EXHIBIT 4.4
EXECUTION COPY
- --------------------------------------------------------------------------------
AMENDED AND RESTATED
TRUST AGREEMENT
AMONG
INTEGON CORPORATION, AS DEPOSITOR,
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
AS PROPERTY TRUSTEE,
FIRST UNION BANK OF DELAWARE,
AS DELAWARE TRUSTEE,
AND
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
DATED AS OF FEBRUARY 10, 1997
INTEGON CAPITAL I
- --------------------------------------------------------------------------------
INTEGON CAPITAL I
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Trust Agreement
Act Section Section
- ---------------------- ---------------
((S)) 310 (a)(1)..................... 8.7
(a)(2)..................... 8.7
(a)(3)..................... 8.9
(a)(4)..................... 2.7(a)(ii)
(b)........................ 8.8
((S)) 311 (a)........................ 8.13
(b)........................ 8.13
((S)) 312 (a)........................ 5.7
(b)........................ 5.7
(c)........................ 5.7
((S)) 313 (a)........................ 8.14(a)
(a)(4)..................... 8.14(b)
(b)........................ 8.14(b)
(c)........................ 11.9
(d)........................ 8.14(b)
((S)) 314 (a)........................ 8.15
(b)........................ Not Applicable
(c)(1)..................... 8.16
(c)(2)..................... 8.16
(c)(3)..................... Not Applicable
(d)........................ Not Applicable
(e)........................ 1.1, 8.16
((S)) 315 (a)........................ 8.1(a), 8.3(a)
(b)........................ 8.2, 11.9
(c)........................ 8.1(a)
(d)........................ 8.1, 8.3
(e)........................ Not Applicable
((S)) 316 (a)........................ Not Applicable
(a)(1)(A).................. Not Applicable
(a)(1)(B).................. Not Applicable
(a)(2)..................... Not Applicable
(b)........................ 5.14
(c)........................ 6.7
Trust Indenture Trust Agreement
Act Section Section
- ---------------------- ---------------
((S)) 317 (a)(1)..................... Not Applicable
(a)(2)..................... Not Applicable
(b)........................ 5.9
((S)) 318 (a)........................ 11.11
- ------------
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed
to be a part of the Trust Agreement.
TABLE OF CONTENTS
ARTICLE I Defined Terms................................................................................................. 1
Section 1.1 Definitions.................................................................................................... 2
ARTICLE II Continuation of the Trust..................................................................................... 13
Section 2.1 Name........................................................................................................... 13
Section 2.2 Office of the Delaware Trustee; Principal Place of Business.................................................... 13
Section 2.3 Initial Contribution of Trust Property; Organizational Expenses................................................ 13
Section 2.4 Issuance of the Capital Securities............................................................................. 13
Section 2.5 Issuance of the Common Securities; Subscription and Purchase
of Debentures................................................................................................. 14
Section 2.6 Declaration of Trust........................................................................................... 14
Section 2.7 Authorization to Enter into Certain Transactions............................................................... 15
Section 2.8 Assets of Trust................................................................................................ 19
Section 2.9 Title to Trust Property........................................................................................ 19
ARTICLE III Payment Account............................................................................................... 19
Section 3.1 Payment Account................................................................................................ 19
ARTICLE IV Distributions; Redemption..................................................................................... 19
Section 4.1 Distributions.................................................................................................. 19
Section 4.2 Redemption..................................................................................................... 21
Section 4.3 Subordination of Common Securities............................................................................. 23
Section 4.4 Payment Procedures............................................................................................. 23
Section 4.5 Tax Returns and Reports........................................................................................ 24
Section 4.6 Payment of Taxes, Duties, Etc. of the Issuer Trust............................................................. 24
Section 4.7 Payments under Indenture or Pursuant to Direct Actions......................................................... 24
ARTICLE V Trust Securities Certificates................................................................................. 25
Section 5.1 Initial Ownership.............................................................................................. 25
Section 5.2 The Trust Securities Certificates.............................................................................. 25
Section 5.3 Execution and Delivery of Trust Securities Certificates........................................................ 25
Section 5.4 Capital Securities.............................................................................................. 26
Section 5.5 Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates............................................. 27
Section 5.6 Persons Deemed Securityholders................................................................................. 27
Section 5.7 Access to List of Securityholders' Names and Addresses......................................................... 28
Section 5.8 Maintenance of Office or Agency................................................................................ 28
Section 5.9 Appointment of Paying Agent.................................................................................... 28
Section 5.10 Ownership of Common Securities by Depositor;
Common Securities Certificate..................................................................................... 29
Section 5.11 Registration of Transfer and Exchange of Securities Certificates.............................................. 29
Section 5.12 Notices to Depository......................................................................................... 36
Section 5.13 Definitive Capital Securities Certificates.................................................................... 37
Section 5.14 Rights of Securityholders..................................................................................... 37
-i-
Section 5.15 CUSIP Numbers 40
ARTICLE VI Acts of Securityholders; Meetings; Voting.................................................................. 40
Section 6.1 Limitations on Voting Rights................................................................................... 40
Section 6.2 Notice of Meetings............................................................................................. 41
Section 6.3 Meetings of Capital Securityholders............................................................................ 41
Section 6.4 Voting Rights.................................................................................................. 42
Section 6.5 Proxies, etc................................................................................................... 42
Section 6.6 Securityholder Action by Written Consent....................................................................... 42
Section 6.7 Record Date for Voting and Other Purposes...................................................................... 43
Section 6.8 Acts of Securityholders........................................................................................ 43
Section 6.9 Inspection of Records.......................................................................................... 44
Section 6.10 Reports to Holders of Capital Securities...................................................................... 44
ARTICLE VII Representations and Warranties............................................................................. 44
Section 7.1 Representations and Warranties of the Property Trustee and
the Delaware Trustee................................................................................................. 44
Section 7.2 Representations and Warranties of Depositor.................................................................... 46
ARTICLE VIII The Trustees............................................................................................... 46
Section 8.1 Certain Duties and Responsibilities............................................................................ 46
Section 8.2 Certain Notices................................................................................................ 48
Section 8.3 Certain Rights of Property Trustee............................................................................. 48
Section 8.4 Not Responsible for Recitals or Issuance of Securities......................................................... 50
Section 8.5 May Hold Securities............................................................................................ 51
Section 8.6 Compensation; Indemnity; Fees.................................................................................. 51
Section 8.7 Corporate Property Trustee Required; Eligibility of Trustees................................................... 52
Section 8.8 Conflicting Interests.......................................................................................... 53
Section 8.9 Co-Trustees and Separate Trustee............................................................................... 53
Section 8.10 Resignation and Removal; Appointment of Successor............................................................. 54
Section 8.11 Acceptance of Appointment by Successor........................................................................ 56
Section 8.12 Merger, Conversion, Consolidation or Succession to Business................................................... 56
Section 8.13 Preferential Collection of Claims Against Depositor or Trust.................................................. 57
Section 8.14 Reports by Property Trustee................................................................................... 57
Section 8.15 Reports to the Property Trustee............................................................................... 58
Section 8.16 Evidence of Compliance with Conditions Precedent.............................................................. 58
Section 8.17 Number of Trustees............................................................................................ 58
Section 8.18 Delegation of Power........................................................................................... 59
ARTICLE IX Termination, Liquidation and Merger........................................................................ 59
Section 9.1 Termination Upon Expiration Date............................................................................... 59
Section 9.2 Early Termination.............................................................................................. 59
Section 9.3 Termination.................................................................................................... 60
Section 9.4 Liquidation.................................................................................................... 60
-ii-
Section 9.5 Mergers, Consolidations, Amalgamations or Replacements of
the Trust 62
ARTICLE X Repurchase Upon Change of Control........................................................................... 63
Section 10.1 Repurchase.................................................................................................... 63
Section 10.2 Repurchase Procedures......................................................................................... 64
Section 10.3 Repurchase of Common Securities............................................................................... 66
ARTICLE XI Miscellaneous Provisions.................................................................................... 66
Section 11.1 Limitation of Rights of Securityholders....................................................................... 66
Section 11.2 Liability of the Common Securityholder........................................................................ 67
Section 11.3 Amendment..................................................................................................... 67
Section 11.4 Separability.................................................................................................. 68
Section 11.5 Governing Law................................................................................................. 68
Section 11.6 Payments Due on Non-Business Day.............................................................................. 69
Section 11.7 Successors.................................................................................................... 69
Section 11.8 Headings...................................................................................................... 69
Section 11.9 Reports, Notices and Demands.................................................................................. 69
Section 11.10 Agreement Not to Petition.................................................................................... 70
Section 11.11 Trust Indenture Act; Conflict with Trust Indenture Act....................................................... 70
Section 11.12 Acceptance of Terms of Trust Agreement, Guarantee
and Indenture................................................................................................ 71
Section 11.13 Counterparts................................................................................................. 71
-iii-
AMENDED AND RESTATED TRUST AGREEMENT, dated as of February 10, 1997, among
(i) Integon Corporation, a Delaware corporation (including any successors or
assigns, the "Depositor"), (ii) First Union National Bank of North Carolina, a
national banking association organized and existing under the laws of the United
States of America, as property trustee (in each such capacity, the "Property
Trustee" and, in its separate corporate capacity and not in its capacity as
Property Trustee, the "Bank"), (iii) First Union Bank of Delaware, a banking
corporation organized under the laws of the State of Delaware, as Delaware
trustee (the "Delaware Trustee"), (iv) John B. Yorke, Donald F. McKee and
Steven C. Andrews, each an individual whose address is c/o Integon Corporation,
500 West Fifth Street, Winston-Salem, North Carolina 27152 (each an
"Administrative Trustee" and, collectively, the "Administrative Trustees") (the
Property Trustee, the Delaware Trustee and the Administrative Trustees are
referred to collectively herein as the "Trustees") and (v) the several Holders,
as hereinafter defined.
Witnesseth
Whereas, the Depositor, one of the Administrative Trustees and the Delaware
Trustee have heretofore duly declared and established a business trust pursuant
to the Delaware Business Trust Act by the entering into that certain Trust
Agreement, dated as of January 27, 1997 (the "Original Trust Agreement"), and by
the execution and filing with the Secretary of State of the State of Delaware of
the Certificate of Trust, filed on January 27, 1997, attached hereto as Exhibit
A (the "Certificate of Trust"); and
Whereas, the Depositor and the Trustees desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (i) the issuance of the Common Securities by the Trust to
the Depositor, (ii) the issuance and sale of the Capital Securities by the Trust
pursuant to the Purchase Agreement and (iii) the acquisition by the Trust from
the Depositor of all of the right, title and interest in the Debentures;
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
Trust Agreement in its entirety and agrees as follows:
2
ARTICLE I
Defined Terms
Section 1.1 Definitions.
For all purposes of this Trust Agreement, 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 Trust
Agreement; and
(d) the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Trust Agreement as a whole and not to any particular
Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.8.
"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, the amount of Additional Interest paid
by the Depositor on a Like Amount of Debentures for such period.
"Additional Interest" has the meaning specified in Section 1.1 of the
Indenture.
"Additional Sums" has the meaning specified in Section 10.6 of the
Indenture.
"Administrative Trustees" means each individual identified as an
"Administrative Trustee" in the preamble to this Trust Agreement solely in such
individual's capacity as Administrative Trustee of the Trust continued hereunder
and not in such individual's individual capacity, or such Administrative
Trustee's successor in interest in such capacity, or any successor trustee
appointed as herein provided.
"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
3
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 Trust Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in the
premises judging such Person a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjudication or
composition of or in respect of such Person under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law, or appointing
a receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of such Person or of any substantial part of its property or ordering
the winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days; or
(b) 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 consent seeking reorganization or relief under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or similar official) of
such Person or of any substantial part of its property, or the making by it of
an assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due and its willingness
to be adjudicated a bankrupt, or the taking of corporate action by such Person
in furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 11.10.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Depositor to have been duly adopted by the
Depositor's Board of Directors, or such committee of the Board of Directors or
officers of the Depositor to which authority to act on behalf of the Board of
Directors has been delegated, and to be in full force and effect on the date of
such certification, and delivered to the Trustees.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a day
on which banking institutions in The City of New York are authorized or required
by law or executive order to remain closed, or (c) a day on which the Property
Trustee's Corporate Trust Office or the Corporate Trust Office of the Debenture
Trustee is closed for business.
4
"Capital Securities Certificate" means a certificate evidencing ownership
of (i) Initial Capital Securities, substantially in the form attached as Exhibit
B-1 or (ii) Exchange Capital Securities, substantially in the form attached as
Exhibit B-2, as the context may require.
"Capital Security" means any one of the Initial Capital Securities and,
when and if issued as provided in the Exchange and Registration Rights
Agreement, any one of the Exchange Capital Securities.
"Certificate of Depository Agreement" means the Letter of Representations
among the Trust, the Depositor and The Depository Trust Company, as the initial
Depository, dated the Closing Date, relating to the Capital Securities
Certificates, substantially in the form attached as Exhibit C, as the same may
be amended and supplemented from time to time.
"Certificate of Trust" has the meaning specified in the recitals hereof, as
amended from time to time.
"Change of Control" means the occurrence of one or more of the following
events (whether or not approved by the Board of Directors of the Depositor): (a)
an event or series of events by which any Person or group of Persons within the
meaning of Section 13(d) of the Exchange Act shall, as a result of a tender or
exchange offer, open market purchases, privately negotiated purchases, merger,
consolidation, issuances of securities by the Depositor or otherwise, be or
become, directly or indirectly, the beneficial owner (within the meaning of Rule
13d-3 and Rule 13d-5 under the Exchange Act, whether or not applicable, except
that a Person shall be deemed to have "beneficial ownership" of all securities
that such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time) of 50% or more of the combined
voting power of the then outstanding voting stock of the Depositor, (b) the
first day on which a majority of the members of the Board of Directors of the
Depositor are not Continuing Directors, (c) the stockholders of the Depositor
shall approve any plan or proposal for the liquidation or dissolution of the
Depositor or (d) the direct or indirect sale, assignment, lease, exchange,
disposition or other transfer, in one transaction or a series of related
transactions, of all or substantially all of the property or assets of the
Depositor to any Person.
"Change of Control Notice" has the meaning specified in Section 10.1.
"Closing Date" means February 10, 1997.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, or, if at any time after the execution of this instrument such
Commission is not
5
existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Common Securities Certificate" means a certificate evidencing ownership of
Common Securities, substantially in the form attached as Exhibit D.
"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 Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.
"Continuing Director" means any member of the Board of Directors of the
Depositor who was a member of such Board of Directors on the date of original
issuance of the Capital Securities, and, as of any determination date
thereafter, shall include any member of the Board of Directors of the Depositor
who was nominated for election or appointed to such Board of Directors with the
affirmative vote of a majority of the Continuing Directors who were members of
such Board of Directors at the time of such nomination or appointment.
"Corporate Trust Office" means (i) when used with respect to the Property
Trustee, the principal corporate trust office of the Property Trustee located in
Charlotte, North Carolina, and (ii) when used with respect to the Debenture
Trustee, the principal office of the Debenture Trustee located in Charlotte,
North Carolina.
"Debentures" means the Depositor's 10 3/4% Junior Subordinated Deferrable
Interest Debentures, Series A, issued pursuant to the Indenture, and, when and
if issued as contemplated by the Exchange and Registration Rights Agreement, the
Depositor's new series of 10 3/4% Junior Subordinated Deferrable Interest
Debentures, to be issued in exchange therefor.
"Debenture Event of Default" means an "Event of Default" as defined in the
Indenture.
"Debenture Maturity Date" means the date specified pursuant to the terms of
the Debentures as the date on which the principal of the Debentures is due and
payable, as such date may be shortened pursuant to the terms of the Debentures.
"Debenture Redemption Date" means, with respect to any Debenture to be
redeemed under the Indenture, the date fixed for redemption under the Indenture.
"Debenture Trustee" means First Union National Bank of North Carolina, a
national banking association organized and existing under the laws of the United
States of America, as trustee under the Indenture, and any successor trustee
appointed as provided therein.
6
"Definitive Capital Security" means a beneficial interest in the Definitive
Capital Securities Certificates.
"Definitive Capital Securities Certificates" means either or both (as the
context requires) of (a) Capital Securities Certificates in the form of Exhibit
B-1 or B-2 hereto that do not include the information called for by footnote 1
thereof, and (b) Capital Securities Certificates issued in certificated, fully
registered form as provided in Section 5.13.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C. (S) 3801, et seq., as it may be amended from time to time.
"Delaware Trustee" means the Person identified as the "Delaware Trustee" in
the preamble to this Trust Agreement solely in its capacity as Delaware Trustee
of the Trust continued hereunder and not in its individual capacity, or its
successor in interest in such capacity, or any successor trustee appointed as
herein provided.
"Depositor" has the meaning specified in the preamble to this Trust
Agreement.
"Depository" means an organization registered as a "Depository" pursuant to
Section 17A of the Exchange Act. The Depository Trust Company will be the
initial Depository.
"Depository Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Depository effects
global transfers and pledges of securities deposited with the Depository.
"Distribution Date" has the meaning specified in Section 4.1(a).
"Distributions" means amounts payable in respect of the Trust Securities as
provided in Section 4.1.
"Early Termination Event" has the meaning specified in Section 9.2.
"Electing Holders" has the meaning specified in Section 10.2.
"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 a Debenture Event of Default; or
7
(b) default by the Property Trustee in the payment of any Distribution
when it becomes due and payable, and continuation of such default for a period
of 30 days; or
(c) default by the Property Trustee in the payment of any Redemption Price
or Repurchase Price of any Trust Security when such price becomes due and
payable; or
(d) default in the performance, or breach, in any material respect, of any
covenant or warranty of the Trustees in this Trust Agreement (other than a
covenant or warranty a default in the performance or breach of which is dealt
with in clause (b) or (c) above) and continuation of such default or breach for
a period of 90 days after there has been given, by registered or certified mail,
to the defaulting Trustee or Trustees by the Holders of at least 25% in
aggregate Liquidation Amount of the Outstanding Capital 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; or
(e) the occurrence of a Bankruptcy Event with respect to the Property
Trustee and the failure by the Depositor to appoint a successor Property Trustee
within 90 days thereof.
"Exchange Act" means the Securities Exchange Act of 1934, and any statute
successor thereto, in each case, as amended from time to time, and the rules and
regulations promulgated thereunder.
"Exchange and Registration Rights Agreement" means the Exchange and
Registration Rights Agreement dated as of February 10, 1997 among the Initial
Purchasers, the Depositor and the Trust, as such agreement may be amended,
modified or supplemented from time to time in accordance with the terms thereof
"Exchange Capital Security" means an undivided beneficial preferred
interest in the assets of the Trust, having a Liquidation Amount of $1,000 and
having the rights provided therefor in this Trust Agreement, including the right
to receive Distributions and a Liquidation Distribution, as provided herein, and
to be issued hereunder in connection with the offer to exchange the Initial
Capital Securities for a new series of capital securities of the Trust as
contemplated by the Exchange and Registration Rights Agreement.
"Expiration Date" has the meaning specified in Section 9.1.
"Global Capital Securities" means a beneficial interest in the Capital
Securities Certificates, ownership and transfers of which shall be made through
book entries by the Depository as described in Section 5.11.
"Global Capital Securities Certificates" means the Capital Securities
Certificates representing Global Capital Securities.
8
"Guarantee" means the Guarantee Agreement, as amended from time to time,
executed and delivered by the Depositor and First Union National Bank of North
Carolina, as guarantee trustee, contemporaneously with the execution and
delivery of this Trust Agreement, for the benefit of the Holders of the Initial
Capital Securities, and, when and if issued as contemplated by the Exchange and
Registration Rights Agreement, the guarantee agreement, as amended from time to
time, to be executed and delivered by the Depositor and First Union National
Bank of North Carolina, as guarantee trustee, contemporaneously with the
issuance of the Exchange Capital Securities as contemplated by the Exchange and
Registration Rights Agreement.
"Indenture" means the Junior Subordinated Indenture, dated as of February
10, 1997, between the Depositor and the Debenture Trustee, as trustee, as
amended or supplemented from time to time.
"Initial Capital Security" means an undivided beneficial preferred interest
in the assets of the Trust, having a Liquidation Amount of $1,000 and having the
rights provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution, as provided herein and issued on
the Closing Date.
"Initial Purchasers" means Goldman, Sachs & Co., Deutsche Morgan Grenfell
Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated as the initial
purchasers named in Schedule I to the Purchase Agreement.
"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 (a) with respect to a redemption of Trust Securities,
Trust Securities having an aggregate Liquidation Amount equal to that portion of
the aggregate principal amount of Debentures to be contemporaneously redeemed,
or which will contemporaneously mature, the proceeds of which will be used to
pay the Redemption Price of such Trust Securities, (b) with respect to a
distribution of Debentures to Holders of Trust Securities in connection with a
dissolution or liquidation of the Trust, Debentures having an aggregate
principal amount equal to the aggregate Liquidation Amount of the Trust
Securities of the Holders to whom such Debentures are distributed, and (c) with
respect to a repurchase of Debentures following a Change of Control, Debentures
having an aggregate principal amount equal to that portion of the aggregate
Liquidation Amount of the Capital Securities that are the subject of Repurchase
Elections delivered pursuant to Section 10.2(a).
"Liquidation Amount" means the stated amount of $1,000 per Trust Security.
9
"Liquidation Date" means the date on which Debentures are to be distributed
to Holders of Trust Securities in connection with a termination and liquidation
of the Trust pursuant to Section 9.4(a).
"Liquidation Distribution" has the meaning specified in Section 9.4(d).
"1940 Act" means the Investment Company Act of 1940, as amended.
"Officers' Certificate" means a certificate signed by the Chairman, Vice
Chairman, Chief Executive Officer, President or any Vice President, and by the
Treasurer, an Assistant Treasurer, the Controller, the Secretary or an Assistant
Secretary, of the Depositor, 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
Depositor. Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Trust Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
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, or an employee of, the Trust, the Property Trustee or the Depositor, and
who shall be reasonably acceptable to the Property Trustee.
"Original Trust Agreement" has the meaning specified in the recitals to
this Trust Agreement.
"Outstanding", when used with respect to Trust Securities, means, as of the
date of determination, all Trust Securities theretofore executed and delivered
under this Trust Agreement, except:
(a) Trust Securities theretofore canceled by the Securities Registrar or
delivered to the Securities Registrar for cancellation;
10
(b) Trust Securities for whose payment, repurchase or redemption money in
the necessary amount has been theretofore deposited with the Property Trustee or
any Paying Agent in trust for the Holders of such Trust Securities; provided
that, if such Trust Securities are to be redeemed or caused to be repurchased,
notice of such redemption or Repurchase Elections have been duly given pursuant
to this Trust Agreement; and
(c) Trust Securities which have been paid or in exchange for or in lieu of
which other Trust Securities have been executed and delivered pursuant to this
Trust Agreement, including pursuant to Sections 5.4, 5.5, 5.11 and 5.13, unless
proof satisfactory to the Property Trustee is presented that any such Trust
Securities are held by Holders in whose hands such Trust Securities are valid,
binding and legal obligations of the Trust;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Capital Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Capital
Securities owned by the Depositor, any Trustee or any Affiliate of the Depositor
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 Capital Securities that such Trustee actually knows to be so owned shall be
so disregarded and (b) the foregoing shall not apply at any time when all of the
outstanding Capital Securities are owned by the Depositor, one or more of the
Trustees and/or any such Affiliate. Capital Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Administrative Trustees the pledgee's right so to act
with respect to such Capital Securities and that the pledgee is not the
Depositor or any Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of a Global Capital
Securities Certificate as reflected in the records of the Depository or, if a
Depository Participant is not the beneficial owner, then as reflected in the
records of a Person maintaining an account with such Depository (directly or
indirectly, in accordance with the rules of such Depository).
"Paying Agent" means any paying agent or co-paying agent appointed pursuant
to Section 5.9 and shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing corporate trust
account maintained by the Property Trustee with the Bank in its corporate trust
department for the benefit of the Securityholders in which all amounts paid in
respect of the Debentures will be held and from which the Property Trustee,
through the Paying Agent, shall make payments to the Securityholders in
accordance with Sections 4.1, 4.2 and 10.2.
"Person" means any individual, corporation, association, partnership, joint
venture, trust, estate, limited liability company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.
11
"Property Trustee" means the Person identified as the "Property Trustee" in
the preamble to this Trust Agreement solely in its capacity as Property Trustee
of the Trust heretofore created and continued hereunder and not in its
individual capacity, or its successor in interest in such capacity, or any
successor property trustee appointed as herein provided.
"Purchase Agreement" means the Purchase Agreement, dated February 10, 1997,
among the Trust, the Depositor and the Initial Purchasers.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A under
the Securities Act.
"Redemption Date" means, with respect to any Trust Security to be redeemed,
the date fixed for such redemption by or pursuant to this Trust Agreement;
provided that each Debenture Redemption Date and the Debenture Maturity Date
shall be a Redemption Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any Trust Security to be
redeemed, the Liquidation Amount of such Trust Security plus accumulated and
unpaid Distributions to but excluding the Redemption Date, plus the amount of
the premium, if any, paid by the Depositor upon the concurrent redemption of
Debentures having a principal amount equal to the Liquidation Amount of such
Trust Security if such Trust Security is redeemed upon the redemption of
Debentures at maturity or upon earlier redemption as provided under the
Indenture.
"Relevant Trustee" shall have the meaning specified in Section 8.10.
"Repurchase Date," when used with respect to any Trust Security to be
repurchased pursuant to Section 10.1, means the date at which such Trust
Security is to be repurchased pursuant to Section 10.1.
"Repurchase Election" has the meaning specified in Section 10.1.
"Repurchase Price," when used with respect to any Trust Security to be
repurchased pursuant to Section 10.1, means the price at which such Trust
Security is to be repurchased pursuant to Section 10.1.
"Reserve Account" has the meaning specified in the Indenture.
"Restricted Securities Legend" means the legend set forth in Section 5.11.
"Securities Act" means the Securities Act of 1933, and any statute
successor thereto, in each case as amended from time to time, and the rules and
regulations promulgated thereunder.
12
"Securities Custodian" means the custodian with respect to the Global
Capital Securities Certificates (as appointed by the Depository), or any
successor entity thereto and shall initially be the Bank.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.11.
"Securityholder" or "Holder" means a Person in whose name a Trust Security
or Trust Securities are registered in the Securities Register; any such Person
shall be a beneficial owner within the meaning of the Delaware Business Trust
Act.
"Shelf Registration Statement" shall have the meaning set forth in the
Exchange and Registration Rights Agreement.
"Transfer Restricted Securities Certificates" means Capital Securities
Certificates that bear or are required to bear the legend set forth in Section
5.11.
"Trust" means the Delaware statutory business trust created under the
Original Trust Agreement and continued hereby and identified on the cover page
to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as the
same may be modified, amended or supplemented in accordance with the applicable
provisions hereof, including (i) all exhibits hereto and (ii) for all purposes
of this Trust Agreement and any such modification, amendment or supplement, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this Trust Agreement and any such modification, amendment or supplement,
respectively.
"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.
"Trust Property" means (a) the Debentures, (b) any cash on deposit in, or
owing to, the Payment Account and (c) all proceeds and rights in respect of the
foregoing. "Trust Property" shall not include funds deposited in the Reserve
Account but shall include such funds once paid out of the Reserve Account to the
Trust.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Capital Securities Certificates.
"Trust Security" means any one of the Common Securities or the Capital
Securities.
13
"Trustees" means, collectively, the Property Trustee, the Delaware Trustee
and the Administrative Trustees.
ARTICLE II
Continuation of the Trust
Section 2.1 Name.
The Trust continued hereby shall be known as "Integon Capital I," as such
name may be modified from time to time by the Administrative Trustees following
written notice to the Holders of Trust Securities and the other Trustees, in
which name the Property Trustee and the Administrative Trustees may engage in
the transactions contemplated hereby, make and execute contracts and other
instruments on behalf of the Trust and sue and be sued.
Section 2.2 Office of the Delaware Trustee; Principal Place of Business.
The address of the Delaware Trustee in the State of Delaware is c/o First
Union Bank of Delaware, One Rodney Square, 1st Floor, 920 King Street,
Wilmington, Delaware 19801, Attention: Corporate Trust Department, or such
other address in the State of Delaware as the Delaware Trustee may designate by
written notice to the Securityholders and the Depositor. The principal executive
office of the Trust is c/o Integon Corporation, 500 West Fifth Street, Winston-
Salem, North Carolina 27152; Attention: General Counsel.
Section 2.3 Initial Contribution of Trust Property; Organizational
Expenses.
The Property Trustee acknowledges receipt in trust from the Depositor in
connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay organizational
expenses of the Trust as they arise or shall, upon request of any Trustee,
promptly reimburse such Trustee for any such expenses paid by such Trustee. The
Depositor shall make no claim upon the Trust Property for the payment of such
expenses.
Section 2.4 Issuance of the Capital Securities.
As of February 5, 1997, the Depositor, on behalf of the Trust and pursuant
to the Original Trust Agreement, executed and delivered the Purchase Agreement.
On the Closing Date, an Administrative Trustee, on behalf of the Trust, shall
execute in accordance with Section 5.2, cause to be authenticated, and deliver
to the Initial Purchasers Capital Securities Certificates in respect of the
Initial Capital Securities, registered in the name of the nominee of the initial
Depository, as contemplated by Section 5.4(a), or in the name of such Persons as
such Initial
14
Purchasers shall have designated, as contemplated by Section
5.4(c), in an aggregate amount of 100,000 Capital Securities having an aggregate
Liquidation Amount of $100,000,000, against receipt of an aggregate purchase
price plus accumulated distributions from February 10, 1997 on such Capital
Securities of $100,000,000, which amount such Administrative Trustee shall
promptly deliver to the Property Trustee.
Section 2.5 Issuance of the Common Securities; Subscription and Purchase
of Debentures.
On the Closing Date, an Administrative Trustee, on behalf of the Trust,
shall execute in accordance with Section 5.2, cause to be authenticated, and
deliver to the Depositor Common Securities Certificates, registered in the name
of the Depositor, in an aggregate amount of 3,093 Common Securities having an
aggregate Liquidation Amount of $3,093,000 against payment by the Depositor of
an aggregate purchase price therefor of $3,093,000 which amount such
Administrative Trustee shall promptly deliver to the Property Trustee.
Contemporaneously therewith, an Administrative Trustee, on behalf of the Trust,
shall subscribe to and purchase from the Depositor Debentures, registered in the
name of the Trust and having an aggregate principal amount equal to
$103,093,000, and, in satisfaction of the purchase price plus accrued interest
from February 10, 1997 for such Debentures, the Property Trustee, on behalf of
the Trust, shall deliver to the Depositor the sum of $103,093,000 (being the sum
of the amounts delivered to the Property Trustee pursuant to (i) the second
sentence of Section 2.4 and (ii) the first sentence of this Section 2.5).
Section 2.6 Declaration of Trust.
The exclusive purposes and functions of the Trust are (a) to issue and sell
Trust Securities, (b) to use the proceeds from such sale to acquire the
Debentures and (c) to engage in those activities necessary or incidental
thereto. The Depositor hereby appoints the Trustees as trustees of the Trust, to
have all the rights, powers and duties to the extent set forth herein, and the
Trustees hereby accept such appointment. The Property Trustee hereby declares
that it will hold the Trust Property in trust upon and subject to the conditions
set forth herein for the benefit of the Trust and the Securityholders. The
Administrative 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 Property Trustee or the Administrative Trustees set
forth herein. The Delaware Trustee shall be one of the Trustees of the Trust for
the sole and limited purpose of fulfilling the requirements of Section 3807 of
the Delaware Business Trust Act and taking such actions as are required to be
taken by the Delaware Trustee under the Delaware Business Trust Act.
15
Section 2.7 Authorization to Enter into Certain Transactions.
(a) The Administrative Trustees and the Property Trustee shall conduct the
affairs of the Trust in accordance with the terms of this Trust Agreement.
Subject to the limitations set forth in paragraph (b) of this Section and
Article VIII and in accordance with the following provisions (i) and (ii), the
Administrative Trustees and the Property Trustee shall have the authority to
enter into all transactions and agreements determined by the Administrative
Trustees and the Property Trustee to be appropriate in exercising the authority,
express or implied, otherwise granted to such Trustees under this Trust
Agreement, and to perform all acts in furtherance thereof, including without
limitation, the following:
(i) As among the Trustees, each Administrative Trustee shall have
the power and authority to act on behalf of the Trust with respect to the
following:
(A) issuing and selling the Trust Securities;
(B) causing the Trust to enter into, and to execute, deliver and
perform on behalf of the Trust, the Certificate Depository Agreement
and such other agreements as may be necessary or desirable in
connection with the purposes and function of the Trust;
(C) causing the Trust to enter into, and to execute, deliver and
perform on behalf of the Trust, the Exchange and Registration Rights
Agreement and assisting in the registration of the Capital Securities,
as contemplated by the Exchange and Registration Rights Agreement,
under the Securities Act and under state securities or blue sky laws,
and the qualification of this Trust Agreement as a trust indenture
under the Trust Indenture Act;
(D) assisting in the listing, if any, of the Capital Securities
upon such national securities exchange or exchanges or automated
quotation system or systems as shall be determined by the Depositor
and the registration of the Capital Securities under the Exchange Act
and the preparation and filing of all periodic and other reports and
other documents pursuant to the foregoing;
(E) sending notices (other than notices of default) and other
information regarding the Trust Securities and the Debentures to the
Securityholders in accordance with this Trust Agreement;
(F) appointing a Paying Agent and Securities Registrar in
accordance with this Trust Agreement;
16
(G) registering transfers of the Trust Securities in accordance
with this Trust Agreement;
(H) to the extent provided in this Trust Agreement, winding up
the affairs of and liquidating the Trust and executing and filing the
certificate of cancellation with the Secretary of State of the State
of Delaware;
(I) unless otherwise determined by the Depositor, the Property
Trustee or the Administrative Trustees, or as otherwise required by
the Delaware Business Trust Act or the Trust Indenture Act, executing
on behalf of the Trust (either acting alone or together with any or
all of the Administrative Trustees) any documents that the
Administrative Trustees have the power to execute pursuant to this
Trust Agreement; and
(J) taking any action incidental to the foregoing as the
Trustees may from time to time determine is necessary or advisable to
give effect to the terms of this Trust Agreement for the benefit of
the Securityholders (without consideration of the effect of any such
action on any particular Securityholder).
(ii) As among the Trustees, the Property Trustee shall have the
power, duty and authority to act on behalf of the Trust with respect to the
following:
(A) establishing the Payment Account;
(B) receiving the Debentures;
(C) collecting interest, principal and any other payments made
in respect of the Debentures in the Payment Account;
(D) distributing through the Paying Agent amounts owed to the
Securityholders in respect of the Trust Securities;
(E) exercising all of the rights, powers and privileges of a
holder of the Debentures;
(F) sending notices of default or change of control and other
information regarding the Trust Securities and the Debentures to the
Securityholders in accordance with this Trust Agreement;
(G) distributing the Trust Property in accordance with the terms
of this Trust Agreement; and
17
(H) to the extent provided in this Trust Agreement, winding up
the affairs of and liquidating the Trust and executing and filing the
certificate of cancellation with the Secretary of State of the State
of Delaware.
Except as otherwise provided in this Section 2.7(a)(ii), the Property
Trustee shall have none of the duties, liabilities, powers or authority of
the Administrative Trustees set forth in Section 2.7(a)(i).
(b) So long as this Trust Agreement remains in effect, the Trust (or the
Property Trustee and the Administrative 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 Property Trustee and
the Administrative Trustees shall not (i) acquire any investments or engage in
any activities not authorized by this Trust Agreement, (ii) sell, assign,
transfer, exchange, mortgage, 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
be taxable as a corporation or fail or cease to qualify as a "grantor trust" for
United States federal income tax purposes, (iv) incur any indebtedness for
borrowed money or issue any other debt, (v) take or consent to any action that
would result in the placement of a Lien on any of the Trust Property, (vi)
invest any proceeds received by the Trust from holding the Debentures, but shall
distribute all such proceeds to Holders of Trust Securities pursuant to the
terms of this Trust Agreement and of the Trust Securities; (vii) acquire any
assets other than the Trust Property, (viii) possess any power or otherwise act
in such a way as to vary the Trust Property, (ix) possess any power or otherwise
act in such a way as to vary the terms of the Trust Securities in any way
whatsoever (except to the extent expressly authorized in this Trust Agreement or
by the terms of the Trust Securities) or (x) issue any securities or other
evidences of beneficial ownership of, or beneficial interest in, the Trust other
than the Trust Securities. The Administrative 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. The Property Trustee may rely on the statements
of the Administrative Trustees as to whether any action of the Property Trustee
would cause the Trust to be taxable as a corporation or fail or cease to qualify
as a "grantor trust" for United States federal income tax purposes.
(c) In connection with the issue and sale of the Capital Securities, the
Depositor 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 Depositor in furtherance of the following prior to the date of this
Trust Agreement are hereby ratified and confirmed in all respects):
(i) the negotiation of the terms of, and the execution and
delivery of, the Purchase Agreement and any underwriting agreement
providing for the sale of the Capital Securities;
18
(ii) the preparation and filing by the Trust with the Commission
and the execution on behalf of the Trust of a registration statement on the
appropriate form in relation to the Capital Securities, as contemplated by
the Exchange and Registration Rights Agreement, including any amendments
thereto;
(iii) the determination of the states in which to take
appropriate action to qualify or register for sale all or part of the
Capital Securities and the determination of any and all such acts, other
than actions which must be taken by or on behalf of the Trust, and the
advice to the Property Trustee and the Administrative Trustees of actions
they must take on behalf of the Trust, and the preparation for execution
and filing, and the execution on behalf of the Trust of any documents to be
executed and filed by the Trust or on behalf of the Trust, as the Depositor
deems necessary or advisable in order to comply with the applicable laws of
any such states;
(iv) the preparation for filing by the Trust and execution on
behalf of the Trust of an application to the New York Stock Exchange or any
other national stock exchange or the Nasdaq National Market or any other
automated quotation system for listing upon notice of issuance of any
Capital Securities and filing with such exchange or self-regulatory
organization such notifications and documents as may be necessary from time
to time to maintain such listing; and
(v) the taking of any other actions necessary or desirable to
carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the Administrative
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 1940 Act, or be taxable as a
corporation or fail or cease to be classified as a grantor trust for United
States federal income tax purposes and so that the Debentures will be treated as
indebtedness of the Depositor for United States federal income tax purposes. In
this connection, the Depositor and the Administrative Trustees are authorized to
take any action, not inconsistent with applicable law, the Certificate of Trust
or this Trust Agreement, that each of the Depositor and any Administrative
Trustee determines in its discretion to be necessary or desirable for such
purposes, as long as such action does not adversely affect in any material
respect the interests of the Holders of the Capital Securities.
19
Section 2.8 Assets of Trust.
The assets of the Trust shall consist solely of the Trust Property.
Section 2.9 Title to Trust Property.
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered by
the Property Trustee for the benefit of the Trust and the Securityholders in
accordance with this Trust Agreement.
ARTICLE III
Payment Account
Section 3.1 Payment Account.
(a) On or prior to the Closing Date, the Property Trustee shall establish
the Payment Account. The Property Trustee and any agent of the Property 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 Trust Agreement. All monies and other
property deposited or held from time to time in the Payment Account (including
funds paid by the Depositor to the Trust out of the Reserve Account in
satisfaction of the Company's interest payment obligations under the Indenture)
shall be held by the Property 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 Property Trustee shall deposit in the Payment Account, promptly
upon receipt, all payments of principal of, or interest or premium on, and any
other payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee.
ARTICLE IV
Distributions; Redemption
Section 4.1 Distributions.
(a) The Trust Securities represent undivided beneficial ownership interests
in the Trust Property, and Distributions (including of Additional Amounts) will
be made on the Trust
20
Securities at the rate and on the dates that payments of interest (including
of Additional Interest, if any,) are made on the Debentures. Accordingly:
(i) Distributions on the Trust Securities shall be cumulative,
and will accumulate whether or not there are funds of the Trust available
for the payment of Distributions. Distributions shall accumulate from
February 10, 1997, and, except in the event (and to the extent) that the
Depositor exercises its right to defer the payment of interest on the
Debentures pursuant to the Indenture, shall be payable semi-annually in
arrears on February 15 and August 15, commencing on August 15, 1997. If
any date on which a Distribution is otherwise payable on the Trust
Securities is not a Business Day, then the payment of such Distribution
shall be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except
that, if such Business Day is in the next succeeding calendar year, payment
of such Distribution shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date
(each date on which Distributions are payable in accordance with this
Section 4.1(a), a "Distribution Date").
(ii) Distributions on the Trust Securities shall accumulate and
be payable at a rate of 10 3/4% per annum of the Liquidation Amount of the
Trust Securities. The amount of Distributions payable for any Distribution
period shall be computed on the basis of a 360-day year of twelve 30-day
months. The amount of Distributions for any partial Distribution period
shall be computed on the basis of the number of days elapsed in a 360-day
year of twelve 30-day months. The amount of Distributions payable for any
period shall include the Additional Amounts, if any.
(iii) Distributions on the Trust Securities shall be made by the
Property Trustee, who shall deposit with the Paying Agent funds sufficient
to pay the applicable Distributions, from the Payment Account and shall be
payable on each Distribution Date only to the extent that the Trust has
funds then on hand and available in the Payment Account for the payment of
such Distributions.
(b) Distributions on the Trust Securities with respect to a 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, which shall be
one Business Day prior to such Distribution Date; provided, however, that in the
event that any of the Capital Securities are not held in book-entry form, the
relevant record date for all Capital Securities shall be 15 days prior to the
relevant Distribution Date (whether or not such record date is a Business Day).
21
Section 4.2 Redemption.
(a) On each Debenture Redemption Date and the Debenture Maturity Date, the
Trust shall redeem a Like Amount of Trust Securities at the applicable
Redemption Price.
(b) Notice of redemption shall be given by the Property 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 Security Register. All notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number, if any, of the Trust Securities to be
redeemed;
(iv) if less than all the Outstanding Trust Securities are to be
redeemed, the identification and the total Liquidation Amount of the
particular Trust Securities to be redeemed;
(v) that on the Redemption Date the Redemption Price will become
due and payable upon each such Trust Security to be redeemed and that
Distributions thereon will cease to accrue on and after said date; and
(vi) if any of the Capital Securities are not held in book-entry
form, the place and address where the Holders shall surrender their Capital
Securities Certificates.
(c) The Trust Securities redeemed on each Redemption Date shall be redeemed
at the Redemption Price with the proceeds from the contemporaneous redemption or
payment at stated maturity of Debentures. Redemptions of the Trust Securities
shall be made and the Redemption Price shall be payable on each Redemption Date
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.
(d) If the Property Trustee gives a notice of redemption in respect of any
Capital Securities, then, by 12:00 noon, New York City time, on the Redemption
Date, subject to Section 4.2(c), the Property Trustee will, with respect to
Capital Securities that are held in book-entry form, irrevocably deposit with
the Depository for the Capital Securities funds sufficient to pay the applicable
Redemption Price and will give such Depository irrevocable instructions and
authority to pay the Redemption Price to the Holders thereof. With respect to
Capital Securities that are not held in book-entry form, the Property Trustee,
subject to Section 4.2(c), will irrevocably deposit with the Paying Agent funds
sufficient to pay the applicable Redemption Price and will give the Paying Agent
irrevocable instructions and authority to pay the
22
Redemption Price to the Holders thereof upon surrender of their Capital
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
and funds deposited as required, then upon the date of such deposit, all rights
of Securityholders holding Trust Securities so called for redemption will cease,
except the right of such Securityholders to receive the Redemption Price and any
Distribution payable on or prior to the Redemption Date, but without interest
thereon, and such Trust Securities will cease to be outstanding. In the event
that any date on which any Redemption Price is payable is not a Business Day,
then payment of the Redemption Price payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day 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 Depositor pursuant to the Guarantee,
Distributions on such Trust Securities will continue to accrue at the then
applicable rate from the Redemption Date originally established by the Trust for
such Trust Securities to the date such Redemption Price is actually paid, in
which case the actual payment date will be the date fixed for redemption for
purposes of calculating the Redemption Price.
(e) Payment of the Redemption Price on the Trust Securities shall be made
to the recordholders thereof as they appear on the Securities Register for the
Trust Securities on the relevant record date, which shall be one Business Day
prior to the relevant Redemption Date; provided, however, that in the event that
any of the Capital Securities are not held in book-entry form, the relevant
record date for all Trust Securities shall be the date 15 days prior to the
relevant Redemption Date.
(f) Subject to Section 4.3(a), if less than all the Outstanding Trust
Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated on a
pro rata basis (based on Liquidation Amounts) among the Common Securities and
the Capital Securities. The particular Capital Securities to be redeemed shall
be selected on a pro rata basis (based upon Liquidation Amounts) not more than
60 days prior to the Redemption Date by the Property Trustee from the
Outstanding Capital Securities not previously called for redemption, by such
method as the Property Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions (equal to $1,000 or an
integral multiple of $1,000 in excess thereof) of the Liquidation Amount of
Capital Securities of a denomination larger than $1,000 or, if the Capital
Securities are then held in the form of Global Capital Securities, in accordance
with the Depository's customary procedures; provided in each case that any
Holder of Capital Securities after redemption has at least 100 Capital
Securities remaining after the redemption. The Property Trustee shall promptly
notify
23
the Security Registrar in writing of the Capital Securities selected for
redemption and, in the case of any Capital Securities selected for partial
redemption, the Liquidation Amount thereof to be redeemed. For all purposes of
this Trust Agreement, unless the context otherwise requires, all provisions
relating to the redemption of Capital Securities shall relate, in the case of
any Capital Securities redeemed or to be redeemed only in part, to the portion
of the Liquidation Amount of Capital Securities that has been or is to be
redeemed.
Section 4.3 Subordination of Common Securities.
(a) Payment of Distributions (including Additional Amounts, if applicable)
on, and the Redemption Price or the Repurchase Price of, the Trust Securities,
as applicable, shall be made, subject to Section 4.2(f), pro rata among the
Common Securities and the Capital Securities based on the Liquidation Amount of
the Trust Securities; provided, however, that if on any Distribution Date,
Redemption Date or Repurchase Date, any Debenture Event of Default shall have
occurred and be continuing as a result of any failure by the Depositor to pay
principal of and interest on the Debentures when due, no payment of any
Distribution (including Additional Amounts, if applicable) 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
(including Additional Amounts, if applicable) on all Outstanding Capital
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 Capital Securities then called for redemption, or in
the case of payment of the Repurchase Price, the full amount of such Repurchase
Price on all Capital Securities subject to Repurchase Elections, shall have been
made or provided for, and all funds immediately available to the Property
Trustee shall first be applied to the payment in full in cash of all
Distributions (including Additional Amounts, if applicable) on, or the
Redemption Price of, Capital Securities then due and payable.
(b) In the case of the occurrence of any Event of Default resulting from
any Debenture Event of Default, the Holder of Common Securities will be deemed
to have waived any right to act with respect to any such Event of Default under
this Trust Agreement until the effect of all such Events of Default with respect
to the Capital Securities have been cured, waived or otherwise eliminated. Until
any such Event of Default under this Trust Agreement with respect to the Capital
Securities has been so cured, waived or otherwise eliminated, the Property
Trustee shall act solely on behalf of the Holders of the Capital Securities and
not the Holder of the Common Securities, and only the Holders of the Capital
Securities will have the right to direct the Property Trustee to act on their
behalf.
Section 4.4 Payment Procedures.
Payments of Distributions (including Additional Amounts, if applicable) on,
and the Redemption Price and the Repurchase Price of, the Capital Securities
shall be made by wire
24
transfer, direct deposit or check mailed to the address of the Person entitled
thereto as such address shall appear on the Securities Register or, if the
Capital Securities are held by a Depository, such payments shall be made to the
Depository in immediately available funds, which shall credit the relevant
Persons' accounts at such Depository on the applicable Distribution Dates,
Redemption Dates or Repurchase Dates, as the case may be. Payments in respect of
the Common Securities shall be made in such manner as shall be mutually agreed
in writing between the Property Trustee and the Common Securityholder.
Section 4.5 Tax Returns and Reports.
The Administrative Trustees shall prepare (or cause to be prepared), at the
Depositor'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. In this regard, the Administrative Trustees shall (a) prepare and file
(or cause to be prepared and filed) the appropriate Internal Revenue Service
form required to be filed in respect of the Trust in each taxable year of the
Trust and (b) prepare and furnish (or cause to be prepared and furnished) to
each Securityholder the appropriate Internal Revenue Service form, if any, and
the information required to be provided by the Trust on such form. The
Administrative Trustees shall provide the Depositor and the Property Trustee
with a copy of all such returns and reports promptly after such filing or
furnishing. The Property Trustee and the Administrative Trustees shall comply
with United States federal withholding and backup withholding tax laws and
information reporting requirements with respect to any payments to
Securityholders under the Trust Securities. The Property Trustee may rely on
the directions of the Administrative Trustees as to the requirements of the
foregoing tax laws. None of the Property Trustee, the Paying Agent nor any of
their agents shall (1) have any duty to monitor compliance with or with respect
to any federal or state or other securities or tax laws or (2) have any duty to
obtain documentation on any transfers or exchanges other than as specifically
required hereunder.
Section 4.6 Payment of Taxes, Duties, Etc. of the Issuer Trust.
Upon receipt under the Debentures of Additional Sums, the Property Trustee
shall promptly pay any taxes, duties or governmental charges of whatsoever
nature (other than withholding taxes) imposed on the Trust by the United States
or any other taxing authority.
Section 4.7 Payments under Indenture or Pursuant to Direct Actions.
Any amount payable hereunder to any Holder of Capital Securities shall be
reduced by the amount of any corresponding payment such Holder (or an Owner with
respect to the Holder's Capital Securities) has directly received pursuant to
Section 5.8 of the Indenture or Section 5.14 of this Trust Agreement.
25
ARTICLE V
Trust Securities Certificates
Section 5.1 Initial Ownership.
Upon the creation of the Trust and the contribution to the initial Trust
Property by the Depositor pursuant to Section 2.3 and until the issuance of the
Trust Securities, and at any time during which no Trust Securities are
outstanding, the Depositor shall be the sole beneficial owner of the Trust.
Section 5.2 The Trust Securities Certificates.
The Capital Securities Certificates shall be issued in minimum
denominations of $1,000 Liquidation Amount and minimum blocks of at least 100
(representing a minimum of $100,000 aggregate Liquidation Amount), and the
Common Securities Certificates shall be issued in denominations of $1,000
Liquidation Amount and integral multiples thereof. The Trust Securities
Certificates shall be executed on behalf of the Trust by manual or facsimile
signature of at least one Administrative Trustee. The Trust Securities
Certificates shall be authenticated by the Property Trustee by manual signature
of an authorized signatory thereof. Trust Securities Certificates bearing the
manual signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Trust or the
Property Trustee shall be validly issued and entitled to the benefits of this
Trust Agreement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the delivery of such Trust Securities
Certificates or did not hold such offices at the date of 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 Sections 5.4, 5.11
and 5.13.
Section 5.3 Execution and Delivery of Trust Securities Certificates.
On the Closing Date, the Administrative Trustees shall cause Trust
Securities Certificates, in respect of (a) Initial Capital Securities in an
aggregate Liquidation Amount as provided in Section 2.4 and (b) Common
Securities, in an aggregate Liquidation Amount as provided in Section 2.5, to
be executed on behalf of the Trust, authenticated by the Property Trustee and
delivered in accordance with Sections 5.4 and 5.10 to or upon the written order
of the Depositor, executed by an authorized officer thereof, without further
corporate action by the Depositor.
26
Section 5.4 Capital Securities.
Capital Securities Certificates in respect of Initial Capital Securities
and the Property Trustee's certificate of authentication shall be substantially
in the form of Exhibit B-1 hereto, which is hereby incorporated in and expressly
made a part of this Trust Agreement. Any Capital Securities Certificate in
respect of Exchange Capital Securities and the Property Trustee's certificate of
authentication shall be substantially in the form of Exhibit B-2 hereto, which
is incorporated in and expressly made a part of this Trust Agreement. The
Capital Securities Certificates may have notations, legends or endorsements
required by law, stock exchange rule, agreements to which the Trust is subject,
if any, or usage (provided that any such notation, legend or endorsement is in a
form acceptable to the Trust). Each Capital Security Certificate shall be dated
the date of its authentication.
(a) Global Capital Securities Certificates. The Initial Capital Securities
--------------------------------------
are being offered and sold by the Trust pursuant to the Purchase Agreement.
Initial Capital Securities offered and sold to QIBs in accordance with Rule
144A under the Securities Act ("Rule 144A") as provided in the Purchase
Agreement, shall be issued initially in the form of a single, permanent Global
Capital Security Certificate in definitive, fully registered form with the
Restricted Securities Legend and the global security legend set forth in Exhibit
B-1 hereto (the "Restricted Global Security"), shall be deposited on behalf of
the Initial Purchasers of the Initial Capital Securities represented thereby
with the Property Trustee, as Securities Custodian for the Depository, shall be
registered in the name of the Depository or a registered nominee of the
Depository, and shall be duly executed by an Administrative Trustee on behalf of
the Trust and authenticated by the Property Trustee as hereinafter provided.
The aggregate Liquidation Amount of the Restricted Global Security may from time
to time be increased or decreased by adjustments made on the records of the
Property Trustee, as Securities Custodian, and the Depository or its nominee as
hereinafter provided.
(b) Book-Entry Provisions. This Section 5.4(b) shall apply only to Global
---------------------
Capital Securities Certificates deposited with or on behalf of the Depository.
Depository Participants or members of the Depository (together, the "Agent
Members") shall have no rights under this Trust Agreement with respect to any
Global Capital Security held on their behalf by the Depository or by the
Property Trustee as the Securities Custodian, and the Depository may be treated
by the Trust, the Property Trustee and any agent of the Trust or the Property
Trustee as the absolute owner of such Global Capital Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Trust, the Property Trustee or any agent of the Trust or the Property Trustee
from giving effect to any written certification, proxy or other authorization
furnished by the Depository or shall impair, as between the Depository and its
Agent Members, the operation of customary practices of such
27
Depository governing the exercise of the rights of a holder of a beneficial
interest in any Global Capital Security.
(c) Certificated Securities. Except as otherwise provided herein, owners
-----------------------
of beneficial interests in Global Capital Securities Certificates shall not be
entitled to receive physical delivery of certificated Capital Securities.
Purchasers of Initial Capital Securities who are not QIBs shall receive
certificated Initial Capital Securities bearing the Restricted Securities Legend
("Restricted Certificated Securities"); provided, however, that upon transfer of
such Restricted Certificated Securities to a QIB, such Restricted Certificated
Securities shall, unless the relevant Global Capital Security has previously
been exchanged, be exchanged for an interest in a Global Capital Security
pursuant to the provisions of Section 5.11 hereof. Restricted Certificated
Securities shall include the Restricted Securities Legend unless removed in
accordance with this Section 5.4(c) or Section 5.11(g) hereof.
Section 5.5 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
Administrative 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
Administrative Trustees, or any one of them, on behalf of the Trust shall
execute by manual or facsimile signature and, if executed on behalf of the Trust
by facsimile signature, such certificate shall be countersigned by a transfer
agent, 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
Administrative 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 undivided
beneficial interest in the Trust Property, as if originally issued, whether or
not the lost, stolen or destroyed Trust Securities Certificate shall be found at
any time.
Section 5.6 Persons Deemed Securityholders.
The Property Trustee, the Administrative Trustees and 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 and for all
other purposes whatsoever, and none of the Property Trustee, the Administrative
Trustees nor the Securities Registrar shall be bound by any notice to the
contrary.
28
Section 5.7 Access to List of Securityholders' Names and Addresses.
Each Holder and each Owner shall be deemed to have agreed not to hold the
Depositor, the Property Trustee or the Administrative Trustees accountable by
reason of the disclosure of its name and address, regardless of the source from
which such information was derived.
Section 5.8 Maintenance of Office or Agency.
The Administrative Trustees shall maintain an office or offices or agency
or agencies where Capital Securities Certificates may be surrendered for
redemption, repurchase, registration of transfer or exchange and where notices
and demands to or upon the Property Trustee or Administrative Trustees in
respect of the Trust Securities Certificates may be served. The Administrative
Trustees initially designate First Union National Bank of North Carolina, 230
South Tryon Street, 9th Floor, Charlotte, North Carolina 28288-1179, Attn: Bond
Administration, as their principal corporate trust office for such purposes. The
Administrative Trustees shall give prompt written notice to the Depositor, the
Property Trustee and to the Securityholders of any change in the location of the
Securities Register or any such office or agency.
Section 5.9 Appointment of Paying Agent.
Upon receipt from the Property Trustee of funds to make the applicable
payments, the Paying Agent shall make Distributions, payments of the Redemption
Price and the Repurchase Price, as the case may be, to Securityholders from the
Payment Account and shall report the amounts of such Distributions, Redemption
Price and Repurchase Price, as the case may be, to the Property Trustee and the
Administrative Trustees. Any Paying Agent shall have the revocable power to
withdraw funds from the Payment Account for the purpose of making the
Distributions and Redemption Price and Repurchase Price payments referred to
above. The Administrative 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 Trust Agreement in any
material respect. The Paying Agent shall initially be the Bank, and any co-
paying agent chosen by the Bank, and acceptable to the Administrative Trustees
and the Depositor. Any Person acting as Paying Agent shall be permitted to
resign as Paying Agent upon 30 days' written notice to the Administrative
Trustees, the Property Trustee and the Depositor. In the event that the Bank
shall no longer be the Paying Agent or a successor Paying Agent shall resign or
its authority to act be revoked, the Administrative Trustees shall appoint a
successor that is acceptable to the Property Trustee and the Depositor to act as
Paying Agent (which shall be a bank or trust company). The Administrative
Trustees shall cause such successor Paying Agent or any additional Paying Agent
appointed by the Administrative Trustees 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
29
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 Property Trustee and upon
resignation or removal of a Paying Agent such Paying Agent shall also return all
funds in its possession to the Property Trustee. The provisions of Sections 8.1,
8.3 and 8.6 herein shall apply to the Bank also in its role as Paying Agent, for
so long as the Bank shall act as Paying Agent and, to the extent applicable, to
any other paying agent appointed hereunder, and any Paying Agent shall be bound
by the requirements with respect to paying agents of securities issued pursuant
to the Trust Indenture Act. Any reference in this Trust Agreement to the Paying
Agent shall include any co-paying agent unless the context requires otherwise.
Section 5.10 Ownership of Common Securities by Depositor; Common
Securities Certificate.
(a) On the Closing Date, the Depositor shall acquire and retain beneficial
and record ownership of the Common Securities. To the fullest extent permitted
by law, other than a transfer in connection with a consolidation or merger of
the Depositor into another Person, any conveyance, transfer or lease by the
Depositor of its properties and assets substantially as an entirety to any
Person, pursuant to Section 8.1 of the Indenture, or a transfer to a wholly
owned subsidiary of the Depositor, any attempted transfer of the Common
Securities shall be void. The Administrative Trustees shall cause each Common
Securities Certificate issued to the Depositor to contain a legend stating "THIS
CERTIFICATE IS NOT TRANSFERABLE TO A PERSON WHO IS NOT A WHOLLY OWNED SUBSIDIARY
OF HOLDER".
(b) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
Section 5.11 Registration of Transfer and Exchange of Securities
Certificates.
The Depositor shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 5.8, a register or registers for the purpose of
registering Trust Securities Certificates and transfers and exchanges of Capital
Securities Certificates (the "Securities Register") in which the transfer agent
and registrar designated by the Depositor (the "Securities Registrar"), subject
to such reasonable regulations as it may prescribe, shall provide for the
registration of Capital Securities Certificates and Common Securities
Certificates (subject to Section 5.10 in the case of the Common Securities
Certificates) and registration of transfers and exchanges of Capital Securities
Certificates as herein provided. The Bank shall be the initial Securities
Registrar.
Upon surrender for registration of transfer of any Capital Securities
Certificate at the office or agency maintained pursuant to Section 5.8, the
Administrative Trustees or any one of
30
them shall execute on behalf of the Trust (and if executed on behalf of the
Trust by a facsimile signature, such certificate shall be countersigned by a
transfer agent or its agent) and deliver, in the name of the designated
transferee or transferees, one or more new Capital Securities Certificates in
authorized denominations of a like aggregate Liquidation Amount dated the date
of execution by such Administrative Trustee or Trustees.
(a) Transfer and Exchange of Definitive Capital Securities Certificates.
-------------------------------------------------------------------
When Definitive Capital Securities Certificates are presented to the Securities
Registrar with a request:
(i) to register the transfer of such Definitive Capital Securities
Certificates; or
(ii) to exchange such Definitive Capital Securities Certificates for
Definitive Capital Securities Certificates in an equal aggregate Liquidation
Amount of Definitive Capital Securities of other authorized denominations,
the Securities Registrar shall register the transfer or make the exchange as
requested if its reasonable requirements for such transaction are met; provided,
however, that the Definitive Capital Securities Certificates surrendered or
transferred or exchanged:
(A) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to an Administrative Trustee and
the Securities Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing; and
(B) in the case of Transfer Restricted Securities Certificates that
are Definitive Capital Securities Certificates, are being transferred or
exchanged either pursuant to an effective registration statement under the
Securities Act or pursuant to clause (1), (2) or (3) below and are
accompanied by the following additional information and documents, as
applicable:
(1) if such Transfer Restricted Securities Certificates are being
delivered to the Securities Registrar by a Holder for registration in
the name of such Holder, without transfer, a certification from such
Holder to that effect (in substantially the form set forth on the
reverse of the Security); or
(2) if such Transfer Restricted Securities Certificates are being
transferred to the Trust or to a QIB in accordance with Rule 144A
under the Securities Act, a certification to that effect (in
substantially the form set forth on the reverse of the Security); or
(3) if such Transfer Restricted Securities Certificates are being
transferred (w) pursuant to an exemption from registration in
accordance with Rule 144 under the Securities Act; or (x) to an
institutional "accredited investor" within the
31
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act
that is acquiring the security for its own account, or for the account
of such an institutional accredited investor, in each case in a
minimum Liquidation Amount of the Capital Securities of $100,000 for
investment purposes and not with a view to, or for offer or sale in
connection with, any distribution in violation of the Securities Act;
or (y) in reliance on another exemption from the registration
requirements of the Securities Act: (i) a certification to that effect
(in substantially the form set forth on the reverse of the Security).
(ii) if an Administrative Trustee or the Securities Registrar so
requests, an Opinion of Counsel reasonably acceptable to an
Administrative Trustee and to the Securities Registrar to the effect
that such transfer is in compliance with the Securities Act and (iii)
in the case of clause (x) a signed letter substantially in the form of
Exhibit E hereto.
(b) Restrictions of Transfer of a Definitive Capital Security For a
---------------------------------------------------------------
Beneficial Interest in a Global Capital Security. A Definitive Capital Security
- ------------------------------------------------
may not be exchanged for a beneficial interest in a Global Capital Security
except upon satisfaction of the requirements set forth below. Upon receipt by
the Property Trustee of a Definitive Capital Security, duly endorsed or
accompanied by appropriate instruments of transfer, in form satisfactory to an
Administrative Trustee, together with:
(i) if such Definitive Capital Security is a Transfer Restricted
Security, certification that such Definitive Capital Security is being
transferred to a QIB in accordance with Rule 144A under the Securities Act;
and
(ii) whether or not such Definitive Capital Security is a Transfer
Restricted Security, written instructions directing the Property Trustee to
make, or to direct the Securities Custodian to make, an adjustment on its
books and records with respect to such Global Capital Security to reflect
an increase in the aggregate Liquidation Amount of the Capital Securities
represented by the Global Capital Security,
then the Administrative Trustees or any one of them shall cancel such
Definitive Capital Security and cause, or direct the Securities Custodian
to cause, in accordance with the standing instructions and procedures
existing between the Depository and the Securities Custodian, the aggregate
Liquidation Amount of Capital Securities represented by the Global Capital
Security to be increased accordingly. If no Global Capital Securities
Certificates are then outstanding, the Trust shall issue and the Property
Trustee shall authenticate, upon written order of the Trust in the form of
an Officers' Certificate, a new Global Capital Security in the appropriate
Liquidation Amount.
None of the Trustees or the Securities Registrar has duties to obtain
certificates or other documentation with respect to the transfer or exchange
between or among any depositary
32
participants, members or beneficial owners in any global security and shall have
no liability or responsibility with respect to the legality thereof.
(c) Transfer and Exchange of Global Capital Securities Certificates. The
---------------------------------------------------------------
transfer and exchange of Global Capital Securities Certificates or beneficial
interests therein shall be effected through the Depository, in accordance with
this Trust Agreement (including applicable restrictions on transfer set forth
herein, if any) and the procedures of the Depository therefor.
(d) Transfer of a Beneficial Interest in a Global Capital Security For a
--------------------------------------------------------------------
Definitive Capital Security.
- ---------------------------
(i) Any person having a beneficial interest in a Global Capital
Security that is being transferred or exchanged pursuant to an effective
registration statement under the Securities Act or pursuant to clause (A),
(B) or (C) below may upon request, and if accompanied by the information
specified below, exchange such beneficial interest for a Definitive Capital
Security of the same aggregate Liquidation Amount. Upon receipt by the
Property Trustee of written instructions or such other form of instructions
as is customary for the Depository from the Depository or its nominee on
behalf of any Person having a beneficial interest in a Global Capital
Security and upon receipt by the Property Trustee of a written order or
such other form of instructions as is customary for the Depository or the
Person designated by the Depository as having such a beneficial interest in
a Transfer Restricted Security only, the following additional information
and documents (all of which may be submitted by facsimile):
(A) if such beneficial interest is being transferred to the
Person designated by the Depository as being the owner of a beneficial
interest in a Global Capital Security, a certification from such
Person to that effect (in substantially the form set forth on the
reverse of the Security); or
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certification to
that effect (in substantially the form set forth on the reverse of the
Security); or
(C) if such beneficial interest is being transferred (w) pursuant
to an exemption from registration in accordance with Rule 144 under
the Securities Act or Regulation S under the Securities Act, or (x) to
an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act that is acquiring
the security for its own account, or for the account of such an
33
institutional accredited investor, in each case in a minimum
Liquidation Amount of the Capital Securities of $100,000 for
investment purposes and not with a view to, or for offer or sale in
connection with, any distribution in violation of the Securities Act;
or (y) in reliance on another exemption from the registration
requirements of the Securities Act: (i) a certification to that
effect from the transferee or transferor, (ii) if an Administrative
Trustee or the Securities Registrar so requests, an opinion of counsel
from the transferee or transferor reasonably acceptable to an
Administrative Trustee and to the Securities Registrar to the effect
that such transfer is in compliance with the Securities Act and (iii)
in the case of clause (x) a signed letter substantially in the form of
Exhibit E hereto,
then the Property Trustee or the Securities Custodian, at the direction of the
Administrative Trustees, shall cause, in accordance with the standing
instructions and procedures existing between the Depository and the Securities
Custodian, the aggregate Liquidation Amount of the Global Capital Security to be
reduced on its books and records and, following such reduction, the
Administrative Trustees or any one of them shall execute, shall cause the
Property Trustee to authenticate and shall deliver to the transferee a
Definitive Capital Security.
(ii) Definitive Capital Securities Certificates issued in exchange
for a beneficial interest in a Global Capital Security pursuant to this
Section 5.11(d) shall be registered in such names and in such authorized
denominations as the Depository, pursuant to instructions from direct or
indirect Depository Participants or otherwise, shall instruct the
Administrative Trustees. The Administrative Trustees shall deliver such
Definitive Capital Securities Certificates to the persons in whose names
such Capital Securities are so registered in accordance with the written
instructions of the Depository.
(e) Restrictions on Transfer and Exchange of Global Capital Securities
------------------------------------------------------------------
Certificates. Notwithstanding any other provisions of this Trust Agreement
- ------------
(other than the provisions set forth in Section 5.13), a Global Capital Security
may not be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(f) Legend.
------
(i) Except as permitted by the following paragraph (ii), each Capital
Security Certificate evidencing the Global Capital Securities and
Definitive Capital Securities (and all Capital Securities Certificates
issued in exchange therefor or substitution thereof) shall bear a legend in
substantially the following form:
34
THIS CAPITAL SECURITY AND ANY JUNIOR SUBORDINATED DEBENTURES ISSUABLE
IN CONNECTION THEREWITH HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) BY THE INITIAL
INVESTOR, (I) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER
THE SECURITIES ACT ACQUIRING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (II) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR
(IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, OR (B) BY SUBSEQUENT INVESTORS, AS SET FORTH IN (A)
ABOVE AND, IN ADDITION, TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF THE STATES AND OTHER JURISDICTIONS OF THE UNITED
STATES. THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY WITH
THE FOREGOING RESTRICTIONS.
THIS CAPITAL SECURITY WILL BE ISSUED, AND MAY BE HELD OR TRANSFERRED,
ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000.
ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CAPITAL SECURITY IN A
BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000, OR RESULTING
IN A HOLDER'S HOLDING CAPITAL SECURITIES IN A BLOCK HAVING A
LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID
AND OF NO LEGAL EFFECT WHATSOEVER, ANY SUCH TRANSFEREE SHALL BE DEEMED
NOT TO BE THE HOLDER OF SUCH CAPITAL SECURITY FOR ANY PURPOSE,
INCLUDING BUT NOT LIMITED TO THE RECEIPT OF DISTRIBUTIONS ON SUCH
CAPITAL SECURITY, AND SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO
INTEREST WHATSOEVER IN SUCH CAPITAL SECURITY."
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security that is a Global Capital
Security) pursuant to Rule 144 under the Securities Act or an effective
registration statement under the Securities Act:
35
(A) in the case of any Transfer Restricted Security that is a
Definitive Capital Security, the Securities Registrar shall permit the
Holder thereof to exchange such Transfer Restricted Security for a
Definitive Capital Security that does not bear the legend set forth
above and rescind any restriction on the transfer of such Transfer
Restricted Security; and
(B) any such Transfer Restricted Security represented by a Global
Capital Security shall not be subject to the provisions set forth in
clause (i) of this Section 5.11(f) (such sales or transfers being
subject only to the provisions of Section 5.11(c) hereof); provided,
however, that with respect to any request for an exchange of a
Transfer Restricted Security that is represented by a Global Capital
Security for a Definitive Capital Security that does not bear a
legend, which request is made in reliance upon Rule 144, the Holder
thereof shall certify in writing to the Securities Registrar that such
request is being made pursuant to Rule 144.
(g) Cancellation and/or Adjustment of Global Capital Security. At such
---------------------------------------------------------
time as all beneficial interests in a Global Capital Security have either been
exchanged for Definitive Capital Securities, redeemed, repurchased or canceled,
such Global Capital Security shall be returned to the Depository for
cancellation or retained and canceled by the Property Trustee. At any time
prior to such cancellation, if any beneficial interest in a Global Capital
Security is exchanged for Definitive Capital Securities, redeemed, repurchased
or canceled, the Liquidation Amount of Capital Securities represented by such
Global Capital Security shall be reduced and an adjustment shall be made on the
books and records of the Property Trustee (if it is then the Securities
Custodian for such Global Capital Security) with respect to such Global Capital
Security, by the Property Trustee or the Securities Custodian, to reflect such
reduction.
(h) Obligations With Respect to Transfers and Exchanges of Capital
--------------------------------------------------------------
Securities.
- ----------
(i) To permit registrations of transfers and exchanges, the
Administrative Trustees or any one of them shall execute and the Property
Trustee shall authenticate Definitive Capital Securities Certificates and
Global Capital Securities Certificates at the Securities Registrar's
written request.
(ii) No service charge shall be made for any registration of transfer
or exchange, but the Securities Registrar may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar governmental
charge payable in connection therewith.
(iii) The Securities Registrar shall not be required to register the
transfer of or exchange of any Capital Security called for redemption
during a period beginning 15 days before the day of selection for such
redemption.
36
(iv) Prior to the due presentation for registration of transfer of
any Capital Security, the Trust, the Property Trustee, the Administrative
Trustees, the Paying Agent or the Securities Registrar may deem and treat
the person in whose name a Capital Security is registered in the Securities
Register as the absolute owner of such Capital Security for the purpose of
receiving payment of Distributions on, and the Redemption Price or the
Repurchase Price of, such Capital Security and for all other purposes
whatsoever, whether or not such Capital Security is overdue, and none of
the Trust, the Trustees, the Paying Agent, or the Securities Registrar
shall be affected by notice to the contrary.
(v) All Capital Securities issued upon any transfer or exchange
pursuant to the terms of this Trust Agreement shall evidence the same
Capital Securities and shall be entitled to the same benefits under this
Trust Agreement as the Capital Securities surrendered upon such transfer or
exchange.
(i) Termination of Certain Restrictions on Transfer and Provisions as to
--------------------------------------------------------------------
Legends and Global Form. After a transfer of any Initial Capital Securities
- -----------------------
during the period of the effectiveness of, and pursuant to, a Shelf Registration
Statement with respect to the Initial Capital Securities, all requirements
pertaining to legends on such Initial Capital Securities shall cease to apply,
the requirements requiring that any such Initial Capital Securities issued to
certain Holders be issued in global form shall cease to apply, and certificated
Initial Capital Securities without legends shall be made available to the
Holders of such Initial Capital Securities. Upon the consummation of a
Registered Exchange Offer with respect to the Initial Capital Securities
pursuant to which Holders of Initial Capital Securities are offered Exchange
Capital Securities in exchange for their Initial Capital Securities, all
requirements pertaining to such Initial Capital Securities that Initial Capital
Securities issued to certain Holders be issued in global form shall cease to
apply and certificated Initial Capital Securities with the Restricted Securities
Legend shall be available to Holders of such Initial Capital Securities that do
not exchange their Initial Capital Securities, and Exchange Capital Securities
in certificated form shall be available to Holders that exchange such Initial
Capital Securities in such Registered Exchange Offer.
Section 5.12 Notices to Depository.
To the extent that a notice or other communication to the Owners is
required under this Trust Agreement, unless and until Definitive Capital
Securities Certificates shall have been issued to Owners pursuant to Sections
5.11 or 5.13, the Trustees shall give all such notices and communications
specified herein to be given to Owners to the Depository, and shall have no
obligations to the Owners.
37
Section 5.13 Definitive Capital Securities Certificates.
If (a) the Depositor advises the Administrative Trustees in writing that
the Depository is no longer willing or able to properly discharge its
responsibilities with respect to the Global Capital Securities Certificates, and
the Depositor is unable to locate a qualified successor, (b) the Depositor at
its option advises the Administrative Trustees in writing that it elects to
terminate the book-entry system through the Depository or (c) after the
occurrence of a Debenture Event of Default, Owners of Global Capital Securities
representing beneficial interests aggregating at least a majority of the
Liquidation Amount of the Capital Securities advise the Administrative Trustees
in writing that the continuation of a book-entry system through the Depository
is no longer in the best interest of the Owners of Global Capital Securities,
then the Administrative Trustees shall notify the other Trustees and the
Depository, and the Depository, in accordance with its customary rules and
procedures, shall notify all Depository Participants for whom it holds Capital
Securities of the occurrence of any such event and of the availability of the
Definitive Capital Securities Certificates to Owners of such class or classes,
as applicable, requesting the same. Upon surrender to the Administrative
Trustees of the typewritten Capital Securities Certificate or Certificates
representing the Global Capital Securities by the Depository, accompanied by
registration instructions, the Administrative Trustees, or any one of them,
shall execute the Definitive Capital Securities Certificates in accordance with
the instructions of the Depository and shall cause such Definitive Capital
Securities Certificates to be authenticated. Neither the Securities Registrar
nor the Administrative 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 Capital
Securities Certificates, the Administrative Trustees and the Property Trustee
shall recognize the Holders of the Definitive Capital Securities Certificates as
Securityholders. The Definitive Capital Securities Certificates shall be
typewritten, printed, lithographed or engraved or may be produced in any other
manner as is reasonably acceptable to the Administrative Trustees that meets the
requirements of any stock exchange or automated quotation system on which the
Capital Securities are then listed or approved for trading, as evidenced by the
execution thereof by the Administrative Trustees or any one of them.
Section 5.14 Rights of Securityholders.
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 2.9, and
the Securityholders shall not have any right or title therein other than the
undivided beneficial ownership 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 Trust Agreement. The Trust Securities
shall have no preemptive or similar rights and when issued and delivered to
Securityholders against payment of the purchase price therefor will be fully
paid and nonassessable by the Trust. The Holders of the Capital Securities, in
their capacities as such,
38
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.
(b) For so long as any Capital Securities remain Outstanding, if, upon a
Debenture Event of Default, the Debenture Trustee fails or the holders of not
less than 25% in principal amount of the outstanding Debentures fail to declare
the principal of all of the Debentures to be immediately due and payable, the
Holders of at least 25% in aggregate Liquidation Amount of the Capital
Securities then Outstanding shall have such right by a notice in writing to the
Depositor and the Debenture Trustee; and upon any such declaration such
principal amount of and the accrued interest on all of the Debentures shall
become immediately due and payable as set forth in the Indenture, provided that
the payment of principal, premium and interest on such Debentures shall remain
subordinated to the extent provided in the Indenture.
At any time after such a declaration of acceleration with respect to the
Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Debenture Trustee as in the Indenture
provided, the Holders of a majority in aggregate Liquidation Amount of the
Capital Securities, by written notice to the Property Trustee, the Depositor and
the Debenture Trustee, may rescind and annul such declaration and its
consequences if:
(i) the Depositor has paid or deposited with the Debenture
Trustee a sum sufficient to pay
(A) all overdue installments of interest (including any
Additional Interest) on all of the Debentures,
(B) the principal of (and premium, if any, on) any Debentures
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Debentures,
and
(C) all sums paid or advanced by the Debenture Trustee under the
Indenture and the reasonable compensation, expenses, disbursements and
advances of the Debenture Trustee and the Property Trustee, their
agents and counsel; and
(ii) all Events of Default with respect to the Debentures, other
than the non-payment of the principal of the Debentures which has become
due solely by such acceleration, have been cured or waived as provided in
Section 5.13 of the Indenture.
The Holders of a majority in aggregate Liquidation Amount of the Capital
Securities may, on behalf of the Holders of all the Capital Securities, waive
any past default under the Indenture, except a default in the payment of
principal, premium or interest (unless all Events of
39
Default with respect to the Debentures, other than the non-payment of the
principal of the Debentures which has become due solely by such acceleration,
have been cured or annulled as provided in Section 5.3 of the Indenture and the
Company has paid or deposited with the Debenture Trustee a sum sufficient to pay
all overdue installments of interest (including any Additional Interest) on the
Debentures, the principal of (and premium, if any, on) any Debentures which have
become due otherwise than by such declaration of acceleration and interest
thereon at the rate borne by the Debentures, and all sums paid or advanced by
the Debenture Trustee under the Indenture and the reasonable compensation,
expenses, disbursements and advances of the Debenture Trustee and the Property
Trustee, their agents and counsel) or a default in respect of a covenant or
provision which under the Indenture cannot be modified or amended without the
consent of the holder of each outstanding Debenture. No such rescission shall
affect any subsequent default or impair any right consequent thereon.
Upon receipt by the Property Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, by Holders of the Capital
Securities, a record date shall be established for determining Holders of
Outstanding Capital Securities entitled to join in such notice, which record
date shall be at the close of business on the day the Property Trustee receives
such notice. The Holders of Outstanding Capital Securities 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 5.14(b).
(c) For so long as any Capital Securities remain Outstanding, to the
fullest extent permitted by law and subject to the terms of this Trust Agreement
and the Indenture, upon a Debenture Event of Default specified in Section 5.1(1)
or 5.1(2) of the Indenture, any Holder of Capital Securities shall have the
right to institute a proceeding directly against the Depositor, pursuant to
Section 5.8 of the Indenture, for enforcement of payment to such Holder of the
principal amount of or premium or interest on Debentures having a principal
amount equal to the Liquidation Amount of the Capital Securities of such Holder
(a "Direct Action"). Except as set forth in Section 5.14(b) and this Section
5.14(c), the Holders of Capital Securities shall have no right to exercise
directly any right or remedy available to the holders of, or in respect of, the
Debentures.
40
Section 5.15 CUSIP Numbers.
The Administrative Trustees in issuing the Capital Securities may use
"CUSIP" numbers (if then generally in use), and, if so, the Property Trustee
shall use "CUSIP" numbers in notices of redemption or other notices 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 Capital Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Capital Securities, and any such redemption shall not be affected by any defect
in or omission of such numbers. The Administrative Trustees will promptly
notify the Property Trustee of any change in the CUSIP numbers.
ARTICLE VI
Acts of Securityholders; Meetings; Voting
Section 6.1 Limitations on Voting Rights.
(a) Except as provided in this Section, in Sections 5.14, 8.10 and 11.3 and
in the Indenture and as otherwise required by law, no Holder of Capital
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 Debentures are held by the Property Trustee, neither the
Property Trustee nor the Administrative Trustees shall (i) direct the time,
method and place of conducting any proceeding for any remedy available to the
Debenture Trustee, or executing any trust or power conferred on the Debenture
Trustee with respect to such Debentures, (ii) waive any past default which is
waiveable under Section 5.13 of the Indenture, (iii) exercise any right to
rescind or annul a declaration that the principal of all the Debentures shall be
due and payable or (iv) consent to any amendment, modification or termination of
the Indenture or the Debentures, where such consent shall be required, without,
in each case, obtaining the prior approval of the Holders of at least a majority
in Liquidation Amount of all Outstanding Capital Securities, provided, however,
that where a consent under the Indenture would require the consent of each
holder of Debentures affected thereby, no such consent shall be given by the
Property Trustee without the prior written consent of each Holder of Capital
Securities. Neither the Property Trustee nor the Administrative Trustees shall
revoke any action previously authorized or approved by a vote of the Holders of
Capital Securities, except by a subsequent vote of the Holders of Capital
Securities. The Property Trustee shall notify all Holders of the Capital
41
Securities of any notice of default received from the Debenture Trustee with
respect to the Debentures. In addition to obtaining the foregoing approvals of
the Holders of the Capital Securities, prior to taking any of the foregoing
actions, the Administrative Trustees shall, at the expense of the Depositor,
obtain an Opinion of Counsel experienced in such matters to the effect that such
action shall not cause the Trust to fail to be classified as a grantor trust or
cause the Trust to be taxable as a corporation for United States federal income
tax purposes.
(c) If any proposed amendment to the Trust Agreement provides for, or the
Property Trustee or the Administrative Trustees otherwise propose to effect, (i)
any action that would adversely affect in any material respect the powers,
preferences or special rights of the Capital Securities, whether by way of
amendment to the Trust Agreement or otherwise, or (ii) the dissolution, winding-
up or termination of the Trust, other than pursuant to the terms of this Trust
Agreement, then the Holders of Outstanding Capital 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 aggregate Liquidation Amount of the Outstanding Capital Securities.
Notwithstanding any other provision of this Trust Agreement, no amendment to
this Trust Agreement may be made if, as a result of such amendment, it would
cause the Trust to fail to be classified as a grantor trust or cause the Trust
to be taxable as a corporation for United States federal income tax purposes.
Section 6.2 Notice of Meetings.
Notice of all meetings of the Capital Securityholders, stating the time,
place and purpose of the meeting, shall be given by the Property Trustee
pursuant to Section 11.9 to each Capital Securityholder 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. The Administrative
Trustees shall provide notice to the Property Trustee of the requisite
information and in a sufficiently timely manner so as to permit the Property
Trustee to provide notices of meetings as contemplated by this Section 6.2.
Section 6.3 Meetings of Capital Securityholders.
No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Capital
Securityholders to vote on any matter upon the written request of the Capital
Securityholders of record of 25% of the Outstanding Capital Securities (based
upon their Liquidation Amount) and the Administrative Trustees or the Property
Trustee may, at any time in their discretion, call a meeting of Capital
Securityholders to vote on any matters as to which Capital Securityholders are
entitled to vote.
42
Capital Securityholders of record of 50% of the Outstanding Capital
Securities (based upon their Liquidation Amount), present in person or by proxy,
shall constitute a quorum at any meeting of Capital Securityholders.
If a quorum is present at a meeting, an affirmative vote by the Capital
Securityholders of record present, in person or by proxy, holding at least a
majority of the Outstanding Capital Securities (based upon their Liquidation
Amount) held by holders of record of Outstanding Capital Securities present,
either in person or by proxy, at such meeting shall constitute the action of the
Capital Securityholders, unless this Trust Agreement requires a greater number
of affirmative votes.
Section 6.4 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.
Section 6.5 Proxies, etc.
At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy, provided that no proxy shall be voted at any meeting
unless it shall have been placed on file with the Administrative Trustees, or
with such other officer or agent of the Trust as the Administrative Trustees may
direct, for verification prior to the time at which such vote shall be taken.
Proxies may be solicited in the name of the Administrative Trustees. Only
Security holders 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 6.6 Securityholder Action by Written Consent.
Any action which may be taken by Securityholders at a meeting may be taken
without a meeting if Securityholders holding at least a majority of all
Outstanding Trust Securities (based upon their Liquidation Amount) entitled to
vote in respect of such action (or such larger proportion thereof as shall be
required by any express provision of this Trust Agreement) shall consent to the
action in writing.
43
Section 6.7 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 Trust Agreement, or for the purpose of any
other action, the Administrative 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 a 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 6.8 Acts of Securityholders.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Trust Agreement to be given, made or
taken by Securityholders or Owners may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Securityholders
or Owners in person or by an agent duly appointed in writing; and, except as
otherwise expressly provided herein, such action shall become effective when
such instrument or instruments are delivered to an Administrative Trustee. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Securityholders or
Owners 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 Trust Agreement and (subject to Section 8.1) 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 any Trustee receiving the same deems sufficient.
The ownership of Capital 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.
44
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 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
Administrative Trustees or among such Securityholders or 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
Property Trustee shall be conclusive with respect to such matter.
Section 6.9 Inspection of Records.
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, 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.
Section 6.10 Reports to Holders of Capital Securities.
The Administrative Trustees shall, promptly upon receipt from the
Depositor, deliver to each of the Capital Securityholders, all annual reports,
information, documents and other reports filed by the Depositor with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act (whether or not
the Depositor is subject to those filing requirements), as well as the
consolidated financial statements, comparable to those which would have been
required to appear in annual or quarterly reports filed with the Commission and
delivered by the Depositor to the Property Trustee.
ARTICLE VII
Representations and Warranties
Section 7.1 Representations and Warranties of the Property Trustee and
the Delaware Trustee.
The Property Trustee and the Delaware Trustee, each severally on behalf of
and as to itself, hereby represents and warrants for the benefit of the
Depositor and the Securityholders that:
(a) the Property Trustee is a national banking association duly organized,
validly existing and in good standing under the laws of the United States of
America.
45
(b) the Property Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(c) the Delaware Trustee is a Delaware banking corporation duly organized,
validly existing and in good standing in the State of Delaware;
(d) the Delaware Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(e) this Trust Agreement has been duly authorized, executed and delivered
by the Property Trustee and the Delaware Trustee and constitutes the valid and
legally binding agreement of each of the Property Trustee and the Delaware
Trustee enforceable against each of them 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;
(f) the execution, delivery and performance of this Trust Agreement has
been duly authorized by all necessary corporate or other action on the part of
the Property Trustee and the Delaware Trustee and does not require any approval
of stockholders of the Property Trustee or the Delaware Trustee and such
execution, delivery and performance will not (i) violate the charter or by-laws
of the Property Trustee or the Delaware Trustee, (ii) violate any provision of,
or constitute, with or without notice or lapse of time, a default under, or
result in the creation or imposition of, any Lien on any properties included in
the Trust Property pursuant to the provisions of, any indenture, mortgage,
credit agreement, license or other agreement or instrument to which the Property
Trustee or the Delaware Trustee is a party or by which it is bound, or (iii)
violate any law, governmental rule or regulation of the United States in the
case of the Property Trustee, or the State of Delaware in the case of the
Delaware Trustee, as the case may be, governing the banking, trust or general
powers of the Property Trustee or the Delaware Trustee (as appropriate in
context) or any order, judgment or decree applicable to the Property Trustee or
the Delaware Trustee;
(g) neither the authorization, execution or delivery by the Property
Trustee or the Delaware Trustee of this Trust Agreement nor the consummation of
any of the transactions by the Property Trustee or the Delaware Trustee (as
appropriate in context) contemplated herein or therein requires 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 United States laws in the case of the Property Trustee, or Delaware law
in the case of the Delaware United States, governing the banking, trust or
general powers of the Property Trustee or the Delaware Trustee, as the case may
be; and
46
(h) there are no proceedings pending or, to the best of each of the
Property Trustee's and the Delaware Trustee's knowledge, threatened against or
affecting the Property Trustee or the Delaware Trustee in any court or before
any governmental authority, agency or arbitration board or tribunal which,
individually or in the aggregate, would materially and adversely affect the
Trust or would question the right, power and authority of the Property Trustee
or the Delaware Trustee, as the case may be, to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.
Section 7.2 Representations and Warranties of Depositor.
The Depositor hereby represents and warrants for the benefit of the
Securityholders that:
(a) the Trust Securities Certificates issued on behalf of the Trust at the
Closing Date and any Trust Securities Certificates issued on behalf of the Trust
as provided in the Exchange and Registration Rights Agreement have been or will
be (as the case may be) duly authorized and have been or will be duly and
validly executed, issued, authenticated and delivered by the Trustees pursuant
to the terms and provisions of, and in accordance with the requirements of, this
Trust Agreement and the Securityholders will be, as of such date, entitled to
the benefits of this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges payable by the
Trust (or the Trustees on behalf of the Trust) under the laws of the State of
Delaware or any political subdivision thereof in connection with the execution,
delivery and performance by the Property Trustee or the Delaware Trustee, as the
case may be, of this Trust Agreement.
ARTICLE VII
The Trustees
Section 8.1 Certain Duties and Responsibilities.
(a) The duties and responsibilities of the Trustees shall be as provided by
this Trust Agreement and, in the case of the Property Trustee, by the Trust
Indenture Act. Notwithstanding the foregoing, no provision of this Trust
Agreement 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
Trust Agreement relating to the conduct or affecting the liability of or
affording protection to the Trustees shall be subject to the provisions of this
Section. Nothing in this Trust Agreement shall be construed to release an
Administrative Trustee or the Delaware Trustee from
47
liability for its own grossly negligent action, its own grossly negligent
failure to act, or its own willful misconduct. To the extent that, at law or in
equity, an Administrative Trustee or the Delaware Trustee has duties (including
fiduciary duties) and liabilities relating thereto to the Trust or to the
Securityholders, such Administrative Trustee or Delaware Trustee shall not be
liable to the Trust or to any Securityholder for such Trustee's good faith
reliance on the provisions of this Trust Agreement. The provisions of this Trust
Agreement, to the extent that they restrict the duties and liabilities of the
Administrative Trustees and the Delaware Trustee otherwise existing at law or in
equity, are agreed by the Depositor and the Securityholders to replace such
other duties and liabilities of the Administrative Trustees and the Delaware
Trustee. The Property Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Trust Agreement and no implied
covenants or obligations shall be read in this Trust Agreement against the
Property Trustee.
(b) All payments made by the Property Trustee or a Paying Agent in respect
of the Trust Securities shall be made only from the revenue and proceeds from
the Trust Property and only to the extent that there shall be sufficient revenue
or proceeds from the Trust Property to enable the Property Trustee or a Paying
Agent 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
revenue and proceeds from the Trust Property to the extent legally available for
distribution to it as herein 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 8.1(b)
does not limit the liability of the Trustees expressly set forth elsewhere in
this Trust Agreement or, in the case of the Property Trustee, in the Trust
Indenture Act.
(c) No provision of this Trust Agreement shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(i) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was negligent
in ascertaining the pertinent facts;
(ii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a majority in Liquidation
Amount of the Trust Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under
this Trust Agreement;
(iii) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Payment Account shall be to
48
deal with such property in a similar manner as the Property Trustee deals
with similar property for its own account, subject to the protections and
limitations on liability afforded to the Property Trustee under this Trust
Agreement and the Trust Indenture Act;
(iv) the Property Trustee shall not be liable for any interest on
any money received by it except as it may otherwise agree in writing with
the Depositor; and money held by the Property Trustee need not be
segregated from other funds held by it except in relation to the Payment
Account maintained by the Property Trustee pursuant to Section 3.1 and
except to the extent otherwise required by law; and
(v) the Property Trustee shall not be responsible for monitoring
the compliance by the Administrative Trustees or the Depositor with their
respective duties under this Trust Agreement, nor shall the Property
Trustee be liable for the default or misconduct of the Administrative
Trustees or the Depositor.
Section 8.2 Certain Notices.
Within ten Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit, in
the manner and to the extent provided in Section 11.9, notice of such Event of
Default to the Securityholders, the Administrative Trustees and the Depositor,
unless such Event of Default shall have been cured or waived.
Within five Business Days after the receipt of notice of the Depositor's
exercise of its right to defer the payment of interest on the Debentures
pursuant to the Indenture, the Administrative Trustees shall transmit, in the
manner and to the extent provided in Section 11.9, notice of such exercise to
the Securityholders and the Property Trustee, unless such exercise shall have
been revoked.
Section 8.3 Certain Rights of Property Trustee.
Subject to the provisions of Section 8.1:
(a) the Property 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, debenture, note, other
evidence of indebtedness 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 Trust Agreement the Property
Trustee is required to decide between alternative courses of action or (ii) in
construing any of the
49
provisions of this Trust Agreement the Property Trustee finds the same ambiguous
or inconsistent with any other provisions contained herein or (iii) the Property
Trustee is unsure of the application of any provision of this Trust Agreement,
then, except as to any matter as to which the Capital Securityholders are
entitled to vote under the terms of this Trust Agreement, the Property Trustee
shall deliver a notice to the Depositor requesting written instructions of the
Depositor as to the course of action to be taken and the Property Trustee shall
take such action, or refrain from taking such action, as the Property Trustee
shall be instructed in writing to take, or to refrain from taking, by the
Depositor; provided, however, that if the Property Trustee does not receive such
instructions of the Depositor 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 Trust Agreement as it shall deem advisable and in the
best interests of the Securityholders, in which event the Property Trustee shall
have no liability except for its own bad faith, negligence or willful
misconduct;
(c) any direction or act of the Depositor or the Administrative Trustees
contemplated by this Trust Agreement shall be sufficiently evidenced by an
Officers' Certificate;
(d) whenever in the administration of this Trust Agreement, the Property
Trustee shall deem it desirable that a matter be established before undertaking,
suffering or omitting any action hereunder, the Property Trustee (unless other
evidence is herein specifically prescribed) may, in the absence of bad faith on
its part, request and rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Depositor or the Administrative
Trustees;
(e) the Property Trustee shall have no duty to see to any recording, filing
or registration of any instrument (including any financing or continuation
statement or any filing under tax or securities laws) or any rerecording,
refiling or reregistration thereof;
(f) the Property Trustee may consult with counsel of its selection (which
counsel may be counsel to the Depositor or any of its Affiliates, and may
include any of its employees) and the advice of such counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon and in
accordance with such advice; the Property Trustee shall have the right at any
time to seek instructions concerning the administration of this Trust Agreement
from any court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Trust Agreement at the request or
direction of any of the Securityholders pursuant to this Trust Agreement, unless
such Securityholders shall have offered to the Property Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
50
(h) the Property Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other evidence of indebtedness or other paper or document,
unless requested in writing to do so by one or more Securityholders, but the
Property Trustee may make such further inquiry or investigation into such facts
or matters as it may see fit;
(i) the Property 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 Property Trustee shall be responsible for its own
negligence or recklessness with respect to selection of any agent or attorney
appointed by it hereunder;
(j) whenever in the administration of this Trust Agreement the Property
Trustee shall deem it desirable to receive written instructions with respect to
enforcing any remedy or right or taking any other action hereunder the Property
Trustee (i) may request written instructions from the Holders of the Trust
Securities which written instructions may only be given by the Holders of the
same proportion in Liquidation Amount of the Trust Securities as would be
entitled to direct the Property Trustee under the terms of the Trust Securities
in respect of such remedy, right or action, (ii) may refrain from enforcing such
remedy or right or taking such other action until such written instructions are
received, and (iii) shall be protected in acting in accordance with such written
instructions; and
(k) except as otherwise expressly provided by this Trust Agreement, the
Property Trustee shall not be under any obligation to take any action that is
discretionary under the provisions of this Trust Agreement.
No provision of this Trust Agreement shall be deemed to impose any duty or
obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall be
construed to be a duty.
Section 8.4 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 Depositor of the proceeds of the Debentures.
51
Section 8.5 May Hold Securities.
Any Trustee or any other agent of any Trustee or the Trust, in its
individual or any other capacity, may become the owner or pledgee of Trust
Securities and, subject to Sections 8.8 and 8.13, except as provided in the
definition of the term "Outstanding" in Article I, may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other
agent.
Section 8.6 Compensation; Indemnity; Fees.
The Depositor shall:
(a) pay to the Trustees from time to time such compensation as shall be
agreed in writing with the Holder of the Common Securities for all services
rendered by them hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust);
(b) except as otherwise expressly provided herein, 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 Trust Agreement
(including the reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence (in the case of the Property Trustee), its gross
negligence (in the case of the Administrative Trustees and the Delaware
Trustee), or its bad faith; and
(c) to the fullest extent permitted by applicable law, indemnify and hold
harmless (i) each Trustee, (ii) any Affiliate of any Trustee, (iii) any officer,
director, shareholder, employee, representative or agent of any Trustee, and
(iv) any employee or agent of the Trust or its Affiliates, (referred to herein
as an "Indemnified Person") from and against any and all loss, damage,
liability, tax, penalty, expense or claim of any kind or nature whatsoever
incurred by such Indemnified Person, including, without limitation, any
liability arising under federal or state securities laws, by reason of the
creation, operation or termination of the Trust or any act or omission performed
or omitted by such Indemnified Person in good faith on behalf of the Trust and
in a manner such Indemnified Person reasonably believed to be within the scope
of authority conferred on such Indemnified Person by this Trust Agreement,
except that no Indemnified Person shall be entitled to be indemnified in respect
of any loss, damage or claim incurred by such Indemnified Person by reason of
its negligence (in the case of the Property Trustee), its gross negligence (in
the case of the Administrative Trustees and the Delaware Trustee), or its
willful misconduct with respect to such acts or omissions. When the Property
Trustee incurs expenses or renders services in connection with an Event of
Default specified in Section 5.1(4) or Section 5.1(5) of the Indenture, the
expenses (including the reasonable charges and expenses
52
of its counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable federal or state bankruptcy,
insolvency or other similar law.
The provisions of this Section 8.6 shall survive the termination of this
Trust Agreement.
No Trustee may claim any lien or charge on any Trust Property as a result
of any amount due pursuant to this Section 8.6.
The Depositor and any Trustee (in the case of the Property Trustee, subject
to Section 8.8 hereof) may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of Trust
Securities shall have no rights by virtue of this Trust Agreement in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. Neither the Depositor, nor any Trustee,
shall be obligated to present any particular investment or other opportunity to
the Trust even if such opportunity is of a character that, if presented to the
Trust, could be taken by the Trust, and the Depositor or any Trustee shall have
the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Trustee may engage or be interested in any financial or other
transaction with the Depositor or any Affiliate of the Depositor, or may act as
depository for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Depositor or its Affiliates.
Section 8.7 Corporate Property Trustee Required; Eligibility of Trustees.
(a) There shall at all times be a Property Trustee hereunder with respect
to the Trust Securities. The Property Trustee shall be a Person that is eligible
pursuant to the Trust Indenture Act to act as such and 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 Property 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.
(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative 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 that
entity.
53
(c) There shall at all times be a Delaware Trustee hereunder 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 with its principal place of business in the State of
Delaware and that otherwise meets the requirements of applicable Delaware law
that shall act through one or more persons authorized to bind such entity.
Section 8.8 Conflicting Interests.
If the Property Trustee has or shall acquire a conflicting interest within
the meaning of the Trust Indenture Act, the Property 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 Trust
Agreement.
Section 8.9 Co-Trustees and Separate Trustee.
Unless an Event of Default shall have occurred and be continuing, at any
time or times, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust Property may
at the time be located, the Depositor and the Administrative Trustees, by agreed
action of the majority of such Trustees, shall have power to appoint, and upon
the written request of the Administrative Trustees, the Depositor shall for such
purpose join with the Administrative Trustees in the execution, delivery, and
performance of all instruments and agreements necessary or proper to appoint,
one or more Persons approved by the Property Trustee either to act as co-
trustee, jointly with the Property Trustee, of all or any part of such Trust
Property, or to the extent required by law to act as separate trustee of any
such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or Persons in the capacity
aforesaid, any property, title, right or power deemed necessary or desirable,
subject to the other provisions of this Section. If the Depositor does not join
in such appointment within 15 days after the receipt by it of a request so to
do, or in case a Debenture Event of Default has occurred and is continuing, the
Property Trustee alone shall have power to make such appointment. Any co-trustee
or separate trustee appointed pursuant to this Section shall either be (i) a
natural person who is at least 21 years of age and a resident of the United
States or (ii) a legal entity with its principal place of business in the United
States that shall act through one or more persons authorized to bind such
entity.
Should any written instrument from the Depositor 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 Depositor.
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:
54
(a) The Trust Securities shall be executed 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 specified hereunder shall be exercised
solely by such Trustees and not by such co-trustee or separate trustee.
(b) The rights, powers, duties, and obligations hereby conferred or imposed
upon the Property Trustee in respect of any property covered by such appointment
shall be conferred or imposed upon and exercised or performed by the Property
Trustee or by the Property 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 Property 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.
(c) The Property Trustee at any time, by an instrument in writing executed
by it, with the written concurrence of the Depositor, may accept the resignation
of or remove any co-trustee or separate trustee appointed under this Section,
and, in case a Debenture Event of Default has occurred and is continuing, the
Property Trustee shall have power to accept the resignation of, or remove, any
such co-trustee or separate trustee without the concurrence of the Depositor.
Upon the written request of the Property Trustee, the Depositor shall join with
the Property 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.
(d) No co-trustee or separate trustee hereunder shall be personally liable
by reason of any act or omission of the Property Trustee or any other trustee
hereunder.
(e) The Property Trustee shall not be liable by reason of any act of a co-
trustee or separate trustee.
(f) Any Act of Holders delivered to the Property 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 Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 8.11.
Subject to the immediately preceding paragraph, the Relevant Trustee may
resign at any time by giving written notice thereof to the Common
Securityholders. If the instrument of
55
acceptance by the successor Trustee required by Section 8.11 shall not have been
delivered to the Relevant Trustee within 30 days after the giving of such notice
of resignation, the Relevant Trustee may petition, at the expense of the Trust,
any court of competent jurisdiction for the appointment of a successor Relevant
Trustee.
Unless a Debenture Event of Default shall have occurred and be continuing,
any Trustee may be removed at any time by Act of the Common Securityholder. If a
Debenture Event of Default shall have occurred and be continuing, the Property
Trustee or the Delaware Trustee, or both of them, may be removed at such time by
Act of the Holders of a majority in Liquidation Amount of the Capital
Securities, delivered to the Relevant Trustee (in its individual capacity and on
behalf of the Trust). An Administrative Trustee may be removed by the Common
Securityholder at any time. If the instrument of acceptance by the successor
Trustee required by Section 8.11 shall not have been delivered to the Relevant
Trustee within 30 days after such removal, the Relevant Trustee may petition, at
the expense of the Trust, any court of competent jurisdiction for the
appointment of a successor Relevant Trustee.
If any Trustee shall resign, be removed or become incapable of acting as
Trustee, or if a vacancy shall occur in the office of any Trustee for any cause,
at a time when no Debenture Event of Default shall have occurred and be
continuing, the Common Securityholder, by Act of the Common Securityholder
delivered to the retiring Trustee, shall promptly appoint a successor Trustee or
Trustees, and the retiring Trustee shall comply with the applicable requirements
of Section 8.11. If the Property Trustee or the Delaware Trustee shall resign,
be removed or become incapable of continuing to act as the Property Trustee or
the Delaware Trustee, as the case may be, at a time when a Debenture Event of
Default shall have occurred and be continuing, the Capital Securityholders, by
Act of the Securityholders of a majority in Liquidation Amount of the Capital
Securities then Outstanding delivered to the retiring Relevant Trustee, shall
promptly appoint a successor Relevant Trustee or Trustees, and such successor
Trustee shall comply with the applicable requirements of Section 8.11. If an
Administrative Trustee shall resign, be removed or become incapable of acting as
an Administrative Trustee, at a time when a Debenture Event of Default shall
have occurred and be continuing, the Common Securityholder by Act of the Common
Securityholder delivered to the Administrative Trustees shall promptly appoint a
successor Administrative Trustee or Administrative Trustees and such successor
Administrative Trustee or Trustees shall comply with the applicable requirements
of Section 8.11. If no successor Relevant Trustee shall have been so appointed
by the Common Securityholder or the Capital Securityholders 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 Property Trustee shall give notice of each resignation and each removal
of a Trustee and each appointment of a successor Trustee to all Securityholders
in the manner provided in Section 11.9 and shall give notice to the Depositor.
Each notice shall include the name of the
56
successor Relevant Trustee and the address of its Corporate Trust Office if it
is the Property Trustee.
Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Delaware Trustee who is
a natural person dies or becomes, in the opinion of the Depositor, incompetent
or incapacitated, the vacancy created by such death, incompetence or incapacity
may be filled by (a) the unanimous act of the remaining Administrative Trustees
if there are at least two of them or (b) otherwise by the Depositor (with the
successor in each case being a Person who satisfies the eligibility requirement
for Administrative Trustees or Delaware Trustee, as the case may be, set forth
in Section 8.7).
Section 8.11 Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Relevant Trustee, the
retiring Relevant Trustee and each successor Relevant Trustee with respect to
the Trust Securities shall execute and deliver an instrument wherein each
successor Relevant Trustee shall accept such appointment and which shall contain
such provisions as shall be necessary or desirable to transfer and confirm to,
and to vest in, each successor Relevant Trustee all the rights, powers, trusts
and duties of the retiring Relevant Trustee with respect to the Trust Securities
and the Trust, and upon the execution and delivery of such instrument the
resignation or removal of the retiring Relevant Trustee shall become effective
to the extent provided therein and each 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 written
request of the Trust or any successor Relevant Trustee such retiring Relevant
Trustee shall, upon payment of its charges, duly assign, transfer and deliver to
such successor Relevant Trustee all Trust Property, all proceeds thereof and
money held by such retiring Relevant Trustee hereunder with respect to the Trust
Securities and the Trust.
Upon written request of any such successor Relevant Trustee, the Trust
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 Property Trustee or the Delaware Trustee 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, without the execution or filing of any paper
57
or any further act on the part of any of the parties hereto; provided such
Person shall be otherwise qualified and eligible under this Article.
Section 8.13 Preferential Collection of Claims Against Depositor or Trust.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Trust or any other obligor upon the
Trust Securities or the property of the Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions on
the Trust Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any Distributions
owing and unpaid in respect of the Trust Securities and to file such other
papers or documents as may be necessary or advisable in order to have the claims
of the Property Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Property Trustee, its agents and
counsel) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or compensation affecting the Trust
Securities or the rights of any Holder thereof or to authorize the Property
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 8.14 Reports by Property Trustee.
(a) The Property Trustee shall transmit to Securityholders such reports
concerning the Property Trustee and its actions under this Trust Agreement as
may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant thereto. If required by
58
Section 313(a) of the Trust Indenture Act, the Property Trustee shall, within
sixty days after each May 15 following the date of this Trust Agreement deliver
to Securityholders a brief report, dated as of such May 15, which complies with
the provisions of such Section 313(a).
(b) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Property Trustee with each national stock exchange, the
Nasdaq National Market or such other interdealer quotation system or self-
regulatory organization upon which the Trust Securities are listed or traded, if
any, with the Commission and with the Depositor. The Depositor will promptly
notify the Property Trustee of any such listing or trading.
Section 8.15 Reports to the Property Trustee.
The Depositor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(a) of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the Trust Indenture
Act. Delivery of such reports, information and documents to the Property
Trustee is for informational purposes only and the Property Trustee's receipt of
such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Trust's compliance with any of its covenants hereunder (as to which the Property
Trustee is entitled to rely exclusively on Officers' Certificates).
Section 8.16 Evidence of Compliance with Conditions Precedent.
Each of the Depositor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Trust Agreement that relate
to any of the matters set forth in Section 314 (c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) of the Trust Indenture Act shall be given in the form of an
Officers' Certificate.
Section 8.17 Number of Trustees.
(a) The number of Trustees shall initially be five, provided that the
Holder of all of the Common Securities by written instrument may increase or
decrease the number of Administrative Trustees. The Property Trustee and the
Delaware Trustee may be the same Person.
(b) If a Trustee ceases to hold office for any reason and the number of
Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the
number of Trustees is increased
59
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) The death, resignation, retirement, removal, bankruptcy, incompetence
or incapacity to perform the duties of a Trustee shall not operate to dissolve,
terminate or annul the Trust. Whenever a vacancy in the number of Administrative
Trustees shall occur, until such vacancy is filled by the appointment of an
Administrative Trustee in accordance with Section 8.10, the Administrative
Trustees in office, regardless of their number (and notwithstanding any other
provision of this Agreement), shall have all the powers granted to the
Administrative Trustees and shall discharge all the duties imposed upon the
Administrative Trustees by this Trust Agreement.
Section 8.18 Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
2.7(a), including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) The Administrative Trustees shall have power to delegate from time to
time to such of their number or to the Depositor the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Administrative Trustees or otherwise as the Administrative Trustees may
deem expedient, to the extent such delegation is not prohibited by applicable
law or contrary to the provisions of this Trust Agreement, as set forth herein.
ARTICLE IX
Termination, Liquidation and Merger
Section 9.1 Termination Upon Expiration Date.
Unless earlier dissolved, the Trust shall automatically dissolve on
February 15, 2028 (the "Expiration Date"), and shall terminate following the
distribution of the Trust Property in accordance with Section 9.4.
Section 9.2 Early Termination.
The first to occur of any of the following events is an "Early Termination
Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the dissolution
or liquidation of, the Depositor;
60
(b) the written direction to the Property Trustee from the Depositor at any
time to dissolve the Trust and, after satisfaction of liabilities to creditors
of the Trust as provided by applicable law, distribute Debentures to
Securityholders in exchange for the Capital Securities (which direction is
optional and wholly within the discretion of the Depositor);
(c) the redemption of all of the Capital Securities in connection with the
redemption or maturity of all of the Debentures;
(d) the repurchase of all of the Capital Securities in connection with the
occurrence of a Change of Control; and
(e) the entry of an order for dissolution of the Trust by a court of
competent jurisdiction.
Section 9.3 Termination.
The respective obligations and responsibilities of the Trustees and the
Trust created and continued hereby shall terminate upon the latest to occur of
the following: (a) the distribution by the Property Trustee to Securityholders
upon the liquidation of the Trust pursuant to Section 9.4, or upon the
redemption or repurchase of all of the Trust Securities pursuant to Section 4.2
or Section 10.10, respectively, of all amounts required to be distributed
hereunder upon the final payment of the Trust Securities; (b) the payment of any
expenses owed by the Trust; (c) the discharge of all administrative duties of
the Administrative Trustees, including the performance of any tax reporting
obligations with respect to the Trust or the Securityholders; and (d) the filing
with the Secretary of State of the State of Delaware of a certificate of
cancellation for the Trust as required by the Delaware Business Trust Act.
Section 9.4 Liquidation.
(a) If an Early Termination Event specified in clause (a), (b) or (e) of
Section 9.2 occurs or upon the Expiration Date, the Trust shall be liquidated by
the Property Trustee and the Administrative Trustees as expeditiously as such
Trustees determine to be possible by distributing, after satisfaction or the
making of reasonable provisions for the payment of liabilities to creditors of
the Trust as provided by applicable law, to each Securityholder a Like Amount of
Debentures, subject to Section 9.4(d). Notice of liquidation shall be given by
the Property Trustee by first-class mail, postage prepaid mailed not later than
30 nor more than 60 days prior to the 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 CUSIP Number of the Trust Securities;
(ii) state the Liquidation Date;
61
(iii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debentures; and
(iv) provide such information with respect to the mechanics by
which Holders may exchange Trust Securities Certificates for Debentures, or
if Section 9.4(d) applies receive a Liquidation Distribution, as the
Administrative Trustees or the Property Trustee shall deem appropriate.
(b) Except where Section 9.2(c), 9.2(d) or 9.4(d) applies, in order to
effect the liquidation of the Trust and distribution of the Debentures to
Securityholders, the Property 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 the Administrative
Trustees shall direct to effect the distribution of Debentures in exchange for
the Outstanding Trust Securities Certificates.
(c) Except where Section 9.2(c), 9.2(d) or 9.4(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates representing a Like Amount of Debentures will be
issued to Holders of Trust Securities Certificates, upon surrender of such
certificates to the Administrative Trustees or their agent for exchange, (iii)
the Depositor shall use its best efforts to have the Debentures listed on the
New York Stock Exchange or on such other exchange, interdealer quotation system
or self-regulatory organization as the Capital Securities are then listed or
traded, (iv) any Trust Securities Certificates not so surrendered for exchange
will be deemed to represent a Like Amount of Debentures, accruing interest at
the rate provided for in the Debentures from the last Distribution Date on which
a Distribution was made on such Trust Securities 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 Debentures) and (v) all rights of
Securityholders holding Trust Securities will cease, except the right of such
Securityholders to receive Debentures upon surrender of Trust Securities
Certificates.
(d) In the event that, notwithstanding the other provisions of this Section
9.4, whether because of an order for dissolution entered by a court of competent
jurisdiction or otherwise, distribution of the Debentures in the manner provided
herein is determined by the Property Trustee not to be practical, the Trust
Property shall be liquidated, and the Trust shall be dissolved, wound-up or
terminated, by the Property Trustee. In such event, on the date of the
dissolution, winding-up or other termination of the Trust, Securityholders will
be entitled to receive out of the assets of the Trust available for distribution
to Securityholders, after satisfaction of liabilities to creditors of the Trust
as provided by applicable law, an amount equal to the Liquidation Amount per
Trust Security plus accumulated and unpaid Distributions thereon
62
to the date of payment (such amount being the "Liquidation Distribution"). If,
upon any such dissolution, winding up or termination, the Liquidation
Distribution can be paid only in part because the Trust has insufficient assets
available to pay in full the aggregate Liquidation Distribution, then, 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 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 Capital Securities, except that, if a
Debenture Event of Default has occurred and is continuing as a result of any
failure by the Depositor to pay any principal of (and premium, if any) or any
interest on the Debentures when due, the Capital Securities shall have a
priority over the Common Securities such that no Holder of Common Securities
will be entitled to receive any Liquidation Distributions before the Holders of
Capital Securities have been paid in full.
Section 9.5 Mergers, Consolidations, Amalgamations or Replacements 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 corporation or other Person, except pursuant
to this Article IX. At the request of the Depositor, and with the consent of the
Holders of at least a majority in aggregate Liquidation Amount of the Capital
Securities, 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, that (i) such successor entity either (a) expressly assumes all of the
obligations of the Trust with respect to the Capital Securities or (b)
substitutes for the Capital Securities other securities having substantially the
same terms as the Capital Securities (the "Successor Securities") so long as the
Successor Securities rank the same as the Capital Securities rank in priority
with respect to distributions and payments upon liquidation, redemption and
otherwise, (ii) the Depositor expressly appoints a trustee of such successor
entity possessing the same powers and duties as the Property Trustee as the
holder of the Debentures, (iii) the Successor Securities are listed or traded,
or any Successor Securities will be listed upon notification of issuance, on any
national securities exchange or other organization on which the Capital
Securities are then listed or traded, if any, (iv) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause the
Capital Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the holders of the
Capital Securities (including any Successor Securities) in any material respect,
(vi) such successor entity has a purpose identical to that of the Trust, (vii)
prior to such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease, the Depositor has received an Opinion of Counsel to the
effect that (a) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Capital Securities (including any Successor
Securities) in any material respect, and (b) following such merger,
consolidation, amalgamation, replacement,
63
conveyance, transfer or lease, neither the Trust nor such successor entity will
be required to register as an investment company under the 1940 Act and (viii)
the Depositor owns all of the common securities of such successor entity and
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee. Notwithstanding the
foregoing, the Trust shall not, except with the consent of Holders of 100% in
aggregate Liquidation Amount of the Capital 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 Person or permit
any other Person to consolidate, amalgamate, merge with or into, or replace it
if such consolidation, amalgamation, merger, replacement, conveyance, transfer
or lease would cause the Trust or the successor entity to be taxable as a
corporation or to be classified as other than a grantor trust for United States
federal income tax purposes. An Administrative Trustee shall furnish the
Delaware Trustee at least five Business Days prior written notice of the
consummation of any merger, consolidation, amalgamation or replacement; provided
that failure to provide such notice shall not affect the validity of any such
transaction.
ARTICLE X
Repurchase Upon Change of Control
Section 10.1 Repurchase.
(a) Upon the occurrence of a Change of Control, each Holder of Capital
Securities will have the right, at such Holder's option, to require the Trust to
repurchase any Capital Security of such Holder, and upon the exercise of such
right the Trust shall repurchase, all of such Holder's Capital Securities, or
any portion of the Liquidation Amount thereof, at a cash price equal to 101% of
the aggregate Liquidation Amount of such Capital Securities plus accumulated and
unpaid Distributions thereon to but not including the Repurchase Date (the
"Repurchase Price"), provided, however, that upon a repurchase in part of its
Capital Securities, such Holder shall retain ownership of Capital Securities
having a minimum Liquidation Amount of $100,000.
(b) Within three Business Days following the receipt, pursuant to the
Indenture, by the Trust as holder of the Debentures or the receipt by the
Property Trustee of a notice from the Depositor to the effect that a Change of
Control has occurred, the Property Trustee will send a notice (a "Change of
Control Notice") to each Holder of Capital Securities with a copy to the
Property Trustee by first-class mail, postage prepaid, at such Holder's address
appearing in the Security Register, which Change of Control Notice shall state:
(i) that a Change of Control has occurred and that each Holder has
the right to require the Trust to repurchase its Capital Securities, in whole or
in part, at the Repurchase Price;
64
(ii) the circumstances and relevant facts regarding such Change of
Control (including any relevant information with respect to the transaction
giving rise to such Change of Control);
(iii) the date by which the repurchase right must be exercised;
(iv) a description of the procedure which a Holder must follow to
exercise a repurchase right and the place or places where such Securities are to
be surrendered for payment of the Repurchase Price and accrued interest, if any;
(v) the Repurchase Date (which shall be the date selected by the
Depositor as the repurchase date for the Debentures); and
(vi) that on the Repurchase Date, the Repurchase Price will become
due and payable upon each such Capital Security (or portion thereof) designated
by the Holder for repurchase, and that Distributions thereon, if any, shall
cease to accumulate on and after said date.
Section 10.2 Repurchase Procedures.
(a) Holders wishing to exercise their right to cause a repurchase of
Capital Securities pursuant to this Article X ("Electing Holders") shall notify
the Property Trustee in writing not later than 12:00 noon, New York City time,
on the 30th day after receipt of the Change of Control Notice of their election
(a "Repurchase Election") to do so, which notice shall identify the Capital
Securities to be repurchased (including CUSIP number, if a CUSIP number has been
assigned to such Capital Securities). Any Repurchase Election shall be deemed
irrevocable from the date it is made.
(b) Upon the receipt of Repurchase Elections from Electing Holders, the
Property Trustee as holder of the Debentures shall notify the Depositor, in
accordance with Section 10.10(c) of the Indenture, of its election to require
the Depositor to repurchase a Like Amount of Debentures under the Indenture upon
the terms and conditions set forth therein. The Property Trustee shall not cause
the Depositor to repurchase any Debentures under the Indenture unless, and then
only to the extent, Electing Holders shall make Repurchase Elections.
(c) Trust Securities repurchased on the Repurchase Date shall be
repurchased at the Repurchase Price with the proceeds from the contemporaneous
repurchase by the Depositor of a Like Amount of Debentures as contemplated by
Section 10.2(b). Repurchases of Trust Securities shall be made and the
Repurchase Price shall be payable on the Repurchase Date only to the extent that
the Trust has funds then on hand and available in the Payment Account for the
payment of such Repurchase Price.
65
(d) If the Electing Holders make a Repurchase Election, then, by 12:00
noon, New York City time, on the Repurchase Date, subject to Section 10.2(c), in
the case of Capital Securities held in book-entry form, the Property Trustee
will deposit irrevocably with the Depository for the Capital Securities funds
sufficient to pay the applicable Repurchase Price and will give such Depository
irrevocable instructions and authority to pay the Repurchase Price to the
Electing Holders thereof. With respect to Capital Securities not held in book-
entry form, the Property Trustee, subject to Section 10.2(c), will irrevocably
deposit with the Paying Agent for the Capital Securities funds sufficient to pay
the applicable Repurchase Price and will give such Paying Agent irrevocable
instructions and authority to pay the Repurchase Price to the Electing Holders
thereof upon surrender of their Capital Securities Certificates.
Notwithstanding the foregoing, Distributions payable on or prior to the
Repurchase Date for any Capital Securities of Electing Holders shall be payable
to such Electing Holders as they appear on the Securities Register for the
Capital Securities on the relevant record dates for the related Distribution
Dates. If Election Notices shall have been given and funds deposited as
required, then upon the date of such deposit, all rights of Electing Holders
will cease with respect to their Capital Securities that are being repurchased,
except the right of such Electing Holders to receive the Repurchase Price, but
without interest on such Repurchase Price, and the Capital Securities elected
for repurchase hereunder will cease to be outstanding. In the event that any
date fixed for the repurchase of Capital Securities is not a Business Day, then
payment of the Repurchase 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 Repurchase Price is improperly withheld
or refused and not paid either by the Trust or by the Depositor pursuant to the
Guarantee, Distributions on such Capital Securities will continue to accumulate
at the then applicable rate, from the Repurchase Date originally established by
the Trust for such Capital Securities to the date such Repurchase Price is
actually paid, in which case the actual payment date will be the date fixed for
repurchase for purposes of calculating the Repurchase Price.
(e) Payment of the Repurchase Price on the Capital Securities of Electing
Holders shall be made to the record holders thereof as they appear on the
Securities Register for the Capital Securities on the relevant record date,
which shall be one Business Day prior to the relevant Repurchase Date; provided,
however, that in the event that any of the Capital Securities are not held in
book-entry form, the relevant record date for all Capital Securities being
repurchased shall be the date 15 days prior to the Repurchase Date.
(f) To the extent that the Trust has funds on hand and available in the
Payment Account for the payment of the Repurchase Price (from the proceeds of
the corresponding repurchase by the Depositor of the Like Amount of the
Debentures or from payments made by the Depositor pursuant to the Guarantee), on
and after the Repurchase Date, Distributions
66
on the Capital Securities subject to the repurchase will cease to accumulate
(and interest on the Like Amount of the Debentures will cease to accrue).
(g) If any Repurchase Elections have been made, the Capital Securities or
portion of Capital Securities subject to such Repurchase Elections shall become
due and payable on the date and at the place or places stated in such notice at
the applicable Repurchase Price. On presentation and surrender of such Capital
Securities at the place of payment specified in said notice, the said securities
or the specified portions thereof shall be paid and repurchased by the Property
Trustee at the applicable Repurchase Price to the Repurchase Date; provided,
however, that installment of Distributions whose Stated Maturity is on or prior
to the Repurchase Date will be payable to the Holders of such Capital
Securities, or one or more Predecessor Capital Securities, registered as such at
the close of business on the relevant Record Dates according to their terms.
(h) Upon presentation of any Capital Security repurchased in part only, an
Administrative Trustee shall execute and the Property Trustee shall authenticate
and make available for delivery to the Holder thereof, at the expense of the
Depositor, a new Capital Security or Securities of authorized denominations, in
aggregate Liquidation Amount equal to the non-repurchased portion of the Capital
Security so presented and having the same original issue date, and terms. If a
Global Capital Security is so surrendered, such new Capital Security will also
be a Global Capital Security.
Section 10.3 Repurchase of Common Securities.
Upon the repurchase of Capital Securities pursuant to Section 10.1, the
Property Trustee shall cause the repurchase of a pro rata Liquidation Amount of
Common Securities.
ARTICLE XI
Miscellaneous Provisions
Section 11.1 Limitation of Rights of Securityholders.
The death, incapacity, liquidation, dissolution, termination or bankruptcy
of any Person having an interest, beneficial or otherwise, in Trust Securities
shall not operate to terminate this Trust Agreement, 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 any court 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.
67
Section 11.2 Liability of the Common Securityholder.
The Depositor shall be liable for all of the debts and obligations of the
Trust (other than with respect to the Securities) to the extent not satisfied
out of the Trust's assets.
Section 11.3 Amendment.
(a) This Trust Agreement may be amended from time to time by the Property
Trustee, the Administrative Trustees and the Depositor, without the consent of
any Securityholders, (i) to cure any ambiguity, correct or supplement any
provision herein which may be inconsistent with any other provision herein, or
to make any other provisions with respect to matters or questions arising under
this Trust Agreement, which shall not be inconsistent with the other provisions
of this Trust Agreement, or (ii) to modify, eliminate or add to any provisions
of this Trust Agreement to such extent as shall be necessary to ensure that the
Trust will be classified for United States federal income tax purposes as a
grantor trust and not be taxable as a corporation at all times that any Trust
Securities are outstanding or to ensure that the Trust will not be required to
register as an investment company under the 1940 Act; provided, however, that in
the case of clause (i) or clause (ii), such action shall not adversely affect in
any material respect the interests of any Securityholder, and any amendments of
this Trust Agreement shall become effective when notice thereof is given to the
Securityholders.
(b) Except as provided in Section 11.3(c) hereof, any provision of this
Trust Agreement may be amended by the Trustees and the Depositor with (i) the
consent of Trust Securityholders representing not less than a majority (in
aggregate Liquidation Amounts) of the Trust Securities then Outstanding 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 exemption from status of an
investment company under the 1940 Act or the Trust's status as a grantor trust
for United States federal income tax purposes and will not result in the Trust
being taxable as a corporation for United States federal income tax purposes.
(c) In addition to and notwithstanding any other provision in this Trust
Agreement, without the consent of each affected Securityholder (such consent
being obtained in accordance with Section 6.3 or 6.6 hereof), this Trust
Agreement 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 or (ii) restrict the right of a Securityholder to institute suit
for the enforcement of any such payment on or after such date; notwithstanding
any other provision herein, without the unanimous consent of the Securityholders
(such consent being obtained in accordance with Section 6.3 or 6.6 hereof), this
paragraph (c) of this Section 11.3 may not be amended.
68
(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to (i) fail or cease to qualify for the exemption
from status of an investment company under the 1940 Act, (ii) fail or cease to
be classified as a grantor trust for United States federal income tax purposes
or (iii) be taxable as a corporation for United States federal income tax
purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary, (i)
without the consent of the Depositor, this Trust Agreement may not be amended in
a manner which imposes any additional obligation on the Depositor and (ii)
without the consent of the Delaware Trustee, this Trust Agreement may not be
amended if the amendment affects the rights, powers, duties, obligations or
immunities of the Delaware Trustee.
(f) In the event that any amendment to this Trust Agreement is made, the
Administrative Trustees shall promptly provide to the Depositor a copy of such
amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be required
to enter into any amendment to this Trust Agreement which affects its own
rights, powers, duties, obligations or immunities under this Trust Agreement.
The Property Trustee shall be entitled to receive an Opinion of Counsel and an
Officers' Certificate stating that any amendment to this Trust Agreement is in
compliance with this Trust Agreement and shall be fully protected against
liability in relying on such document.
Section 11.4 Separability.
In case any provision in this Trust Agreement 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 11.5 Governing Law.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT
AND THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES).
69
Section 11.6 Payments Due on Non-Business Day.
If the date fixed for any payment on any Trust Security shall be a day that
is not a Business Day, then such payment need not be made on such date but may
be made on the next succeeding day that is a Business Day (except as otherwise
provided in Sections 4.1(a) and 4.2(d)), with the same force and effect as
though made on the date fixed for such payment, and no interest shall accrue
thereon for the period after such date.
Section 11.7 Successors.
This Trust Agreement shall be binding upon and shall inure to the benefit
of any successor to the Depositor, the Trust or the Relevant Trustee, including
any successor by operation of law. Except in connection with a consolidation,
merger or sale involving the Depositor that is permitted under Article Eight of
the Indenture and pursuant to which the assignee agrees in writing to perform
the Depositor's obligations hereunder, the Depositor shall not assign its
obligations hereunder.
Section 11.8 Headings.
The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.
Section 11.9 Reports, Notices and Demands.
Any report, notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
any Securityholder or the Depositor 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, (a) in the case of a Capital
Securityholder, to such Capital Securityholder as such Securityholder's name and
address may appear on the Securities Register; and (b) in the case of the Common
Securityholder or the Depositor, to Integon Corporation, 500 West Fifth Street,
Winston-Salem, North Carolina, Attention: General Counsel, telephone no.: (910)
770-2000. 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
Trust Agreement is required or permitted to be given or served to or upon the
Trust, the Property Trustee, the Delaware Trustee or the Administrative Trustees
shall be given in writing addressed (until another address is published by the
Trust) as follows: (a) with respect to the Property Trustee to First Union
National Bank of North Carolina, 230 South Tryon Street, 9th Floor, Charlotte,
North Carolina, Attention: Bond Administration; (b) with respect to the Delaware
Trustee, to First Union Bank of Delaware, One Rodney Square, lst Floor, 920 King
Street,
70
Wilmington, Delaware 19801, with a copy to the Property Trustee at the address
set forth in Clause (a); and (c) with respect to the Trust or the Administrative
Trustees, to them at the address above for notices to the Depositor, marked
"Attention Administrative Trustees of Integon Capital I." Such notice, demand or
other communication to or upon the Trust, the Administrative Trustees or the
Property Trustee shall be deemed to have been sufficiently given or made only
upon actual receipt of the writing by the Trust, the Administrative Trustees or
the Property Trustee.
Section 11.10 Agreement Not to Petition.
Each of the Trustees and the Depositor agree 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, they shall not file, or join in
the filing of, a petition against the Trust under any bankruptcy, insolvency,
reorganization 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 Depositor takes action in violation of this Section 11.10, the
Property Trustee agrees, for the benefit of Securityholders, that at the expense
of the Depositor, it shall file an answer with the bankruptcy court or otherwise
properly contest the filing of such petition by the Depositor against the Trust
or the commencement of such action and raise the defense that the Depositor 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 Property Trustee
or the Trust may assert. The provisions of this Section 11.10 shall survive the
termination of this Trust Agreement.
Section 11.11 Trust Indenture Act; Conflict with Trust Indenture Act.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required or deemed to be part of this Trust Agreement
pursuant to the terms herein and shall, to the extent applicable, be governed by
such provisions. The Trust Agreement shall be subject to and governed by the
Trust Indenture Act upon the consummation of the exchange offer pursuant to the
Exchange and Registration Rights Agreement. Until such exchange offer, the
Trust Indenture Act shall not apply to this Trust Agreement.
(b) The Property 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 or deemed to be included in this Trust
Agreement by any of the provisions of the Trust Indenture Act, such required or
deemed provision shall control. If any provision of this Trust Agreement
modifies or excludes any provision of the Trust Indenture Act which may be so
modified or excluded, the latter provision shall be deemed to apply to this
Trust Agreement as so modified or excluded, as the case may be.
71
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
Section 11.12 Acceptance of Terms of Trust Agreement, Guarantee and
Indenture.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY
OR ON BEHALF OF A SECURITY HOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE
OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITY HOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND
AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND
THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH SECURITY
HOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT
SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITY
HOLDER AND SUCH OTHERS.
Section 11.13 Counterparts.
This Trust Agreement may contain more than one counterpart of the signature
page and this Trust Agreement may be executed by the affixing of the signature
of each of the Trustees on one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
72
IN WITNESS WHEREOF, the undersigned have caused this Amended and Restated
Trust Agreement to be executed as of the day and year first above written.
INTEGON CORPORATION
By: /s/ John B. Yorke
-----------------------------------
Name: John B. Yorke
Title: Vice President, Corporate
General Counsel & Secretary
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
as Property Trustee
By: /s/ Shawn K. Bednasek
-----------------------------------
Name: Shawn K. Bednasek
Title: Asst. Vice President
73
FIRST UNION BANK OF DELAWARE,
as Delaware Trustee
By: /s/ Stephen J. Kaba
-----------------------------------
Name: Stephen J. Kaba
Title: Vice President
/s/ John B. Yorke
--------------------------------------
John B. Yorke,
as Administrative Trustee
/s/ Donald F. McKee
--------------------------------------
Donald F. McKee,
as Administrative Trustee
/s/ Steven C. Andrews
--------------------------------------
Steven C. Andrews,
as Administrative Trustee
74
STATE OF NORTH CAROLINA)
) : ss.:
COUNTY OF FORSYTH )
On the ___ day of February, 1997, before me personally came John B. Yorke,
to me known, who, being by me duly sworn, did depose and say that he/she is Vice
President, Corporate General Counsel & Secretary of Integon Corporation, one of
the corporations described in and which executed the foregoing instrument, and
that he/she signed his/her name thereto pursuant to authority of the Board of
Directors of said corporation.
--------------------------------------
Notary Public
STATE OF NORTH CAROLIA )
): ss.:
COUNTY OF MECKLENBURG )
On the 7th day of February, 1997, before me personally came Shawn K.
Bednasek, to me known, who, being by me duly sworn, did depose and say that
he/she is Assistant Vice President of First Union National Bank of North
Carolina, one of the corporations described in and which executed the foregoing
instrument, and that he/she signed his/her name thereto pursuant to the bylaws
of said corporation.
--------------------------------------
Notary Public
STATE OF DELAWARE )
: ss.:
COUNTY OF )
On the ___ day of February, 1997, before me personally came
________________________________________________________________________________
________________, to me known, who, being by me duly sworn, did depose and say
that he/she is
____________________________________________________________________________ of
First Union Bank of Delaware, one of the corporations described in and which
executed the foregoing instrument, and that he/she signed his/her name thereto
pursuant to the bylaws of said corporation.
--------------------------------------
Notary Public
75
STATE OF NORTH CAROLINA)
): ss.:
COUNTY OF FORSYTH )
On the ___ day of February, 1997, before me personally came
________________________________________________________________________________
__________________________, to me known, who, being by me duly sworn, did depose
and say that he/she executed the foregoing instrument.
--------------------------------------
Notary Public
STATE OF )
): ss.:
COUNTY OF )
On the ___ day of February, 1997, before me personally came
________________________________________________________________________________
_________________________, to me known, who, being by me duly sworn, did depose
and say that he/she executed the foregoing instrument.
--------------------------------------
Notary Public
EXHIBIT A
CERTIFICATE OF TRUST
OF
INTEGON CAPITAL I
This Certificate of Trust of Integon Capital I (the "Trust"), dated January
27, 1997, is being duly executed and filed by the undersigned, as trustees, to
form a business trust under the Delaware Business Trust Act (12 Del. C. (S) 3801
et seq.).
1. NAME. The name of the business trust being formed hereby is Integon
Capital I.
2. DELAWARE TRUSTEE. The name and business address of the trustee of the
Trust with a principal place of business in the State of Delaware is First Union
Bank of Delaware, One Rodney Square, lst Floor, 920 King Street, Wilmington,
Delaware 19801.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective upon the
filing of this Certificate of Trust.
IN WITNESS WHEREOF, the undersigned trustee of the Trust, has executed this
Certificate of Trust as of the date first above written.
FIRST UNION BANK OF DELAWARE,
as Trustee
By:________________________________
Name:
Title:
___________________________________
JOHN YORKE,
as Trustee
EXHIBIT B-1
[Form of Face of Initial Capital Security]
[This Capital Security is a Global Capital Security Certificate within
the meaning of the Trust Agreement hereinafter referred to and is registered in
the name of The Depository Trust Company (the "Depository") or a nominee of the
Depository. This Capital Security is exchangeable for Capital Securities
registered in the name of a person other than the Depository or its nominee only
in the limited circumstances described in the Trust Agreement and no transfer of
this Capital Security (other than a transfer of this Capital Security as a whole
by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository, which may be
treated by Integon and any agent thereof as the owner and holder of this Global
Security for all purposes) may be registered except in limited circumstances
described in the Trust Agreement.
Unless this Capital Security is presented by an authorized
representative of the Depository (55 Water Street, New York) to Integon Capital
I or its agent for registration of transfer, exchange or payment, and any
Capital Security issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of the Depositary and any
payment hereon is made to Cede & Co. (or to such other entity as shall be
requested by an authorized representative of the Depository), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]/1/
THIS CAPITAL SECURITY AND ANY JUNIOR SUBORDINATED DEBENTURES ISSUABLE
IN CONNECTION THEREWITH HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (A) BY THE INITIAL INVESTOR, (I) TO A PERSON WHO
THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT ACQUIRING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (II) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT,
(III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR (IV) PURSUANT TO AN EFFECTIVE
REGISTRATION
/1/ These paragraphs should only be added if the Capital Security is issued
in global form.
B-1-1
STATEMENT UNDER THE SECURITIES ACT, OR (B) BY SUBSEQUENT INVESTORS, AS SET FORTH
IN (A) ABOVE AND, IN ADDITION, TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN
EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF THE STATES AND
OTHER JURISDICTIONS OF THE UNITED STATES. THE HOLDER OF THIS SECURITY AGREES
THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.
THIS CAPITAL SECURITY WILL BE ISSUED, AND MAY BE HELD OR TRANSFERRED,
ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000. ANY
TRANSFER, SALE OR OTHER DISPOSITION OF THIS CAPITAL SECURITY IN A BLOCK HAVING A
LIQUIDATION AMOUNT OF LESS THAN $100,000, OR RESULTING IN A HOLDER'S HOLDING
CAPITAL SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000
SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER, ANY SUCH
TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH CAPITAL SECURITY FOR ANY
PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT OF DISTRIBUTIONS ON SUCH
CAPITAL SECURITY, AND SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST
WHATSOEVER IN SUCH CAPITAL SECURITY.
CERTIFICATE NUMBER
NUMBER OF CAPITAL SECURITIES
CUSIP NO.
CERTIFICATE EVIDENCING CAPITAL SECURITIES
OF
INTEGON CAPITAL I
10 3/4% CAPITAL SECURITIES,
SERIES A
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
Integon Capital I, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that (the
"Holder") is the registered owner of capital securities of the
Trust representing a preferred undivided beneficial interest in the assets of
the Trust and designated the Integon Capital I 10 3/4% Capital Securities,
Series A (liquidation amount $1,000 per Capital Security) (the "Capital
Securities"). The Capital
B-1-2
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 5.11 of the Trust
Agreement (as defined below). The designations, rights, privileges,
restrictions, preferences and other terms and provisions of the Capital
Securities are set forth in, and this certificate and the Capital Securities
represented hereby are issued and shall in all respects be subject to the terms
and provisions of, the Amended and Restated Trust Agreement of the Trust, dated
as of February 10, 1997, as the same may be amended from time to time (the
"Trust Agreement") including the designation of the terms of Capital Securities
as set forth therein. Upon receipt of this certificate, the Holder is bound by
the Trust Agreement and is entitled to the benefits thereunder and by acceptance
hereof agrees to the provisions of (i) the Guarantee Agreement entered into by
Integon Corporation, a Delaware corporation ("Integon"), and First Union
National Bank of North Carolina, a national banking association organized and
existing under the laws of the United States of America ("First Union"), as
guarantee trustee, dated as of February 10, 1997, and (ii) the Indenture entered
into by Integon and First Union, as trustee, dated as of February 10, 1997.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust
has executed this certificate this _____ day of ________, ____.
INTEGON CAPITAL I
By:
----------------------------------
Name:
Administrative Trustee
B-1-3
This certificate evidences the Capital Securities of the Trust referred to
in the within-mentioned Trust Agreement.
Dated:
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA, as Property Trustee
By:
----------------------------------
Name:
Title:
B-1-4
ASSIGNMENT FORM
To assign this Capital Security, fill in the form below:
I or we assign and transfer this Capital Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint
agent to transfer this Capital Security on the books of the Trust. The agent
may substitute another to act for him.
Date: Your Signature:
Signature Guarantee:
(Signature must be guaranteed by a participant in a recognized
signature guarantee medallion program)
Sign exactly as your name appears on the other side of this Capital Security.
B-1-5
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF
INITIAL CAPITAL SECURITIES
This certificate relates to Capital Securities in $________ Liquidation Amount
held in (check applicable space) ____ global or ____ definitive form by the
undersigned.
The undersigned (check one box below):
/ / has requested the Administrative Trustees by written order to deliver
in exchange for its beneficial interest in the Global Capital Security held
by the Depository a Capital Security or Capital Securities in definitive,
registered form of authorized denominations and an aggregate Liquidation
Amount equal to its beneficial interest in such Global Capital Security (or
the portion thereof indicated above);
/ / has requested the Administrative Trustees by written order to exchange
or register the transfer of a Capital Security or Capital Securities.
In connection with any transfer or exchange of any of the Capital Securities
evidenced by this certificate occurring prior to the date that is three years
after the later of the date of original issuance of such Capital Securities and
the last date, if any, on which such Capital Securities were owned by the Trust
or any Affiliate of the Trust, the undersigned confirms that such Capital
Securities are being:
CHECK ONE BOX BELOW:
(1) / / acquired for the undersigned's own account, without transfer;
or
(2) / / transferred to the Trust; or
(3) / / transferred pursuant to and in compliance with Rule 144A under
the Securities Act of 1933, as amended; or
(4) / / transferred to an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act of 1933, as amended), that has furnished to the
Administrative Trustees a signed letter containing certain
representations and agreements (the form of which letter can be
obtained from the Administrative Trustees); or
(5) / / transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933, as
amended.
Unless one of the boxes is checked, the Administrative Trustees shall refuse to
register any of the Capital Securities evidenced by this certificate in the name
of any person other than the registered holder thereof; provided, however, that
if box (3), (4) or (5) is checked, the
B-1-6
Administrative Trustees or the Trust may require, prior to registering any such
transfer of the Capital Securities, in its sole discretion, such legal opinions,
certifications and other information as an Administrative Trustee or Trust has
reasonably requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, as amended, such as the exemption
provided by Rule 144 under such Act.
-------------------------------------
Signature
Signature Guarantee:
- ----------------------- -------------------------------------
Signature
(Signature must be guaranteed
by a participant in a signature
guarantee medallion program)
- --------------------------------------------------------------------------------
B-1-7
EXHIBIT B-2
[Form of Face of Exchange Capital Security]
[This Capital Security is a Global Capital Security Certificate within
the meaning of the Trust Agreement hereinafter referred to and is registered in
the name of The Depository Trust Company (the "Depository") or a nominee of the
Depository. This Capital Security is exchangeable for Capital Securities
registered in the name of a person other than the Depository or its nominee only
in the limited circumstances described in the Trust Agreement and no transfer of
this Capital Security (other than a transfer of this Capital Security as a whole
by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository, which may be
treated by the Trust and any agent as the owner and holder of this Global
Capital Security for all purposes) may be registered except in limited
circumstances described in the Trust Agreement.
Unless this Capital Security is presented by an authorized
representative of the Depository (55 Water Street, New York) to Integon Capital
I or its agent for registration of transfer, exchange or payment, and any
Capital Security issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of the Depository and any
payment hereon is made to Cede & Co. (or to such other entity as may be
requested by an authorized representative of the Depository), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]/2/
CERTIFICATE NUMBER
NUMBER OF CAPITAL SECURITIES
CUSIP NO.
CERTIFICATE EVIDENCING CAPITAL SECURITIES
OF
INTEGON CAPITAL I
10 3/4% CAPITAL SECURITIES,
SERIES A
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
- ----------------------
/2/ These paragraphs should only be added if the Capital Security is issued
in global form.
B-2-1
Integon Capital I, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that (the
"Holder") is the registered owner of ( ) capital securities of the
Trust representing a preferred undivided beneficial interest in the assets of
the Trust and designated the Integon Capital I 10 3/4% Capital Securities,
Series A (liquidation amount $1,000 per Capital Security) (the "Capital
Securities"). The Capital Securities are transferable on the books and records
of the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer as provided in Section
5.11 of the Trust Agreement (as defined below). The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Capital Securities are set forth in, and this certificate and the Capital
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Trust Agreement of the
Trust, dated as of February 10, 1997, as the same may be amended from time to
time (the "Trust Agreement") including the designation of the terms of Capital
Securities as set forth therein. Upon receipt of this certificate, the Holder is
bound by the Trust Agreement and is entitled to the benefits thereunder and by
acceptance hereof agrees to the provisions of (i) the Guarantee Agreement
entered into by Integon Corporation, a Delaware corporation ("Integon"), and
First Union National Bank of North Carolina, a national banking association
organized and existing under the laws of the United States of America ("First
Union"), as guarantee trustee, dated as of February 10, 1997, and (ii) the
Indenture entered into by Integon and First Union, as trustee, dated as of
February 10, 1997.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust
has executed this certificate this _____ day of ________, ____.
INTEGON CAPITAL I
By:
-------------------------------
Name:
Administrative Trustee
B-2-2
This certificate evidences the Capital Securities of the Trust referred to in
the within-mentioned Trust Agreement.
Dated:
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA, as Property Trustee
By:
------------------------------------
Name:
Title:
B-2-3
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital
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 Capital Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
Signature:
(Sign exactly as your name appears on the other side of this Capital Security
Certificate)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
B-2-4
EXHIBIT C
[FORM OF CERTIFICATE OF DEPOSITORY AGREEMENT]
___________, 199_
The Depository Trust Company,
55 Water Street, 49th Floor,
New York, New York 10041-0099.
Attention: General Counsel's Office
Re: Integon Capital I
___% Capital Securities, Series A
CUSIP
----------------------------------------
Ladies and Gentlemen:
The purpose of this letter is to set forth certain matters relating to the
issuance and deposit with The Depository Trust Company ("DTC") of the global-
only portion of the ___% Capital Securities, Series A (the "Capital
Securities"), of Integon Capital I, a statutory business trust formed under the
laws of the State of Delaware (the "Issuer"), governed by the Amended and
Restated Trust Agreement, dated as of __________, 1997, between Integon
Corporation ("the Corporation"), as Depositor, First Union National Bank of
North Carolina, as Property Trustee, and First Union Bank of Delaware, as
Delaware Trustee. The payment of distributions on the Capital Securities and
payments due upon liquidation of the Issuer or redemption of the Capital
Securities, to the extent the Issuer has funds available for the payment
thereof, are guaranteed by the Corporation to the extent set forth in a
Guarantee Agreement, dated as of ___________, 1997, between the Corporation and
First Union National Bank of North Carolina, as Guarantee Trustee with respect
to the Capital Securities. The Corporation and the Issuer propose to sell the
Capital Securities to certain initial purchasers (the "Initial Purchasers")
named in and pursuant to a Purchase Agreement, dated as of ___________, 1997, by
and among the Initial Purchasers, the Issuer and the Corporation, and certain of
the Initial Purchasers wish to take delivery of the Capital Securities through
DTC. First Union National Bank of North Carolina is acting as transfer agent
and registrar with respect to the Capital Securities (the "Transfer Agent and
Registrar").
C-1
To induce DTC to accept the Capital Securities as eligible for deposit at
DTC, and to act in accordance with DTC's rules with respect to the Capital
Securities, the Issuer and the Transfer Agent and Registrar make the following
representations to DTC:
1. Prior to the closing of the sale of the Capital Securities to the
Initial Purchasers on ____________, 1997, there shall be deposited with, or held
by the Transfer Agent and Registrar as custodian for, DTC one or more global
certificates (individually and collectively, the "Global Certificate")
registered in the name of DTC's nominee, Cede & Co., representing an aggregate
of [_________] Capital Securities and bearing the following legend:
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to Issuer 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 is 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
hereof, Cede & Co., has an interest herein.
2. The Amended and Restated Trust Agreement of the Issuer provides for
the voting by holders (with no provision for revocation of consents or votes by
subsequent holders) of the Capital Securities under certain limited
circumstances. The Issuer shall establish a record date for such purposes and
shall, to the extent possible, give DTC notice of such record date not less than
15 calendar days in advance of such record date.
3. In the event of a stock split, conversion, recapitalization,
reorganization or any other similar transaction resulting in the cancellation of
all or any part of the Capital Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DTC a notice of such event as soon as
possible, but at least 5 business days prior to the effective date of such
event.
4. In the event of any distribution on, or an offering or issuance of
rights with respect to, the Capital Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DTC a notice specifying: (a) the amount
of and conditions, if any, applicable to the payment of any such distribution or
any such offering or issuance of rights; (b) any applicable expiration or
deadline date, or any date by which any action on the part of the holders of
Capital Securities is required; and (c) the date any required notice is to be
mailed by or on behalf of the Issuer to holders of Capital Securities or
published by or on behalf of the Issuer (whether by mail or publication, the
"Publication Date"). Such notice shall be sent to DTC by a secure means (e.g.,
- -
legible telecopy, registered or certified mail, overnight delivery) in a timely
manner designed to assure that such notice is in DTC's possession no later than
the close of business on the business day before the Publication Date. The
Issuer or the Transfer Agent and Registrar will forward such notice either in a
separate secure transmission for each CUSIP number or in a secure transmission
of multiple CUSIP numbers (if applicable) that includes a manifest or list of
each CUSIP number submitted in that transmission. (The party sending such
notice shall have a method to verify subsequently the use of such means and the
timeliness of such notice.) The
C-2
Publication Date shall be not less than 30 calendar days nor more than 60
calendar days prior to the payment of any such distribution or any such offering
or issuance of rights with respect to the Capital Securities. After establishing
the amount of payment to be made on the Capital Securities, the Issuer or the
Transfer Agent and Registrar will notify DTC's Dividend Department of such
payment 5 business days prior to payment date. Notices to DTC's Dividend
Department by telecopy shall be sent to (212) 709-1723. Such notices by mail or
by any other means shall be sent to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
The Issuer or the Transfer Agent and Registrar shall confirm DTC's receipt
of such telecopy by telephoning the Dividend Department at (212) 709-1270.
5. In the event of a redemption by the Issuer of the Capital Securities,
notice specifying the terms of the redemption and the Publication Date of such
notice shall be sent by the Issuer or the Transfer Agent and Registrar to DTC
not less than 30 calendar days prior to such event by a secure means in the
manner set forth in paragraph 4. Such redemption notice shall be sent to DTC's
Call Notification Department at (516) 227-4164 or (516) 227-4190, and receipt of
such notice shall be confirmed by telephoning (516) 227-4070. Notice by mail or
by any other means shall be sent to:
Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530-4719
6. In the event of any invitation to tender the Capital Securities,
notice specifying the terms of the tender and the Publication Date of such
notice shall be sent by the Issuer or the Transfer Agent and Registrar to DTC by
a secure means and in a timely manner as described in paragraph 4. Notices to
DTC pursuant to this paragraph and notices of other corporate actions (including
mandatory tenders, exchanges and capital changes), shall be sent, unless
notification to another department is expressly provided for herein, by telecopy
to DTC's Reorganization Department at (212) 709-1093 or (212) 709-1094 and
receipt of such notice shall be confirmed by telephoning (212) 709-6884, or by
mail or any other means to:
C-3
Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
7. All notices and payment advices sent to DTC shall contain the CUSIP
number or numbers of the Capital Securities and the accompanying designation of
the Capital Securities, which, as of the date of this letter, is "Integon
Capital I, ___% Capital Securities, Series A".
8. Distribution payments or other cash payments with respect to the
Capital Securities shall be governed by DTC's current Principal and Income
Payments Rider, a copy of which is attached hereto as Annex I. For purposes of
this letter, the term "Agent" used in Annex I shall be deemed to refer to First
Union National Bank of North Carolina or any successor Property Trustee under
the Amended and Restated Trust Agreement.
9. DTC may direct the Issuer and the Transfer Agent and Registrar to use
any other telecopy number or address of DTC as the number or address to which
notices or payments may be sent.
10. In the event of a conversion, redemption, or any other similar
transaction (e.g., tender made and accepted in response to the Issuer's or the
- -
Transfer Agent and Registrar's invitation) necessitating a reduction in the
aggregate number of Capital Securities outstanding evidenced by the Global
Certificate, DTC, in its discretion: (a) may request the Issuer or the Transfer
Agent and Registrar to issue and countersign a new Global Certificate; or (b)
may make an appropriate notation on the Global Certificate indicating the date
and amount of such reduction.
11. DTC may discontinue its services as a securities depositary with
respect to the Capital Securities at any time by giving reasonable prior written
notice to the Issuer and the Transfer Agent and Registrar (at which time DTC
will confirm with the Issuer or the Transfer Agent and Registrar the aggregate
number of Capital Securities deposited with it) and discharging its
responsibilities with respect thereto under applicable law. Under such
circumstances, the Issuer may determine to make alternative arrangements for
global settlement for the Capital Securities, make available one or more
separate global certificates evidencing Capital Securities to any Participant
having Capital Securities credited to its DTC account, or issue definitive
Capital Securities to the beneficial holders thereof, and in any such case, DTC
agrees to cooperate fully with the Issuer and the Transfer Agent and Registrar
and to return the Global Certificate, duly endorsed for transfer as directed by
the Issuer or the Transfer Agent and Registrar, together with any other
documents of transfer reasonably requested by the Issuer or the Transfer Agent
and Registrar.
12. In the event that the Issuer determines that beneficial owners of
Capital Securities shall be able to obtain definitive Capital Securities, the
Issuer or the Transfer Agent and Registrar shall notify DTC of the availability
of certificates. In such event, the Issuer or the
C-4
Transfer Agent and Registrar shall issue, transfer and exchange certificates in
appropriate amounts, as required by DTC and others, and DTC agrees to cooperate
fully with the Issuer and the Transfer Agent and Registrar and to return the
Global Certificate, duly endorsed for transfer as directed by the Issuer or the
Transfer Agent and Registrar, together with any other documents of transfer
reasonably requested by the Issuer or the Transfer Agent and Registrar.
13. This letter may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
C-5
Nothing herein shall be deemed to require the Transfer Agent and Registrar to
advance funds on behalf of Integon Capital I.
Very truly yours,
Integon Capital I
(As Issuer)
By:________________________________
Name:
Administrator
First Union National Bank of North Carolina
(As Transfer Agent and Registrar)
By:________________________________
Name:
Title:
RECEIVED AND ACCEPTED:
THE DEPOSITORY TRUST COMPANY
By:_______________________________
Authorized Officer
C-6
EXHIBIT D
[Form of Face of Common Security]
THIS CERTIFICATE IS NOT TRANSFERABLE TO A PERSON WHO IS NOT A
WHOLLY OWNED SUBSIDIARY OF HOLDER
CERTIFICATE NUMBER: NUMBER OF COMMON SECURITIES:
CERTIFICATE EVIDENCING COMMON SECURITIES
OF
INTEGON CAPITAL I
10 3/4% COMMON SECURITIES
(LIQUIDATION AMOUNT $1,000 PER COMMON SECURITY)
Integon Capital I, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that _____________________
(the "Holder") is the registered owner of ______ common securities of the Trust
representing a common undivided beneficial interest in the assets of the Trust
having a liquidation amount of $1,000 per common security and designated the 10
3/4% Common Securities (the "Common Securities"). The designations, rights,
privileges, restrictions, preferences, obligations 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 Trust Agreement
of the Trust dated as of February 10, 1997, as the same may be amended from time
to time (the "Trust Agreement"). Except as set forth under Section 5.10 of the
Trust Agreement the Common Securities are not transferable and any attempted
transfer hereof shall be void. The Trust will furnish a copy of the Trust
Agreement 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 Trust Agreement
and is entitled to the benefits thereunder and by acceptance hereof agrees to
the provisions of (i) the Guarantee Agreement entered into by Integon
Corporation, a Delaware corporation ("Integon"), and First Union National Bank
of North Carolina, a national banking association organized and existing
D-1
under the laws of the United States of America ("First Union"), as guarantee
trustee, dated as of February 10, 1997, and (ii) the Indenture entered into by
Integon and First Union, as trustee, dated as of February 10, 1997.
In Witness Whereof, one of the Administrative Trustees of the Trust has
executed this certificate.
INTEGON CAPITAL I
By: ______________________________
Name:
Administrative Trustee
D-2
EXHIBIT E
[FORM OF TRANSFEREE LETTER OF REPRESENTATION]
Integon Capital I
c/o Integon Corporation
Dear Sirs:
This certificate is delivered to request a transfer of $ _________
of the [_____]% Capital Securities, Series A (Liquidation Amount $1,000 per
Capital Security) (the "Capital Securities") Integon Capital I (the "Trust").
Upon transfer, the Capital Securities would be registered in the name of
the new beneficial owner as follows:
Name: _________________________
Address: _______________________
Taxpayer ID Number:_____________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")) purchasing for our own account or for the account of such an
institutional "accredited investor," and we are acquiring the Capital Securities
not with a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act. We have such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risk of our investment in the Capital Securities and invest in or purchase
securities similar to the Capital Securities in the normal course of our
business. We and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.
2. We understand that the Capital Securities have not been registered
under the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf
of any investor account for which we are purchasing Capital Securities to offer,
sell or otherwise transfer such Capital Securities prior to the date which is
three years after the later of the date of original issue and the last date on
which the Trust or any affiliate of the Trust was the owner of such Capital
Securities (or any predecessor thereto) (the "Resale Restriction Termination
Date") only (a) to the Trust, (b) pursuant to a registration statement which has
been declared effective under the Securities
E-1
Act, (c) in a transaction comply with the requirements of Rule 144A under the
Securities Act, to a person we reasonably believe is a qualified institutional
buyer under Rule 144A (a "QIB") that purchases for its own account or for the
account of a QIB and to whom notice is given that the transfer is being made in
reliance on Rule 144A, (d) to an institutional "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is
purchasing for its own account or for the account of such an institutional
"accredited investor", in each case in a minimum Liquidation Amount of Capital
Securities of 100,000 or (e) pursuant to any other available exemption from the
registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of our property
or the property of such investor account or accounts be at all times within our
or their control and in compliance with any applicable state securities laws.
The foregoing restrictions on resale will not apply subsequent to the Resale
Restriction Termination Date. If any resale or other transfer of the Capital
Securities is proposed to be made pursuant to clause (d) above prior to the
Resale Restriction Termination Date, the transferor shall deliver a letter from
the transferee substantially in the form of this letter to the Property and the
Property Trustee, which shall provide, among other things, that the transferee
is an institutional "accredited investor" within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act and that it is acquiring such Notes for
investment purposes and not for distribution in violation of the Securities Act.
Each purchaser acknowledges that the Trust and the Property Trustee reserve the
right prior to any offer, sale or other transfer prior to the Resale Termination
Date of the Capital Securities pursuant to clauses (d), (e) or (f) above to
require the delivery of an opinion of counsel, certifications and/or other
information satisfactory to the Trust and the Administrative Trustees.
TRANSFEREE:__________________________
BY____________________________________
E-2