation or other similar law (including, without
limitation, the United States Bankruptcy Code) (collectively, "Bankruptcy Laws")
or otherwise join in the commencement of any proceeding against the Trust under
any Bankruptcy Law. In the event the Sponsor takes action in violation of this
Section 11.09, the Institutional Trustee agrees, for the benefit of
Securityholders, that it shall file an answer with the bankruptcy court or
otherwise properly contest the filing of such petition by the Sponsor against
the Trust or the commencement of such action and raise the defense that the
Sponsor has agreed in writing not to take such action and should be stopped and
precluded therefrom and such other defenses, if any, as counsel for the Trustees
or the Trust may assert. The provisions of this Section 11.09 shall survive the
termination of this Declaration.
SECTION 11.10. Conflict with Trust Indenture Act
(a) This Declaration is subject to the provisions of the
Trust Indenture Act that are required to be part of this Declaration and shall,
to the extent applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee
which is a Trustee for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or
conflicts with another provision hereof which is required to be included in this
Declaration by any of the provisions of the Trust Indenture Act, such required
provision shall control.
60
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Trust Securities as equity
securities representing undivided beneficial interests in the assets of the
Trust.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN
BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS DECLARATION AND
AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND
THE SUBORDINATED INDENTURE AND THE AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER
AND SUCH OTHERS THAT THOSE TERMS AND PROVISIONS SHALL BE BINDING, OPERATIVE AND
EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS.
61
IN WITNESS WHEREOF, the parties hereto have executed this Declaration or have
caused this Declaration to be executed on their behalf, all as of the day and
year first above written.
AVISTA CORPORATION,
as Sponsor
By: /s/ Diane C. Thoren
---------------------------------------
Name: Diane C. Thoren
Title: Assistant Treasurer
UNION BANK OF CALIFORNIA, N.A.,
as Institutional Trustee
By: /s/ Sonia N. Flores
---------------------------------------
Name: Sonia N. Flores
Title: Vice President
SUNTRUST DELAWARE TRUST COMPANY,
as Delaware Trustee
By: /s/ Susan D. Tinsley
---------------------------------------
Name: Susan D. Tinsley
Title: Trust Officer
/s/ Malyn K. Malquist
--------------------------------------------
Malyn K. Malquist
as Regular Trustee
/s/ Diane C. Thoren
--------------------------------------------
Diane C. Thoren
as Regular Trustee
EXHIBIT A
This Security is a Global Certificate within the meaning of the
Declaration hereinafter referred to and is registered in the name of the
Depository Trust Company ("DTC") or a nominee of DTC. This Security is
exchangeable for Securities registered in the name of a person other than DTC or
its nominee only in the limited circumstances described in the Declaration and
no transfer of this Security (other than a transfer of this Security as a whole
by DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of
DTC) may be registered except in limited circumstances.
Unless this certificate is presented by an authorized representative of
DTC, to AVA Capital Trust III or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an authorized representative
of DTC (and any payment made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), any transfer, pledge or other
use hereof for value or otherwise by or to any person is wrongful inasmuch as
the registered owner thereof, Cede & Co., has an interest herein.*
Certificate Number Number of Preferred Securities
____________
P-_ CUSIP NO. _____
Certificate Evidencing Preferred Securities
of
AVA Capital Trust III
Flexible Trust Preferred Securities
(Five Year Initial Fixed Rate Period)
(Liquidation Amount $1,000 per Preferred Security)
AVA Capital Trust III, a statutory trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that Cede & Co.*
(the "Holder") is the registered owner of _____ (_______) preferred securities
of the Trust representing undivided beneficial interests in the assets of the
Trust and designated the AVA Capital Trust III Flexible Trust Preferred
Securities (Five Year Initial Fixed Rate Period) (Liquidation Amount $1,000 per
Preferred Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer as provided in Section 5.04 of the Declaration (as
defined below). The designations, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities are set forth in, and
this certificate and the Preferred Securities represented hereby are issued and
shall in all respects be subject to the terms and provisions of, the Amended and
Restated Declaration of Trust of the Trust, dated as of April 5, 2004, as the
same may be amended from time to time (the "Declaration"), including the
designation of the terms of Preferred Securities as set forth therein. The
holder of this certificate
A-1
is entitled to the benefits of a guarantee by Avista Corporation, a Washington
corporation (the "Company"), pursuant to a Guarantee Agreement between the
Company and Union Bank of California, N.A., as guarantee trustee, dated as of
April 5, 2004, as the same may be amended from time to time (the "Guarantee"),
to the extent provided therein. The Trust will furnish a copy of the Declaration
and the Guarantee to the holder of this certificate without charge upon written
request to the Trust at its principal place of business or registered office.
Upon receipt of this certificate, the holder of this certificate is
bound by the Declaration and is entitled to the benefits thereunder.
*Insert in Book-Entry Preferred Securities Certificates only
IN WITNESS WHEREOF, the Trust has executed this certificate this ____
day of _______, 2004.
AVA CAPITAL TRUST III
By:____________________________________
_______________,
As Regular Trustee
CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
_______________________________________
as Institutional Trustee
A-2
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security to:
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
agent to transfer this Preferred Securities Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date:
-----------------------------------------------------
Signature:
-----------------------------------------------------
(Sign exactly as your name appears on the other side of this Preferred
Securities Certificate)
A-3
EXHIBIT B
AGREEMENT AS TO EXPENSES AND LIABILITIES
THIS AGREEMENT AS TO EXPENSES AND LIABILITIES (this "Agreement") is
made as of April 5, 2004, between Avista Corporation, a Washington corporation
(the "Company"), and AVA Capital Trust III, a Delaware statutory trust (the
"Trust").
WHEREAS, the Trust intends to issue its Common Securities (the "Common
Securities and its AVA Capital Trust III Flexible Trust Preferred Securities
(the "Preferred Securities"), with such powers, preferences and special rights
and restrictions as are set forth in the Amended and Restated Declaration of
Trust of the Trust dated as of April 5, 2004 as the same may be amended from
time to time (the "Declaration"), and with the proceeds thereof to purchase from
the Company its Subordinated Debt Securities, Series due 2034 (the "Subordinated
Debt Securities"); and
NOW, THEREFORE, in consideration of the purchase by each holder of the
Preferred Securities, which purchase the Company hereby agrees shall benefit the
Company and which purchase the Company acknowledges will be made in reliance
upon the execution and delivery of this Agreement, the Company and the Trust
hereby agree as follows:
ARTICLE I
Section 1.01. Agreement of the Company. Subject to the terms and
conditions hereof, the Company hereby irrevocably and unconditionally agrees
with the Trust, and with each person or entity to whom the Trust is now or
hereafter becomes indebted or liable (the "Beneficiaries"), that the Company
shall make full payment, when and as due, of any and all Expenses (as
hereinafter defined) to such Beneficiaries and shall reimburse the Trust for any
Expenses paid by it. As used herein, "Expenses" means any expenses, indebtedness
or liabilities of the Trust, including, without limitation, any and all taxes,
duties, assessments or other governmental charges of whatever nature (other than
United States federal withholding taxes) imposed by the United States or any
other taxing authority; it being understood (a) that "Expenses" shall not be
deemed to include amounts to be distributed to the holders of the Common
Securities and the Preferred Securities pursuant to the terms thereof and (b)
that the intention of this covenant is that the net amounts received and
retained by the Trust after paying all Expenses will be equal to the amounts the
Trust would have received and retained had no such Expenses been incurred by or
imposed on the Trust. This Agreement is intended to be for the benefit of, and
to be enforceable by, the Trust and by all such Beneficiaries, whether or not
such Beneficiaries have received notice hereof.
Section 1.02. Term of Agreement. This Agreement shall terminate and be
of no further force and effect upon the date on which there are no Beneficiaries
remaining; provided, however, that this Agreement shall continue to be effective
or shall be reinstated, as the case may be, if at any time any holder of
Preferred Securities or any Beneficiary must restore payment of any sums paid
under the Preferred Securities, any Expense, any sums paid under the Guarantee
Agreement dated
B-1
the date hereof by the Company and Union Bank of California,
N.A., as guarantee trustee, or under this Agreement for any reason whatsoever.
This Agreement is continuing, irrevocable, unconditional and absolute.
Section 1.03. Waiver of Notice. The Company hereby waives notice of
acceptance of this Agreement and of any payment of Expenses to which it applies
or may apply, and the Company hereby waives presentment, demand for payment,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
Section 1.04. No Impairment. The obligations, covenants, agreements and
duties of the Company under this Agreement shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the extension of time for the payment by the Trust of
all or any portion of the Expenses or for the performance of any other
obligation under, arising out of, or in connection with, the Expenses;
(b) any failure, omission, delay or lack of diligence on
the part of the Beneficiaries to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Beneficiaries with respect
to the Expenses or any action on the part of the Trust granting
indulgence or extension of any kind; or
(c) the voluntary or involuntary liquidation,
dissolution, sale of any collateral, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of debt of, or other similar
proceedings affecting, the Trust or any of the assets of the Trust.
There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, the Company with respect to the happening of any of the
foregoing.
Section 1.05. Enforcement. A Beneficiary may enforce this Agreement
directly against the Company and the Company waives any right or remedy to
require that any action be brought against the Trust or any other person or
entity before proceeding against the Company.
ARTICLE II
Section 2.01. Binding Effect. All guarantees and agreements contained
in this Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Company and shall inure to the benefit of the
Beneficiaries.
Section 2.02. Amendment. So long as there remains any Beneficiary or
any Preferred Securities of any series are outstanding, this Agreement shall not
be modified or amended in any manner adverse to such Beneficiary or to the
holders of the Preferred Securities.
Section 2.03. Notices. Any notice, request or other communication
required or permitted to be given hereunder shall be given in writing by
delivering the same against receipt therefor by
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facsimile transmission (confirmed by mail), telex or by registered or certified
mail, addressed as follows (and if so given, shall be deemed given when mailed
or upon receipt of an answer-back, if sent by telex), to-wit:
AVA Capital Trust III
c/o Union Bank of California, N.A.
475 Sansome Street, 12th Floor
San Francisco, California 94111
Facsimile No.: (415) 296-6757
Attention: Corporate Trust Services
Avista Corporation
1411 East Mission Avenue
Spokane, Washington 99202
Facsimile No.: (509) 482-4879
Attention: Treasurer
Section 2.04. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
THIS AGREEMENT is executed as of the date and year first above written.
AVISTA CORPORATION
By: ________________________________________
Name:
Title:
AVA CAPITAL TRUST III
By: ________________________________________
_____________
as Regular Trustee
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EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS PROVIDED IN THE
DECLARATION OF TRUST REFERRED TO HEREIN
Certificate Number C-1 Number of Common Securities
_________________
Certificate Evidencing Common Securities
of
AVA Capital Trust III
Common Securities
(Liquidation Amount $1,000 per Common Security)
AVA Capital Trust III, a statutory trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that Avista Corporation (the
"Holder") is the registered owner of _____________ (_______) common securities
of the Trust representing undivided beneficial interests in the assets of the
Trust and designated the AVA Capital Trust III Common Securities (Liquidation
Amount $1,000 per Common Security) (the "Common Securities"). In accordance with
Section 5.10 of the Declaration (as defined below), the Common Securities are
not transferable, except as permitted by the Declaration referred to herein,
and, to the fullest extent permitted by law, any attempted transfer hereof shall
be void. The designations, rights, privileges, restrictions, preferences and
other terms and provisions of the Common Securities are set forth in, and this
certificate and the Common Securities represented hereby are issued and shall in
all respects be subject to the terms and provisions of, the Amended and Restated
Declaration of Trust of the Trust dated as of April 5, 2004, as the same may be
amended from time to time (the "Declaration"), including the designation of the
terms of the Common Securities as set forth therein. The holder of this
certificate is entitled to the benefits of a guarantee by Avista Corporation, a
Delaware corporation (the "Company"), pursuant to a Guarantee Agreement between
the Company and Union Bank of California, N.A., as guarantee trustee, dated as
of April 5, 2004, as the same may be amended from time to time (the
"Guarantee"), to the extent provided therein. The Trust will furnish a copy of
the Declaration and the Guarantee to the Holder without charge upon written
request to the Trust at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trust has executed this certificate this ____
day of __________, 2004.
AVA Capital Trust III
By: ________________________________________
_____________,
as Regular Trustee
CERTIFICATE OF AUTHENTICATION
This is one of the Common Securities referred to in the within-mentioned
Declaration.
____________________________________________
as Institutional Trustee
C-1