EXECUTION COPY
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
BTI CAPITAL TRUST
Dated as of November 25, 1997
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TABLE OF CONTENTS
PAGE
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ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1. Definitions................................................... 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.............................. 9
SECTION 2.2. Lists of Holders of Securities................................ 9
SECTION 2.3. Reports by the Institutional Trustee.......................... 10
SECTION 2.4. Periodic Reports to Institutional Trustee..................... 10
SECTION 2.5. Evidence of Compliance with Conditions Precedent.............. 10
SECTION 2.6. Events of Default; Waiver..................................... 10
SECTION 2.7. Event of Default; Notice...................................... 12
ARTICLE III
ORGANIZATION OF TRUST
SECTION 3.1. Name.......................................................... 13
SECTION 3.2. Office........................................................ 13
SECTION 3.3. Purpose....................................................... 13
SECTION 3.4. Prohibition of Actions by the Trust and the Trustees.......... 13
SECTION 3.5. General Authority of the Trustees............................. 14
SECTION 3.6. Title to Property of the Trust................................ 14
SECTION 3.7. Not Responsible for Recitals or Issuance of Securities........ 15
SECTION 3.8. Duration of the Trust......................................... 15
SECTION 3.9. Mergers....................................................... 15
SECTION 3.10. Termination and Dissolution of the Trust..................... 17
ARTICLE IV
SPONSOR
SECTION 4.1. Sponsor's Purchase of Common Securities....................... 18
SECTION 4.2. Responsibilities of the Sponsor............................... 18
ARTICLE V
TRUSTEES
SECTION 5.1. Number of Trustees............................................ 19
SECTION 5.2. Delaware Trustee; Eligibility................................. 19
SECTION 5.3. Institutional Trustee; Eligibility............................ 19
SECTION 5.4. Qualifications of Regular Trustees and Delaware Trustee
Generally................................................... 20
SECTION 5.5. Initial Trustees.............................................. 21
SECTION 5.6. Appointment, Removal and Resignation of Trustees.............. 21
SECTION 5.7. Vacancies among Trustees...................................... 23
SECTION 5.8. Merger, Conversion, Consolidation or Succession to
Business of a Trustee ...................................... 23
SECTION 5.9. Authority, Powers and Duties of the Regular Trustees.......... 23
SECTION 5.10. Delegation of Powers and Duties of the Regular Trustees...... 27
SECTION 5.11. Powers and Duties of the Institutional Trustee............... 27
SECTION 5.12. Certain Duties and Responsibilities of the Institutional
Trustee.................................................... 29
SECTION 5.13. Certain Rights of Institutional Trustee...................... 30
SECTION 5.14. Delaware Trustee............................................. 32
SECTION 5.15. Meetings..................................................... 33
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1. Distributions................................................ 33
ARTICLE VII
THE SECURITIES
SECTION 7.1. Title and Terms.............................................. 34
SECTION 7.2. General Provisions Regarding the Securities.................. 34
SECTION 7.3. General Form of Certificates................................. 34
SECTION 7.4. Execution and Authentication of Certificates................. 35
SECTION 7.5. Paying Agent and Conversion Agent............................ 35
SECTION 7.6. Outstanding Preferred Securities............................. 36
SECTION 7.7. Preferred Securities in Treasury............................. 36
ARTICLE VIII
TRANSFERS, EXCHANGES AND CANCELLATIONS OF SECURITIES
SECTION 8.1. Transfer of Securities....................................... 37
SECTION 8.2. Transfer of Certificates..................................... 39
SECTION 8.3. Deemed Security Holders...................................... 39
SECTION 8.4. Book Entry Interests......................................... 39
SECTION 8.5. Notices to Clearing Agency................................... 42
SECTION 8.6. Appointment of Successor Clearing Agency..................... 42
SECTION 8.7. Definitive Trust Preferred Security Certificates............. 42
SECTION 8.8. Mutilated Destroyed, Lost or Stolen Certificates............. 43
ARTICLE IX
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES AND OTHERS
SECTION 9.1. Liability.................................................... 43
SECTION 9.2. Exculpation.................................................. 44
SECTION 9.3. Fiduciary Duty............................................... 44
SECTION 9.4. Indemnification.............................................. 45
SECTION 9.5. Outside Businesses........................................... 48
ARTICLE X
ACCOUNTING
SECTION 10.1. Fiscal Year................................................. 49
SECTION 10.2. Certain Accounting Matters.................................. 49
SECTION 10.3. Banking..................................................... 49
SECTION 10.4. Withholding................................................. 50
ARTICLE XI
AMENDMENTS AND MEETINGS
SECTION 11.1. Amendments.................................................. 50
- ii -
SECTION 11.2. Meetings of The Holders of Securities; Action by
Written Consent............................................ 52
ARTICLE XII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 12.1. Representations and Warranties of Institutional Trustee...... 53
SECTION 12.2. Representations and Warranties of Delaware Trustee........... 54
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. Notices...................................................... 55
SECTION 13.2. Governing Law................................................ 56
SECTION 13.3. Intention of the Parties..................................... 57
SECTION 13.4. Headings..................................................... 57
SECTION 13.5. Successors and Assigns....................................... 57
SECTION 13.6. Partial Enforceability....................................... 57
SECTION 13.7. Counterparts................................................. 57
- iii -
ANNEX AND EXHIBITS
ANNEX I Terms of Preferred Securities and Common Securities
EXHIBIT A-1 Form of Preferred Security Certificate
EXHIBIT A-2 Form of Common Security Certificate
EXHIBIT B Specimen Convertible Debenture
- iv -
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
- ------------------- -----------
310(a)....................................................... 5.3(a)
310(c)....................................................... Inapplicable
311(c)....................................................... Inapplicable
312(a)....................................................... 2.2(a)
312(b)....................................................... 2.2(b)
313.......................................................... 2.3
314(a)....................................................... 2.4
314(b)....................................................... Inapplicable
314(c)....................................................... 2.5
314(d)....................................................... Inapplicable
314(f)....................................................... Inapplicable
315(a)....................................................... 5.12(b)-(e)
315(c)....................................................... 5.12(a)
315(d)....................................................... 5.12(a)
316(a)....................................................... Annex I
316(c)....................................................... 5.9(d)(v)
- ----------------
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
- v -
AMENDED AND RESTATED DECLARATION OF TRUST
OF
BTI CAPITAL TRUST
November 25, 1997
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of November 25, 1997, by the undersigned trustees (together with
all other Persons from time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the "Trustees"), Breed
Technologies, Inc., a Delaware corporation, as trust sponsor (the "Sponsor"),
and by the holders, from time to time, of undivided beneficial interests in the
assets of the Trust issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor created BTI Capital Trust (the
"Trust"), a business trust under the Business Trust Act (as defined herein)
pursuant to a Trust Agreement dated as of October 17, 1997 (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on October 17, 1997, for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in certain Debentures (as
defined herein) of the Debenture Issuer (as defined herein); and
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration;
NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a business trust under the Business Trust Act and that this
Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1. Definitions
-----------
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.1;
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(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections and Annexes and Exhibits
to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa;
and
(g) a reference to the masculine includes the feminine and vice versa.
"Additional Interest" means if the Trust is required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States or any other taxing authority,
such amounts as shall be required so that the net amounts received and retained
by the Trust after paying such taxes, duties, assessments and governmental
charges will not be less than the amounts the Trust would have received had no
such taxes, duties, assessments or governmental charges been imposed.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent or Conversion Agent.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person.
"Book Entry Interest" means a beneficial interest in a Global Certificate,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 8.4.
"Business Day" means any day other than a day on which banking institutions
in the City of New York or Wilmington, Delaware are authorized or required by
law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. C. Section 3801 et seq., as it may be amended from time to time, or any
successor legislation.
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"Certificate" means a certificate representing a Common Security or a
Preferred Security.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depositary for the
Preferred Securities and in whose name or in the name of a nominee of that
organization shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the Preferred Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Clearing Agency
effects book entry transfers and pledges of Securities deposited with the
Clearing Agency."
"Closing Date" means November 25, 1997.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" has the meaning specified in Section 7.1.
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"Common Securities Guarantee" means the guarantee agreement dated as of
November 25, 1997, of the Sponsor in respect of the Common Securities.
"Common Stock" means the common stock, par value $.01 per share, of the
Sponsor.
"Company Indemnified Person" means (i) any Regular Trustee; (ii) any
Affiliate of any Regular Trustee; (iii) any officer, director, shareholder,
member, partner, employee, representative or agent of any Regular Trustee; or
(iii) any officer, employee or agent of the Trust or its Affiliates.
"Compounded Interest" means interest compounded quarterly at the rate
specified for the Debentures to the extent permitted by applicable law upon
interest accrued and unpaid (including Additional Interest) at the end of each
Extension Period.
"Conversion Agent" has the meaning set forth in Section 7.5.
"Corporate Trust Office" means the principal corporate trust office of the
Institutional Trustee, which on the date of this Declaration is 1100 North
Market Street, Rodney Square North, Wilmington, Delaware 19890.
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"Covered Person" means (a) any officer, director, shareholder, partner,
member, representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means the Sponsor in its capacity as issuer of the
Debentures.
"Debenture Trustee" means Wilmington Trust Company, as trustee under the
Indenture until a successor is appointed thereunder, and thereafter means such
successor trustee.
"Debentures" means the Debentures to be issued by the Debenture Issuer
under the Indenture and to be held by the Institutional Trustee, a specimen
certificate for such Debentures being Exhibit B hereto.
"Definitive Preferred Security Certificates" has the meaning set forth in
Section 8.4.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.1.
"Depositary" means The Depository Trust Company, the initial Clearing
Agency, until a successor shall be appointed pursuant to Section 8.6, and
thereafter means such successor Depositary.
"Event of Default" in respect of the Securities means an Event of Default
(as defined in the Indenture) has occurred and is continuing in respect of the
Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and the rules and regulations promulgated thereunder, or any
successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section 9.4(b).
"Global Certificate" has the meaning set forth in Section 8.4(a).
"Holder" means a Person in whose name a Certificate representing a Security
is registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"Indenture" means the Indenture dated as of November 25, 1997, between the
Debenture Issuer and the Debenture Trustee, as it may be amended from time to
time.
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"Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3, in its capacity as a trustee of the
Trust.
"Institutional Trustee Account" has the meaning set forth in Section
5.11(c).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, and the rules and regulations promulgated thereunder,
or any successor legislation.
"Legal Action" has the meaning set forth in Section 5.9(a)(viii).
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holders of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of more than 50% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all outstanding Securities of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of the
Securities, as set forth in Annex I hereto.
"Offering Memorandum" has the meaning set forth in Section 5.9.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by two Authorized Officers of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Declaration shall include:
(i) a statement that each officer signing the Certificate has read
the covenant or condition and the definitions relating thereto;
(ii) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
(iii) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
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(iv) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"144A Global Security" has the meaning specified in Section 8.4(b).
"Paying Agent" has the meaning specified in Section 7.5.
"Permanent Regulation S Global Security" has the meaning set forth in
Section 8.4(b).
"Person" means any legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated organization or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"PORTAL Market" means the Private Offerings, Resales and Trading through
Automated Linkages Market operated by the National Association of Securities
Dealers, Inc. (or any successor thereto).
"Preferred Securities" has the meaning specified in Section 7.1
"Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Exhibit A-1.
"Preferred Securities Guarantee" means the guarantee agreement, dated as of
November 25, 1997, of the Sponsor in respect of the Preferred Securities.
"Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Depositary, or on the books of a Person
maintaining an account with such Depositary (directly as a participant or as an
indirect participant, in each case in accordance with the rules of such
Depositary).
"Purchase Agreement" means the Purchase Agreement, dated as of November 19,
1997, between the Sponsor and the purchasers named therein, relating to the
Preferred Securities.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Quorum" means a majority of the Regular Trustees or, if there are only two
Regular Trustees, both of them.
"Registration Rights Agreement" means the registration rights agreement,
dated as of November 25, 1997, among the Sponsor, the Trust and the Initial
Purchasers named in Schedule I of the Purchase Agreement.
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"Regular Trustee" means any Trustee other than the Institutional Trustee
and the Delaware Trustee.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Security" has the meaning specified in Section 8.4(b).
"Regulation S Securities Exchange Date" has the meaning set forth in
Section 8.4(b).
"Related Party" means, with respect to the Sponsor, any direct or indirect
wholly owned subsidiary of the Sponsor or any other Person that owns, directly
or indirectly, 100% of the outstanding voting securities of the Sponsor.
"Responsible Officer" means, with respect to the Institutional Trustee, any
vice-president, any assistant vice-president, the treasurer, any assistant
treasurer, any trust officer or assistant trust officer or any other officer in
the Corporate Trust Office of the Institutional Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Restricted Security" has the meaning specified in Section 8.1(d).
"Rule 144" means Rule 144 as promulgated under the Securities Act.
"Rule 144A" means Rule 144A as promulgated under the Securities Act.
"Rule 144(k)" means Rule 144(k) as promulgated under the Securities Act.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, and the rules and regulations promulgated thereunder, or any successor
legislation.
"Securities Guarantees" means the Common Securities Guarantee and the
Preferred Securities Guarantee.
"Shelf Registration Statement" means the registration statement to be filed
by the Company pursuant to the Registration Rights Agreement.
"Special Event" has the meaning set forth in Annex I hereto.
7
"Sponsor" means Breed Technologies, Inc., a Delaware corporation, or any
successor entity in a merger, consolidation or amalgamation, in its capacity as
sponsor of the Trust.
"Successor Entity" has the meaning set forth in Section 3.9(b)(i).
"Successor Securities" has the meaning specified in Section 3.9(b)(i)(B).
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I hereto.
"10% in liquidation amount of the Securities" means, except as provided in
the terms of the Preferred Securities or by the Trust Indenture Act, Holders of
outstanding Securities voting together as a single class or, as the context may
require, Holders of outstanding Preferred Securities or Holders of outstanding
Common Securities, voting separately as a class, who are the record owners of
10% or more of the aggregate liquidation amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus accrued and
unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"Temporary Regulation S Global Security" has the meaning set forth in
Section 8.4(b).
"Transfer Restriction Termination Date" means the first date on which the
Securities and any Common Stock issued or issuable upon the conversion or
exchange thereof (other than (i) Securities acquired by the Trust or any
Affiliate thereof and (ii) Common Stock issued upon the conversion or exchange
of any Security described in clause (i) above) may be sold pursuant to Rule
144(k).
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person shall continue in office in accordance with
the terms hereof, and all other Persons who may from time to time be duly
appointed, qualified and serving as Trustees in accordance with the provisions
hereof, and references herein to a Trustee or the Trustees shall refer to such
Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, and the rules and regulations promulgated thereunder, or any
successor legislation.
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ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application
--------------------------------
(a) Prior to the effectiveness of the Shelf Registration Statement, this
Indenture shall incorporate and be governed by the provisions of the Trust
Indenture Act. After the effectiveness of the Shelf Registration Statement,
this Declaration shall be subject to the provisions of the Trust Indenture Act
that are required to be part of this Declaration, which are incorporated by
reference in and made part of this Declaration and shall, to the extent
applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee that is a Trustee
for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2. Lists of Holders of Securities
------------------------------
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Institutional Trustee (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Institutional
Trustee may reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, provided that neither the
Sponsor nor the Regular Trustees on behalf of the Trust shall be obligated to
provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Institutional Trustee by the
Sponsor and the Regular Trustees on behalf of the Trust, and (ii) at any other
time, within 30 days of receipt by the Trust of a written request for a List of
Holders as of a date no more than 14 days before such List of Holders is given
to the Institutional Trustee. The Institutional Trustee shall preserve, in as
current a form as is reasonably practicable, all information contained in any
List of Holders given to it or which it receives in the capacity as Paying Agent
(if acting in such capacity), provided that the Institutional Trustee may
destroy any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Institutional Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
9
SECTION 2.3. Reports by the Institutional Trustee
------------------------------------
Within 60 days after November 15 of each year, commencing November 15,
1998, the Institutional Trustee shall provide to Holders of Preferred Securities
such reports concerning the Institutional Trustee as are required by Section
313(a) of the Trust Indenture Act, if any, in the form and manner provided by
Section 313 of the Trust Indenture Act. The Institutional Trustee shall also
comply with the other requirements of Section 313 of the Trust Indenture Act.
SECTION 2.4. Periodic Reports to Institutional Trustee
-----------------------------------------
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
file with the Institutional Trustee, and transmit to Holders, such information,
documents and other reports as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act, at
the times, in the form and in the manner provided pursuant to the Trust
Indenture Act.
Delivery of such reports, information and documents to the Institutional
Trustee is for informational purposes only and the Institutional Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Trust's compliance with any of its covenants hereunder (as to which the
Institutional Trustee is entitled to rely exclusively on Officers'
Certificates).
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
also provide to the Institutional Trustee on a timely basis such information as
the Institutional Trustee requires to enable the Institutional Trustee to
prepare and file any form required to be submitted by the Company with the
Internal Revenue Service and the Holders of the Securities relating to original
issue discount, if any, including, without limitation, Form 1099-OID or any
successor form.
SECTION 2.5. Evidence of Compliance with Conditions Precedent
------------------------------------------------
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6. Events of Default; Waiver
-------------------------
(a) The Holders of a Majority in liquidation amount of Preferred Securities
may, by vote, on behalf of the Holders of all of the Preferred Securities, waive
any past Event of Default in respect of the Preferred Securities and its
consequences, provided that, if the underlying Event of Default under the
Indenture:
10
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debentures (a "Super Majority") to
be waived under the Indenture, the Event of Default under the Declaration
may only be waived by the vote of the Holders of at least the proportion in
liquidation amount of the Preferred Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default under
the Declaration as provided below in this Section 2.6(b), the Event of
Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have waived
such Event of Default under the Declaration as provided below in this
Section 2.6(b), the Event of Default under the Declaration may only be
waived by the vote of the Holders of at least the proportion in liquidation
amount of the Common Securities that the relevant Super Majority represents
of the aggregate principal amount of the Debentures outstanding;
provided further, that each Holder of Common Securities will be deemed to
have waived any such Event of Default and all Events of Default with
respect to the Common Securities and its consequences until all Events of
Default with respect to the Preferred
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Securities have been cured, waived or otherwise eliminated, and until such
Events of Default have been so cured, waived or otherwise eliminated, the
Institutional Trustee will be deemed to be acting solely on behalf of the
Holders of the Preferred Securities and only the Holders of the Preferred
Securities will have the right to direct the Institutional Trustee in
accordance with the terms of the Securities. The foregoing provisions of
this Section 2.6(b) shall be in lieu of Sections 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act and such Sections 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act are hereby expressly excluded from
this Declaration and the Securities, as permitted by the Trust Indenture
Act. Subject to the foregoing provisions of this Section 2.6(b), upon such
waiver, any such default shall cease to exist and any Event of Default with
respect to the Common Securities arising therefrom shall be deemed to have
been cured for every purpose of this Declaration, but no such waiver shall
extend to any subsequent or other default or Event of Default with respect
to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee at the direction of the Holders of the Preferred
Securities constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice
------------------------
(a) The Institutional Trustee shall, within 90 days after the occurrence of
an Event of Default, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all defaults with respect to the
Securities actually known to a Responsible Officer of the Institutional Trustee,
unless such defaults have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 2.7(a) being hereby defined to be an
Event of Default as defined in the Indenture, not including any periods of grace
provided for therein and irrespective of the giving of any notice provided
therein); provided that, except for a default in the payment of principal of (or
premium, if any) or interest on any of the Debentures, the Institutional Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors and/or
Responsible Officers of the Institutional Trustee in good faith determines that
the withholding of such notice is in the interests of the Holders of the
Securities.
(b) The Institutional Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 5.01(1) and 5.01(2) of the Indenture; or
12
(ii) any default as to which the Institutional Trustee shall have
received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration
shall have actual knowledge.
ARTICLE III
ORGANIZATION OF TRUST
SECTION 3.1 Name
----
The Trust is named "BTI Capital Trust," as such name may be modified from
time to time by the Regular Trustees following 10 Business Days written notice
to the Holders of Securities. The Trust's activities may be conducted under the
name of the Trust or any other name deemed advisable by the Regular Trustees.
SECTION 3.2 Office
------
The address of the principal office of the Trust is c/o Breed Technologies,
Inc., 5300 Old Tampa Highway, Lakeland, Florida 33807, Attention: Charles J.
Speranzella, Jr. On ten Business Days written notice to the Holders of
Securities, the Regular Trustees may designate another principal office.
SECTION 3.3 Purpose
-------
The exclusive purposes and functions of the Trust are (a) to issue and sell
Securities and use the proceeds from such sale to acquire the Debentures, and
(b) except as otherwise limited herein, to engage in only those other activities
necessary or incidental thereto. The Trust shall not borrow money, issue debt or
reinvest proceeds derived from investments, pledge any of its assets, or
otherwise undertake (or permit to be undertaken) any activity that would cause
the Trust not to be classified for United States federal income tax purposes as
a grantor trust.
SECTION 3.4 Prohibition of Actions by the Trust and the Trustees
----------------------------------------------------
The Trust shall not, and the Trustees (including the Institutional Trustee)
shall not, engage in any activity other than as required or authorized by this
Declaration. In particular, the Trust shall not and the Trustees (including the
Institutional Trustee) shall not cause the Trust to:
(a) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of Securities
pursuant to the terms of this Declaration and of the Securities;
(b) acquire any assets other than as expressly provided herein;
13
(c) possess Trust property for other than a Trust purpose;
(d) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(e) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(f) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(g) other than as provided in this Declaration or Annex I hereto, (A)
direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures, (B)
waive any past default that is waivable under the Indenture, (C) exercise
any right to rescind or annul any declaration that the principal of all the
Debentures shall be due and payable, or (D) consent to any amendment,
modification or termination of the Indenture or the Debentures where such
consent shall be required unless the Trust shall have received an opinion
of counsel to the effect that such amendment or modification will not cause
more than an insubstantial risk that (i) the Trust will be deemed an
Investment Company required to be registered under the Investment Company
Act, or (ii) for United States federal income tax purposes the Trust will
not be classified as a grantor trust.
SECTION 3.5. General Authority of the Trustees
---------------------------------
Subject to the limitations provided in this Declaration and to the specific
duties of the Institutional Trustee, the Regular Trustees shall have exclusive
and complete authority to carry out the purposes of the Trust. An action taken
by the Regular Trustees in accordance with their powers shall constitute the act
of and serve to bind the Trust and an action taken by the Institutional Trustee
on behalf of the Trust in accordance with its powers shall constitute the act of
and serve to bind the Trust. In dealing with the Trustees acting on behalf of
the Trust, no person shall be required to inquire into the authority of the
Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.
SECTION 3.6. Title to Property of the Trust
------------------------------
Except as provided in Section 5.11 with respect to the Debentures and the
Institutional Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
14
SECTION 3.7. Not Responsible for Recitals or Issuance of Securities
------------------------------------------------------
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.8. Duration of the Trust
---------------------
The Trust, unless dissolved pursuant to the provisions of Section 3.10
hereof, shall exist until November 15, 2027.
SECTION 3.9. Mergers
-------
(a) The Trust may not 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 Person, except as described in Sections
3.9(b) and 3.9(c).
(b) The Trust may, with the consent of the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees, and without the consent
of the Holders of the Securities, the Delaware Trustee or the Institutional
Trustee, consolidate, amalgamate, merge with or into, or be replaced by, or
convey, transfer or lease its properties substantially as an entirety to, a
trust organized as such under the laws of any state of the United States;
provided that:
(i) if the Trust is not the survivor, such successor entity (the
"Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust under
the Securities; or
(B) substitutes for the Preferred Securities other securities
having substantially the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank the
same as the Preferred Securities with respect to Distributions, assets
and payments upon liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the Holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities are listed,
or any Successor Securities will be listed upon notification of issuance,
on any national
15
securities exchange or with another organization on which the Preferred
Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Preferred Securities
(including any Successor Securities) to be downgraded by any nationally
recognized statistical rating organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Preferred Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of the Holders'
interest in the new entity);
(vi) such Successor Entity has a purpose substantially identical to
that of the Trust;
(vii) the Sponsor guarantees the obligations of such Successor Entity
under the Successor Securities at least to the extent provided by the
Securities Guarantees; and
(viii) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Sponsor has received an opinion of a
nationally recognized independent counsel to the Trust reasonably
acceptable to the Institutional Trustee and experienced in such matters to
the effect that:
(A) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, will not adversely affect the rights,
preferences and privileges of the Holders of the Securities (including
any Successor Securities) in any material respect (other than with
respect to any dilution of the Holders' interest in the new entity);
(B) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor the
Successor Entity will be required to register as an Investment
Company; and
(C) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Trust (or the
Successor Entity) will be treated as a grantor trust for United States
federal income tax purposes.
(c) Notwithstanding Section 3.9(b), the Trust shall not, except with the
consent of Holders of 100% in liquidation amount of the Securities, consolidate,
amalgamate, merge with or into, or be replaced by, or convey, transfer or lease
its properties and assets substantially as an entirety to, any other entity or
permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if in the opinion of a nationally recognized independent tax counsel
experienced in such matters, such consolidation, amalgamation, merger,
replacement,
16
conveyance, transfer or lease, would cause the Trust or Successor Entity to be
classified as other than a grantor trust for United States federal income tax
purposes.
SECTION 3.1 Termination and Dissolution of the Trust
----------------------------------------
(a) The Trust shall dissolve:
(i) upon the bankruptcy of the Sponsor or the Holder of the Common
Securities;
(ii) upon the filing of a certificate of dissolution or its equivalent
with respect to the Sponsor or the Holder of the Common Securities,
obtaining the consent of at least a Majority in liquidation amount of the
Securities, voting together as a single class, to dissolve the Trust, or
the revocation of the Certificate of Incorporation of the Sponsor or the
Holder of the Common Securities and the expiration of 90 days after the
date of revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of the Holder
of the Common Securities, the Sponsor or the Trust;
(iv) when all of the Securities shall have been called for redemption
and the amounts necessary for redemption thereof, including any
Additional Interest and Compound Interest, shall have been paid to the
Holders in accordance with the terms of the Securities;
(v) upon the occurrence and continuation of a Special Event pursuant
to which the Trust shall have been dissolved in accordance with the terms
of the Securities and, after satisfaction of liabilities of creditors
(whether by payment or reasonable provisions for payment), all of the
Debentures held by the Institutional Trustee shall have been distributed to
the Holders of Securities in exchange for all of the Securities;
(vi) upon the distribution of the Common Stock to all Securities
Holders upon conversion of all outstanding Preferred Securities;
(vii) the expiration of the term of the Trust on November 15, 2027; or
(viii) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 3.10(a), the Regular Trustees shall pay (or make
provision for the payment of) all claims against the Trust and shall execute and
file a certificate of cancellation with the Secretary of State of the State of
Delaware.
17
(c) The provisions of Article IX shall survive the termination of the
Trust.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities
---------------------------------------
On the Closing Date and on any other date Preferred Securities and Common
Securities are sold pursuant to the over-allotment option granted in the
Purchase Agreement, the Sponsor will purchase all of the Common Securities
issued by the Trust, in an aggregate amount at least equal to 3% of the capital
of the Trust, at the same time as the Preferred Securities are sold.
SECTION 4.2 Responsibilities of the Sponsor
-------------------------------
In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) prepare and execute, if necessary, the Offering Memorandum in
preliminary and final form, in relation to the offering and sale of the
Preferred Securities to QIBs in reliance on Rule 144A and outside the United
States to non-U.S. persons in offshore transactions in reliance on Regulation S;
(b) to prepare for filing by the Trust with the Commission a registration
statement on Form S-3 in relation to the Preferred Securities, including any
amendments thereto;
(c) prepare for execution and filing by the Trust of an application to the
PORTAL Market;
(d) prepare for execution and filing by the Trust of documents, or
instruments to be delivered to the Depositary relating to the Preferred
Securities;
(e) prepare for execution and filing by the Trust of a registration
statement on Form 8-A, including any amendments thereto, relating to the
registration of the Preferred Securities under Section 12(b) of the Exchange
Act;
(f) to determine the States in which to take appropriate action to qualify
or register for sale all or part of the Preferred Securities and to do any and
all such acts, other than actions which must be taken by the Trust, and advise
the Trust of actions it must take, and prepare for execution and filing any
documents to be executed and filed by the Trust, as the Sponsor deems necessary
or advisable in order to comply with the applicable laws of any such States;
18
(g) to negotiate the terms of the Purchase Agreement and other agreements,
documents and instruments providing for the sale of the Preferred Securities;
and
(h) to negotiate the terms of, and execute, the Registration Rights
Agreement providing for, among other things, the registration under the
Securities Act of resales from time to time of the Preferred Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees
------------------
The initial number of Trustees shall be five.
The number of Trustees may be increased or decreased by vote of the
Holders of a majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities; provided, however,
that the number of Trustees shall in no event be fewer than two; provided
further that (i) there shall be at least one Regular Trustee who is an employee
or officer of, or is affiliated with, the Sponsor and (ii) one Trustee shall be
the Institutional Trustee for so long as this Declaration is required to qualify
as an indenture under the Trust Indenture Act, and such Trustee may also serve
as Delaware Trustee if it meets the applicable requirements.
SECTION 5.2 Delaware Trustee; Eligibility
-----------------------------
If required by the Business Trust Act, one Trustee (the "Delaware Trustee")
shall be
(a) a natural person who is resident of the State of Delaware; or
(b) if not a natural person, an entity that has its principal place of
business in the State of Delaware, and otherwise meets the requirements of
applicable law, provided that, if the Institutional Trustee has its principal
place of business in the State of Delaware and otherwise meets the requirements
of applicable law, then the Institutional Trustee may also be the Delaware
Trustee and Section 5.14 shall have no application to such Person in its
capacity as Institutional Trustee.
SECTION 5.3 Institutional Trustee; Eligibility
----------------------------------
(a) There shall at all times be one Trustee that shall act as Institutional
Trustee and that shall:
(i) not be an Affiliate of the Sponsor;
19
(ii) be a corporation organized and doing business under the laws of
the United States of America or any state or territory thereof or of the
District of Columbia, or a Person permitted by the Commission to act as an
institutional trustee under the Trust Indenture Act, authorized under such
laws to exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000, and subject to supervision or examination
by federal, state, territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then for the purposes of this Section 5.3(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published; and
(iii) if the Trust is excluded from the definition of an Investment
Company solely by means of Rule 3a-5 and to the extent the Investment
Company Act or Trust Indenture Act requires a trustee having certain
qualifications to hold title to the "eligible assets" of the Trust, the
Institutional Trustee shall possess those qualifications.
(b) If at any time the Institutional Trustee shall cease to be eligible to
so act under Section 5.3(a), the Institutional Trustee shall immediately resign
in the manner and with the effect set forth in Section 5.6(d).
(c) If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Institutional Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in Section 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
(d) The Preferred Securities Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first provision
contained in Section 310(b) of the Trust Indenture Act.
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally
-----------------------------------------------------------------
Each Regular Trustee and the Delaware Trustee (unless the Institutional
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
20
SECTION 5.5 Initial Trustees
----------------
(a) The initial Regular Trustees are:
Charles J. Speranzella, Jr.
c/o Breed Technologies, Inc.
5300 Old Tampa Highway
Lakeland, Florida 33807
Fred J. Musone
c/o Breed Technologies, Inc.
5300 Old Tampa Highway
Lakeland, Florida 33807
Frank J. Gnisci
c/o Breed Technologies, Inc.
5300 Old Tampa Highway
Lakeland, Florida 33807
The initial Delaware Trustee is:
Wilmington Trust Company
1100 North Market Square
Rodney Square North
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
The initial Institutional Trustee is:
Wilmington Trust Company
1100 North Market Square
Rodney Square North
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
SECTION 5.6 Appointment, Removal and Resignation of Trustees
------------------------------------------------
(a) Subject to Sections 5.6(b) and 5.6(c), Trustees may be appointed or
removed without cause at any time by vote of the Holders of a majority in
liquidation amount of the Common Securities voting as a class.
(b) The Trustee that acts as Institutional Trustee shall not be removed in
accordance with Section 5.6(a) until a successor possessing the qualifications
to act as an Institutional Trustee under Section 5.3 (a "Successor Institutional
Trustee") has been appointed and has
21
accepted such appointment by instrument executed by such Successor Institutional
Trustee and delivered to the Trust, the Sponsor and the removed Institutional
Trustee.
(c) The Trustee that acts as Delaware Trustee shall not be removed in
accordance with Section 5.6(a) until a successor possessing the qualifications
to act as Delaware Trustee under Sections 5.2 and 5.4 (a "Successor Delaware
Trustee") has been appointed and has accepted such appointment by instrument
executed by such Successor Delaware Trustee and delivered to the Trust, the
Sponsor and the removed Delaware Trustee.
(d) A Trustee appointed to office shall hold office until his, her or its
successor shall have been appointed or until his, her or its death, removal,
resignation, dissolution or liquidation. Any Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
signed by the Trustee and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the Institutional
Trustee shall be effective:
(A) until a Successor Institutional Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Institutional Trustee and delivered to the Trust, the
Sponsor and the resigning Institutional Trustee; or
(B) until the assets of the Trust have been completely liquidated
and the proceeds thereof distributed to the holders of the Securities;
and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(e) The Holders of the Common Securities shall use their best efforts to
promptly appoint a Successor Institutional Trustee or Successor Delaware
Trustee, as the case may be, if the Institutional Trustee or the Delaware
Trustee delivers an instrument of resignation in accordance with Section 5.6(d).
(f) If no Successor Institutional Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.6 within 60 days after delivery pursuant to this Section 5.6 of an instrument
of resignation or removal, the Institutional Trustee or Delaware Trustee
resigning or being removed, as applicable, may petition any court of competent
jurisdiction for appointment of a Successor Institutional Trustee or Successor
Delaware Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may
22
deem proper and prescribe, appoint a Successor Institutional Trustee or
Successor Delaware Trustee, as the case may be.
(g) No Institutional Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.7 Vacancies among Trustees
------------------------
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two Regular Trustees, a majority of the Regular Trustees, shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.6.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to dissolve the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee in accordance with Section 5.6, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
SECTION 5.8 Merger, Conversion, Consolidation or Succession to Business of a
----------------------------------------------------------------
Trustee
- -------
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided that such corporation shall be otherwise qualified and eligible under
this Article V, without the execution or filing of any paper or any further act
on the part of any of the parties hereto.
SECTION 5.9 Authority, Powers and Duties of the Regular Trustees
----------------------------------------------------
(a) The Regular Trustees shall have the exclusive power, duty and
authority to engage in the following activities on behalf of the Trust:
(i) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided, however, that the
Trust may issue no more
23
than one series of Preferred Securities and no more than one series of
Common Securities, and, provided further, that there shall be no interests
in the Trust other than the Securities, and the issuance of Securities
shall be limited to simultaneous issuance of both Preferred Securities and
Common Securities on the Closing Date and any other date Preferred
Securities and Common Securities are sold pursuant to the over-allotment
option granted in the Purchase Agreement;
(ii) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(A) prepare and execute, if necessary, an offering memorandum
(the "Offering Memorandum") in preliminary and final form prepared by
the Sponsor, in relation to the offering and sale of Preferred
Securities to QIBs in reliance on Rule 144A and outside the United
States to non-U.S. persons in offshore transactions in reliance on
Regulation S;
(B) execute and file an application, prepared by the Sponsor, to
the PORTAL Market;
(C) execute and deliver letters, documents, or instruments with
the Depositary relating to the Preferred Securities;
(D) execute and file with the Commission, at such time as
determined by the Sponsor, a registration statement on Form 8-A,
including any amendments thereto, prepared by the Sponsor relating to
the registration of the Preferred Securities under Section 12(b) of
the Exchange Act;
(E) execute and file with the Commission a registration statement
on Form S-1 or S-3 prepared by the Sponsor, including any amendments
thereto, pertaining to the resale from time to time of the Preferred
Securities; and
(F) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor to be necessary in order to
qualify or register all or part of the Preferred Securities in any
State in which the Sponsor has determined to qualify or register such
Preferred Securities for sale or resale, as the case may be;
(iii) execute and perform the Purchase Agreement and other
agreements, documents and instruments providing for the sale of the
Preferred Securities;
(iv) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that the
Regular Trustees shall cause legal title to the Debentures to be held of
record in the name of the Institutional
24
Trustee for the benefit of the Holders of the Preferred Securities and the
Holders of Common Securities;
(v) to give the Sponsor and the Institutional Trustee prompt written
notice of the occurrence of a Special Event; provided that the Regular
Trustees shall consult with the Sponsor and the Institutional Trustee
before taking or refraining from taking any Ministerial Action in relation
to a Special Event;
(vi) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and
with respect to, for the purposes of Section 316(c) of the Trust Indenture
Act, Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Preferred Securities and Holders of
Common Securities as to such actions and applicable record dates;
(vii) to take all actions and perform such duties as may be required
of the Regular Trustees pursuant to the terms of the Securities;
(viii) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 5.11(e), the
Institutional Trustee has the exclusive power to bring such Legal Action;
(ix) to employ or otherwise engage agents and managers, advisors, and
consultants and pay reasonable compensation for such services;
(x) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(xi) to give the certificate required by Section 314(a)(4) of the
Trust Indenture Act to the Institutional Trustee, which certificate may be
executed by any Regular Trustee;
(xii) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(xiii) to act as, or appoint another Person to act as registrar and
transfer agent for the Securities;
(xiv) to give prompt written notice to the Holders of the Securities
of any notice received from the Debenture Issuer of its election to defer
payments of interest on the Debentures by extending the interest payment
period under the Indenture;
25
(xv) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(xvi) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the Preferred Securities or to enable the Trust to effect the purposes for
which the Trust was created;
(xvii) to take any action, not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of
the Trust as set out in this Section 5.9, including, but not limited to:
(A) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(B) causing the Trust to be classified for United States federal
income tax purposes as a grantor trust; and
(C) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes;
provided that such action does not adversely affect the interests of
Holders; and
(xviii) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with
respect to the Trust to be duly prepared and filed by the Regular Trustees,
on behalf of the Trust.
(b) The Regular Trustees must exercise the powers set forth in this Section
5.9 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Regular Trustees shall not take any action that
is inconsistent with the purposes and functions of the Trust set forth in
Section 3.3. Except as otherwise required by the Business Trust Act or any
applicable law, and except as may otherwise be required by this Declaration, any
Regular Trustee is authorized to execute on behalf of the Trust any documents
that the Regular Trustees have the power and authority to execute pursuant to
this Section 5.9.
(c) Subject to this Section 5.9, the Regular Trustees shall have none of
the powers or the authority of the Institutional Trustee set forth in Section
5.11.
26
(d) Any expenses incurred by the Regular Trustees pursuant to this Section
5.9 shall be reimbursed by the Debenture Issuer.
SECTION 5.10 Delegation of Powers and Duties of the Regular Trustees
-------------------------------------------------------
The Regular Trustees shall have power to delegate from time to time to such
of their number or to officers of the Trust the doing of such things and the
execution of such instruments either in the name of the Trust or the names of
the Regular Trustees or otherwise as the Regular Trustees may deem expedient, to
the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein. The Regular Trustees may, by
power of attorney consistent with applicable law, delegate to any other natural
person over the age of 21 their power for the purpose of executing any documents
contemplated in Section 5.9.
SECTION 5.11 Powers and Duties of the Institutional Trustee
----------------------------------------------
(a) The legal title to the Debentures shall be owned by and held of record
in the name of the Institutional Trustee in trust for the benefit of the Holders
of the Securities. The right, title and interest of the Institutional Trustee to
the Debentures shall vest automatically in each Person who may hereafter be
appointed as Institutional Trustee in accordance with Section 5.6. Such vesting
and cessation of title shall be effective whether or not conveyancing documents
with regard to the Debentures have been executed and delivered.
(b) The Institutional Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Institutional Trustee Account") in the name of and under the
exclusive control of the Institutional Trustee on behalf of the Holders of
the Securities and, upon the receipt of payments of funds made in respect
of the Debentures held by the Institutional Trustee, deposit such funds
into the Institutional Trustee Account and make payments to the Holders of
the Preferred Securities and Holders of the Common Securities from the
Institutional Trustee Account in accordance with Section 6.1. Funds in the
Institutional Trustee Account shall be held uninvested until disbursed in
accordance with this Declaration. The Institutional Trustee Account shall
be an account that is maintained with the Institutional Trustee or, if the
Preferred Securities are rated, at a banking institution the rating on
whose long-term unsecured indebtedness is at least equal to the rating
assigned to the Preferred Securities by a "nationally recognized
statistical rating organization," as that term is defined for purposes of
Rule 436(g)(2) under the Securities Act;
27
(ii) engage in such ministerial activities as so directed and as shall
be necessary or appropriate to effect the redemption of the Preferred
Securities and the Common Securities to the extent the Debentures are
redeemed or mature; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as so directed as shall be necessary or appropriate
to effect the distribution of the Debentures to Holders of Securities upon
the occurrence of certain Special Events pursuant to the terms of the
Securities.
(d) The Institutional Trustee shall take all actions and perform such
duties as may be specifically required of the Institutional Trustee pursuant to
the terms of the Securities.
(e) The Institutional Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a holder of Debentures under the Indenture
and, if an Event of Default actually known to a Responsible Officer of the
Institutional Trustee occurs and is continuing, the Institutional Trustee shall,
for the benefit of Holders of the Securities, but subject to the rights of the
Holders pursuant to the terms of such Securities, enforce its rights as holder
of the Debentures, including the right to take any Legal Action which arises out
of or in connection with such an Event of Default.
(f) The Institutional Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Institutional Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all Securities and any such
Paying Agent shall comply with Section 317(b) of the Trust Indenture Act. Any
Paying Agent may be removed by the Institutional Trustee at any time and a
successor Paying Agent or additional Paying Agents may be appointed at any time
by the Institutional Trustee.
(h) Subject to this Section 5.11, the Institutional Trustee shall have none
of the duties, liabilities, powers or the authority of the Regular Trustees set
forth in Section 5.9.
(i) The Institutional Trustee must exercise the powers set forth in this
Section 5.11 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3,
28
and the Institutional Trustee shall not take any action that is inconsistent
with the purposes and functions of the Trust set out in Section 3.3
SECTION 5.12 Certain Duties and Responsibilities of the Institutional Trustee
----------------------------------------------------------------
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing or waiving of all Events of Default that may have
occurred, shall undertake to perform only such duties and obligations as are
specifically set forth in this Declaration and no implied covenants shall be
read into this Declaration against the Institutional Trustee. In case an Event
of Default has occurred (that has not been cured or waived pursuant to Section
2.6) of which a Responsible Officer of the Institutional Trustee has actual
knowledge, the Institutional Trustee shall exercise such rights and powers
vested in it by this Declaration, and use the same degree of care and skill in
its exercise, as a prudent individual would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that prior to
the occurrence of an Event of Default and after the curing or waiving of all
such Events of Default that may have occurred, in the absence of bad faith on
the part of the Institutional Trustee, the Institutional Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished to the
Institutional Trustee and conforming to the requirements of this Declaration;
but in the case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the Institutional Trustee,
the Institutional Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Declaration.
(c) The Institutional Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Institutional Trustee, unless
it shall be proved that the Institutional Trustee was negligent in ascertaining
the pertinent facts.
(d) The Institutional Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a Majority in liquidation amount of
the Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Institutional Trustee, or exercising
any trust or power conferred upon the Institutional Trustee under this
Declaration.
(e) The Institutional Trustee shall not be responsible for monitoring the
compliance by the Regular Trustees or the Sponsor with their respective duties
under this Declaration, nor shall the Institutional Trustee be liable for any
default or misconduct of the Regular Trustees or the Sponsor.
29
(f) No provision of this Declaration shall require the Institutional
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it under the
terms of this Declaration or indemnity reasonably satisfactory to the
Institutional Trustee against such risk or liability is not reasonably assured
to it.
(g) The Institutional Trustee's sole duty with respect to the custody, safe
keeping and physical preservation of the Debentures and the Institutional
Trustee Account shall be to deal with such property in a similar manner as the
Institutional Trustee deals with similar property for its own account, subject
to the protections and limitations on liability afforded to the Institutional
Trustee under this Declaration and the Trust Indenture Act.
(h) The Institutional Trustee shall not be liable for any interest on any
money received by it except as it may otherwise agree in writing with the
Sponsor. Money held by the Institutional Trustee need not be segregated from
other funds held by it except in relation to the Institutional Trustee Account
maintained by the Institutional Trustee pursuant to Section 5.11(c)(i) and
except to the extent otherwise required by law.
(i) The Institutional Trustee shall have no duty or liability for or with
respect to the value, genuineness, existence or sufficiency of the Debentures or
the payment of any taxes or assessments levied thereon or in connection
therewith.
SECTION 5.13 Certain Rights of Institutional Trustee
---------------------------------------
(a) Subject to the provisions of Section 5.12:
(i) the Institutional Trustee may rely and shall be fully protected
in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional 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 Sponsor or the Regular Trustees;
30
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel of its choice
or other experts and the advice or opinion of such counsel and experts with
respect to legal matters or advice within the scope of such experts' area
of expertise shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion, such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include any of its
employees. The Institutional Trustee shall have the right at any time to
seek instructions concerning the administration of this Declaration from
any court of competent jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of any Holder, unless such Holder shall have
provided to the Institutional Trustee adequate security and indemnity,
reasonably satisfactory to the Institutional Trustee, against the costs,
expenses (including reasonable attorneys' fees and expenses and the
expenses of the Institutional Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by the
Institutional Trustee; provided that, nothing contained in this Section
5.13(a)(vi) shall be taken to relieve the Institutional Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the rights
and powers vested in it by this Declaration;
(vii) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, security, bond, debenture, note, other evidence
of indebtedness or other paper or document, but the Institutional Trustee,
in its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Institutional Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Institutional Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Institutional
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration,
31
both of which shall be conclusively evidenced by the Institutional
Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Institutional Trustee (A) may request instructions from the
Holders of the Securities, which instructions may be given only by the
Holders of the same proportion in liquidation amount of the Securities as
would be entitled to direct the Institutional Trustee under the terms of
the Securities in respect of such remedy, right or action, (B) may refrain
from enforcing such remedy or right or taking such other action until such
instructions are received, and (C) shall be fully protected in acting in
accordance with such instructions;
(xi) except as otherwise expressly provided by this Declaration, the
Institutional Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration; and
(xii) the Institutional Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose any duty or
obligation on the Institutional 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 Institutional 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 Institutional
Trustee shall be construed to be a duty.
SECTION 5.14. Delaware Trustee
----------------
Notwithstanding any other provision of this Declaration other than Section
5.2, the Delaware Trustee shall not be entitled to exercise any powers, nor
shall the Delaware Trustee have any of the duties and responsibilities of the
Regular Trustees or the Institutional Trustee described in this Declaration.
Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of Section 3807 of
the Business Trust Act. The duties of the Delaware Trustee shall be limited to
(a) accepting legal process served on the Trust in the State of Delaware and (b)
the execution of any certificates required to be filed with the Delaware
Secretary of State which the Delaware Trustee is required to execute under
Section 3811 of the Business Trust Act.
32
SECTION 5.15 Meetings
--------
If there is more than one Regular Trustee, meetings of the Regular Trustees
shall be held from time to time upon the call of any Regular Trustee. Regular
meetings of the Regular Trustees may be held at a time and place fixed by
resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of an activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Regular Trustees. In the event there is only one Regular
Trustee, any and all action of such Regular Trustee shall be evidenced by a
written consent of such Regular Trustee.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions
-------------
If and to the extent that the Debenture Issuer makes a payment of interest
(including Compounded Interest), Additional Interest, premium and/or principal
on the Debentures held by the Institutional Trustee (the amount of any such
payment being a "Payment Amount"), the Institutional Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders of Preferred
Securities and Common Securities in accordance with the preferences set forth in
the respective terms of such Securities, as described it Annex I hereto.
33
ARTICLE VII
THE SECURITIES
SECTION 7.1 Title and Terms
---------------
The Regular Trustees shall on behalf of the Trust issue one class of
convertible preferred securities, representing undivided beneficial interests in
the assets of the Trust (the "Preferred Securities"), and one class of
convertible common securities, representing undivided beneficial interests in
the assets of the Trust (the "Common Securities"), each having such terms (the
"Terms") as are set forth in Annex I. The Trust shall issue no securities or
other interests in the assets of the Trust other than the Preferred Securities
and the Common Securities. The aggregate number of Preferred Securities
outstanding at any time shall not exceed the number set forth in the Terms in
Annex I hereto.
The Terms of the Securities set forth in Annex I and the forms of
Certificates set forth in Exhibits A-1 and A-2 are part of the terms of this
Declaration and to the extent applicable, the Institutional Trustee and the
Sponsor, by their execution and delivery of this Declaration, expressly agree to
such Terms and to be bound thereby.
SECTION 7.2 General Provisions Regarding the Securities
-------------------------------------------
(a) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(b) Upon issuance of the Securities as provided in this Declaration, the
Securities so issued shall be validly issued, fully paid and nonassessable.
(c) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
SECTION 7.3 General Form of Certificates
----------------------------
The Preferred Security Certificates and the Institutional Trustee's
certificate of authentication shall be substantially in the form of Exhibit A-1
and the Common Security Certificates shall be substantially in the form of
Exhibit A-2, each of which is hereby incorporated in and expressly made a part
of this Declaration.
The Certificates may have letters, numbers, notations or other marks of
identification or designation and such legends or endorsements required by law,
stock exchange rule, agreements to which the Trust is subject, if any, or usage.
The Trust at the direction of the Sponsor shall furnish any such legend not
contained in Exhibit A-1 to the Institutional Trustee in writing.
34
The Certificates shall be printed, lithographed or engraved or produced by
any combination of these methods on steel engraved borders as determined by the
Regular Trustees, as evidenced by their execution thereof.
SECTION 7.4 Execution and Authentication of Certificates
--------------------------------------------
(a) The Certificates shall be signed on behalf of the Trust by a Regular
Trustee. In case any Regular Trustee who shall have signed any of the
Certificates shall cease to be such Regular Trustee before the Certificates so
signed shall be delivered by the Trust, such Certificates nevertheless may be
delivered as though the person who signed such Certificates had not ceased to be
such Regular Trustee; and any Certificates may be signed on behalf of the Trust
by such persons who, at the actual date of execution of such Certificate, shall
be the Regular Trustees of the Trust, although at the date of the execution and
delivery of the Declaration any such person was not such a Regular Trustee. Each
Preferred Security shall be dated the date of its authentication.
(b) One Regular Trustee shall sign the Preferred Security Certificates for
the Trust by manual or facsimile signature. Unless otherwise determined by the
Trust, such signature shall, in the case of Common Security Certificates, be a
manual signature.
A Preferred Security shall not be valid until authenticated by the manual
or facsimile signature of an authorized signatory of the Institutional Trustee.
The signature shall be conclusive evidence that the Preferred Security has been
authenticated under this Declaration.
Upon a written order of the Trust signed by one Regular Trustee, the
Institutional Trustee shall authenticate the Preferred Securities for original
issue.
The Institutional Trustee may appoint an authenticating agent acceptable to
the Trust to authenticate Preferred Securities. An authenticating agent may
authenticate Preferred Securities whenever the Institutional Trustee may do so.
Each reference in this Declaration to authentication by the Institutional
Trustee includes authentication by such agent. An authenticating agent has the
same rights as the Institutional Trustee to deal with the Company or an
Affiliate of the Company.
SECTION 7.5 Paying Agent and Conversion Agent
---------------------------------
In the event that the Preferred Securities are not in book-entry only form,
the Trust shall maintain in the Borough of Manhattan, City of New York, State of
New York, or in the City of Wilmington, State of Delaware, an office or agency
where the Preferred Securities may be presented for payment ("Paying Agent").
The Trust shall maintain an office or agency where Securities may be presented
for conversion ("Conversion Agent"). The Trust may appoint the Paying Agent and
the Conversion Agent and may appoint one or more additional paying agents and
one or more additional conversion agents in such other locations as it shall
determine. The
35
term "Paying Agent" includes any additional paying agent and the
term "Conversion Agent" includes any additional conversion agent. The Trust may
change any Paying Agent or Conversion Agent without prior notice to any Holder.
The Trust shall notify the Institutional Trustee in writing of the name and
address of any Agent not a party to this Declaration. If the Trust fails to
appoint or maintain another entity as Paying Agent or Conversion Agent, the
Institutional Trustee shall act as such. The Trust or any of its Affiliates may
act as Paying Agent or Conversion Agent. The Trust shall act as Paying Agent
and Conversion Agent for the Common Securities. The Paying Agent and Conversion
Agent shall be entitled to the rights and protections extended to the
Institutional Trustee when acting in such capacity.
The Institutional Trustee is hereby initially appointed as Conversion Agent
for the Preferred Securities.
SECTION 7.6 Outstanding Preferred Securities
--------------------------------
The Preferred Securities outstanding at any time are all the Preferred
Securities authenticated by the Institutional Trustee except for those cancelled
by it, those delivered to it for cancellation, and those described in this
Section 7.6 as not outstanding.
If a Preferred Security is replaced pursuant to Section 8.8 or paid in
full, it ceases to be outstanding unless the Institutional Trustee receives
proof satisfactory to it that the replaced, paid or purchased Preferred Security
is held by a bona fide purchaser.
If Preferred Securities are considered paid in accordance with the terms of
this Declaration, they cease to be outstanding and return on them ceases to
accrue.
A Preferred Security does not cease to be outstanding because one of the
Trust, the Sponsor or an Affiliate of the Sponsor holds the Preferred Security.
SECTION 7.7 Preferred Securities in Treasury
--------------------------------
In determining whether the Holders of the required amount of Securities
have concurred in any direction, waiver or consent, Preferred Securities owned
by the Trust, the Sponsor or an Affiliate of the Sponsor, as the case may be,
shall be disregarded and deemed not to be outstanding, except that for the
purposes of determining whether the Institutional Trustee shall be fully
protected in relying on any such direction, waiver or consent, only Preferred
Securities which the Institutional Trustee knows are so owned shall be so
disregarded.
36
ARTICLE VII
TRANSFERS, EXCHANGES AND CANCELLATIONS OF SECURITIES
SECTION 8.1 Transfer of Securities.
----------------------
(a) Securities may only be transferred, in whole or in part, in accordance
with the terms and conditions set forth in this Declaration and in the terms of
the Securities. Any transfer or purported transfer of any Security not made in
accordance with this Declaration shall be null and void.
(b) Subject to this Article 8, Preferred Securities shall be freely
transferable.
(c) Subject to this Article 8, the Sponsor and any Related Party may only
transfer Common Securities to the Sponsor or a Related Party of the Sponsor;
provided that, any such transfer is subject to the condition precedent that the
transferor obtain the written opinion of nationally recognized independent
counsel experienced in such matters that such transfer would not cause more than
an insubstantial risk that:
(i) the Trust would not be classified for United States federal income
tax purposes as a grantor trust; and
(ii the Trust would be an Investment Company required to register
under the Investment Company Act or the transferee would become an
Investment Company required to register under the Investment Company Act.
(d) Each Security that bears or is required to bear the legend set forth in
this Section 8.1(d) (a "Restricted Security") shall be subject to the
restrictions on transfer provided in the legend set forth in this Section
8.1(d), unless such restrictions on transfer shall be waived by the written
consent of the Regular Trustees, and the Holder of each Restricted Security, by
such securityholder's acceptance thereof, agrees to be bound by such
restrictions on transfer. As used in this Section 8.1(d) and in Section 8.4(f),
the term "transfer" encompasses any sale, pledge, transfer or other disposition
of any Restricted Security.
Prior to the Transfer Restriction Termination Date, the 144A Global
Security, Temporary Regulation S Global Security, each Definitive Preferred
Security and any certificate evidencing Common Stock issued upon conversion
thereof shall bear a legend in substantially the following form, unless
otherwise agreed by the Regular Trustees (with written notice thereof to the
Institutional Trustee):
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1)
37
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT), OR (B) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL
NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR
OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO BREED TECHNOLOGIES, INC. OR
ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
(C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE)
OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS
AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, THE TRANSFEROR MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF
SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE INSTITUTIONAL TRUSTEE. THE
TRUST AGREEMENT CONTAINS A PROVISION REQUIRING THE INSTITUTIONAL TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE
FOREGOING RESTRICTIONS. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION",
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
Following the Transfer Restrictions Termination Date or the sale of a
Security or Common Stock for which a transfer is permitted pursuant to an
effective registration statement or Rule 144, any Security or security issued in
exchange or substitution therefor (other than (i) Securities acquired by the
Sponsor or any Affiliate thereof and (ii) Common Stock issued upon the
conversion or exchange of any Security described in clause (i) above) may upon
surrender of such Security for exchange to any Regular Trustee on behalf of the
Trust in accordance with the provisions of this Section 8.1(d), be exchanged for
a new Security or Securities, of like tenor and aggregate liquidation amount,
which shall not bear the restrictive legend required by this Section 8.1(d).
Any Preferred Security or Common Stock issued upon the conversion or
exchange of a Preferred Security that, prior to the Transfer Restriction
Termination Date, is purchased or owned by the Sponsor or any Affiliate thereof
may not be resold by the Sponsor or such Affiliate unless registered under the
Securities Act or resold pursuant to an exemption from the registration
requirements of the Securities Act in a transaction that results in such
Preferred Securities or
38
Common Stock, as the case may be, no longer being "restricted securities" (as
defined under Rule 144).
SECTION 8.2 Transfer of Certificates.
------------------------
The Regular Trustees shall provide for the registration of Certificates and
of transfers of Certificates, which will be effected without charge but only
upon payment (with such indemnity as the Regular Trustees may require) in
respect of any tax or other government charges that may be imposed in relation
to it. Upon surrender for registration of transfer of any Certificate, the
Regular Trustees shall cause one or more new Certificates to be issued in the
name of the designated transferee or transferees. Every Certificate surrendered
for registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Certificate
surrendered for registration of transfer shall be canceled by the Regular
Trustees. A transferee of a Certificate shall be entitled to the rights and
subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Certificate. By acceptance of a Certificate, each transferee
shall be deemed to have agreed to be bound by this Declaration.
SECTION 8.3 Deemed Security Holders.
-----------------------
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 8.4 Book Entry Interests.
--------------------
(a) So long as Preferred Securities are eligible for book-entry settlement
with a Clearing Agency or unless otherwise required by law, all Preferred
Securities that are so eligible may be represented by one or more fully
registered Preferred Security Certificates (each a "Global Certificate") in
global form to be delivered to the Depositary, the initial Clearing Agency, by,
or on behalf of, the Trust. Such Global Certificates shall initially be
registered on the books and records of the Trust in the name of Cede & Co., the
nominee of the initial Depositary, and no Preferred Security Beneficial Owner
will receive a definitive Preferred Security Certificate representing such
Preferred Security Beneficial Owner's interests in such Global Certificates,
except as provided in Section 8.7 below. The transfer and exchange of
beneficial interests in any such Security in global form shall be effected
through the Clearing Agency in accordance with this Declaration and the
procedures of the Clearing Agency therefor.
(b) Preferred Securities that upon initial issuance are beneficially owned
by QIBs may, at the option of the Trust, be represented by a Global Certificate
(a "144A Global
39
Security"), and Preferred Securities that upon initial issuance are
beneficially owned by Non-U.S. persons may, at the option of the Trust, be
represented by another Global certificate (a "Temporary Regulation S Global
Security"). At any time on or after January 4, 1998 (the "Regulation S
Securities Exchange Date"), a single permanent Global Certificate without the
legend set forth in Section 8.1(d) (the "Permanent Regulation S Global
Security", and together with the Temporary Regulation S Global Security, the
"Regulation S Global Securities") shall be deposited with the Clearing Agency,
and the Institutional Trustee shall make endorsements reflecting a decrease in
the principal amount of the Temporary Regulation S Global Security in an amount
equal to the principal amount of the beneficial interest in the Temporary
Regulation S Global Security transferred. Transfers of interests in the
Preferred Securities between any 144A Global Security and any Regulation S
Global Security will be made in accordance with the standing instructions and
procedures of the Clearing Agency and its participants. The Institutional
Trustee shall make appropriate endorsements to reflect increases or decreases in
the amount of such Preferred Securities in global form to reflect any such
transfers.
Except as provided below, beneficial owners of a Preferred Security in
global form shall not be entitled to have certificates registered in their
names, will not receive or be entitled to receive physical delivery of
certificates in definitive form and will not be considered Holders of such
Preferred Security in global form.
(c) So long as the Preferred Securities are eligible for book-entry
settlement and to the extent Preferred Securities held by QIBs or Non-U.S.
Persons, as the case may be, are held in a global form, or unless otherwise
required by law, upon any transfer of a Definitive Preferred Security to a QIB
in accordance with Rule 144A or to a Non-U.S. Person in accordance with
Regulation S, unless otherwise requested by the transferor, and upon receipt of
the Definitive Preferred Security being so transferred, together with a
certification from the transferor that the transfer is being made in compliance
with Rule 144A or Regulation S, as the case may be (or other evidence
satisfactory to the Institutional Trustee on behalf of the Trust), the
Institutional Trustee on behalf of the Trust shall make an endorsement on any
144A Global Security or any Regulation S Global Security, as the case may be, to
reflect an increase in the number of Preferred Securities represented by such
Global Certificate, and the Institutional Trustee on behalf of the Trust shall
cancel such Definitive Preferred Security in accordance with the standing
instructions and procedures of the Clearing Agency, the number of Preferred
Securities represented by such Preferred Security in global form to be increased
accordingly; provided that no Definitive Preferred Security, or portion thereof,
in respect of which the Trust or an Affiliate of the Trust held any beneficial
interest shall be included in such Preferred Security in global form until such
Definitive Preferred Security is freely tradable in accordance with Rule 144(k);
provided further, that the Trust shall issue Preferred Securities in definitive
form upon any transfer of a beneficial interest in the Preferred Security in
global form to the Company or any Affiliate of the Company.
(d) Any Global Certificate may be endorsed with or have incorporated in the
text thereof such legends or recitals or changes not inconsistent with the
provisions of this
40
Declaration as may be required by the Clearing Agency, by any national
securities exchange or by the National Association of Securities Dealers, Inc.
in order for the Preferred Securities to be tradeable on the PORTAL Market or as
may be required for the Preferred Securities to be tradeable on any other market
developed for trading of securities pursuant to Rule 144A or required to comply
with any applicable law or any regulation thereunder or with the rules and
regulations of any securities exchange upon which the Preferred Securities may
be listed or traded or to conform with any usage with respect thereto, or to
indicate any special limitations or restrictions to which any particular Trust
Preferred Securities are subject.
(e) Unless and until definitive, fully registered Preferred Security
Certificates (the "Definitive Preferred Security Certificates") have been issued
to the Preferred Security Beneficial Owners of a Preferred Security in global
form pursuant to Section 8.7:
(i) the provisions of this Section 8.4 shall be in full force and
effect with respect to such Preferred Securities;
(ii) the Regular Trustees and the Institutional Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this
Declaration (including the payment of Distributions on the Global
Certificates and receiving approvals, votes or consents hereunder) as the
Holder of such Preferred Securities and the sole holder of the Global
Certificates and shall have no obligation to the Preferred Security
Beneficial Owners of such Preferred Securities;
(iii) to the extent that the provisions of this Section 8.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 8.4 shall control; and
(iv) the rights of the Preferred Security Beneficial Owners of
Preferred Securities in global form shall be exercised only through the
Clearing Agency and shall be limited to those established by law and
agreements between such Preferred Security Beneficial Owners and the
Clearing Agency and/or the Clearing Agency Participants. The Clearing
Agency will make book-entry transfers among Clearing Agency Participants
and receive and transmit payments of Distributions on the Global
Certificates to such Clearing Agency Participants. The Depositary will
make book entry transfers among the Clearing Agency Participants.
(f) Notwithstanding any other provisions of this Declaration (other than
the provisions set forth in this Section 8.4(f)), a Preferred Security in global
form may not be transferred as a whole except by the Clearing Agency to a
nominee of the Clearing Agency or by a nominee of the Clearing Agency to the
Clearing Agency or another nominee to a successor Clearing Agency or a nominee
of such successor Clearing Agency.
41
SECTION 8.5. Notices to Clearing Agency.
--------------------------
Whenever a notice or other communication to the Preferred Security Holders
is required under this Declaration, unless and until Definitive Preferred
Security Certificates shall have been issued to the Trust Preferred Security
Beneficial Owners pursuant to Section 8.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Preferred Security Beneficial Owners.
SECTION 8.6. Appointment of Successor Clearing Agency.
----------------------------------------
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities, the Regular Trustees may,
in their sole discretion, appoint a successor Clearing Agency with respect to
such Preferred Securities.
SECTION 8.7. Definitive Trust Preferred Security Certificates.
------------------------------------------------
If:
(a) a Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 8.6; or
(b) the Regular Trustees elect after consultation with the Sponsor to
terminate the book-entry system through the Clearing Agency with respect to the
Preferred Securities,
then:
(c) Definitive Preferred Security Certificates shall be prepared by the
Regular Trustees on behalf of the Trust with respect to such Preferred
Securities; and
(d) upon surrender of the Global Certificates by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall cause
Definitive Preferred Security Certificates to be delivered to Preferred Security
Beneficial Owners in accordance with the instructions of the Clearing Agency.
Neither the Trustees nor the Trust shall be liable for any delay in delivery of
such instructions and each of them may conclusively rely on and shall be
protected in relying on, said instructions of the Clearing Agency. The
Definitive Preferred Security Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof; and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation made pursuant
thereto or with any
42
rule or regulation of any stock exchange on which Preferred Securities may be
listed, or to conform to usage.
At such time as all interests in a Preferred Security in global form have
been redeemed, converted, exchanged, repurchased or canceled, such Preferred
Security in global form shall be, upon receipt thereof, canceled by the Trust in
accordance with standing procedures and instructions of the Clearing Agency.
SECTION 8.8. Mutilated Destroyed, Lost or Stolen Certificates.
------------------------------------------------
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Institutional Trustee or the Regular
Trustees such security or indemnity as may be required by them to keep each of
them harmless,
then, in the absence of notice that such Certificate shall have been
acquired by a bona fide purchaser, the Institutional Trustee or any Regular
Trustee on behalf of the Trust shall execute and deliver, in exchange for, or in
lieu of, any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like denomination. In connection with the issuance of any new
Certificate under this Section 8.8, the Institutional Trustee or the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
ARTICLE IX
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES AND OTHERS
SECTION 9.1. Liability
---------
(a) Except as expressly set forth in this Declaration, the Securities
Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; or
43
(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of the
debts and obligations of the Trust (other than with respect to the Securities)
to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the Holders of
the Preferred Securities shall be entitled to the same limitation of personal
liability as is extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
(d) Except as expressly set forth in this Declaration, each Trustee acts
solely as a trustee hereunder and not in its individual capacity, and all
Persons having any claim against a Trustee by reason of the transactions
contemplated by this Agreement shall look only to the Trust's property for
payment or satisfaction thereof.
SECTION 9.2. Exculpation
-----------
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence (or, in the
case of the Institutional Trustee, negligence) or willful misconduct with
respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Trust and upon such information, opinions, reports or
statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 9.3. Fiduciary Duty
--------------
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified
44
Person otherwise existing at law or in equity (other than the duties imposed on
the Institutional Trustee under the Trust Indenture Act), are agreed by the
parties hereto to replace such other duties and liabilities of such Indemnified
Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between an
Indemnified Person and any Covered Person or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a manner
that is, or provides terms that are, fair and reasonable to the Trust or
any Holder of Securities, the Indemnified Person shall resolve such
conflict of interest, take such action or provide such terms, considering
in each case the relative interest of each party (including its own
interest) to such conflict, agreement, transaction or situation and the
benefits and burdens relating to such interests, any customary or accepted
industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified
Person, the resolution, action or term so made, taken or provided by the
Indemnified Person shall not constitute a breach of this Declaration or any
other agreement contemplated herein or of any duty or obligation of the
Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and factors
as it desires, including its own interests, and shall have no duty or
obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 9.4. Indemnification
---------------
(a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or
45
proceeding if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Trust, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a
presumption that the Company Indemnified Person did not act in good faith
and in a manner which he reasonably believed to be in or not opposed to the
best interests of the Trust, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in its
favor by reason of the fact that he is or was a Company Indemnified Person
against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action
or suit if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Trust and except that no
such indemnification shall be made in respect of any claim, issue or matter
as to which such Company Indemnified Person shall have been adjudged to be
liable to the Trust unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such
Court of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 9.4(a), or in defense of any claim,
issue or matter therein, he shall be indemnified, to the full extent
permitted by law, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this Section
9.4(a) (unless ordered by a court) shall be made by the Debenture Issuer
only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set
forth in paragraphs (i) and (ii). Such determination shall be made (1) by
the Regular Trustees by a majority vote of a quorum consisting of such
Regular Trustees who were not parties to such action, suit or proceeding,
(2) if such a Quorum is not obtainable, or, even if obtainable, if a quorum
of disinterested Regular Trustees so directs, by independent legal counsel
in a written opinion, or (3) by the Holders of the Common Securities of the
Trust.
46
(v) Expenses (including reasonable attorneys' fees) incurred by a
Company Indemnified Person in defending a civil, criminal, administrative
or investigative action, suit or proceeding referred to in paragraphs (i)
and (ii) of this Section 9.4(a) shall be paid by the Debenture Issuer in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Company Indemnified
Person to repay such amount if it shall ultimately be determined that he is
not entitled to be indemnified by the Debenture Issuer as authorized in
this Section 9.4(a). Notwithstanding the foregoing, no advance shall be
made by the Debenture Issuer if a determination is reasonably and promptly
made (i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion or (iii) the
Holders of the Common Securities of the Trust, that, based upon the facts
known to the Regular Trustees, counsel or the Holders of the Common
Securities at the time such determination is made, such Company Indemnified
Person acted in bad faith or in a manner that such person did not believe
to be in or not opposed to the best interests of the Trust, or, with
respect to any criminal proceeding, that such Company Indemnified Person
believed or had reasonable cause to believe his conduct was unlawful. In no
event shall any advance be made in instances where the Regular Trustees,
independent legal counsel or the Holders of the Common Securities
reasonably determine that such person deliberately breached his duty to the
Trust or the Holders of the Common or Preferred Securities.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 9.4(a) shall not
be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Debenture
Issuer or Holders of the Preferred Securities of the Trust or otherwise,
both as to action in his official capacity and as to action in another
capacity while holding such office. All rights to indemnification under
this Section 9.4(a) shall be deemed to be provided by a contract between
the Debenture Issuer and each Company Indemnified Person who serves in such
capacity at any time while this Section 9.4(a) is in effect. Any repeal or
modification of this Section 9.4(a) shall not affect any rights or
obligations then existing.
(vii) The Debenture Issuer or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
Debenture Issuer would have the power to indemnify him against such
liability under the provisions of this Section 9.4(a).
(viii) For purposes of this Section 9.4(a), references to "the Trust"
shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in
a consolidation or merger, so that any person
47
who is or was a director, trustee, officer or employee of such constituent
entity, or is or was serving at the request of such constituent entity as a
director, trustee, officer, employee or agent of another entity, shall
stand in the same position under the provisions of this Section 9.4(a) with
respect to the resulting or surviving entity as he would have with respect
to such constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 9.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Sponsor agrees to indemnify the (i) Institutional Trustee, (ii) the
Delaware Trustee, (iii) any Affiliate of the Institutional Trustee and the
Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Institutional Trustee and the Delaware Trustee (each of the Persons in (i)
through (iv) being referred to as a "Fiduciary Indemnified Person") for, and to
hold each Fiduciary Indemnified Person harmless against, any and all loss,
liability or expense including taxes (other than taxes based on the income of
such Fiduciary Indemnified Person) incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or administration
or the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against or investigating
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder. The obligation to indemnify as set forth in this
Section 9.4(b) shall survive the satisfaction and discharge of this Declaration.
SECTION 9.5. Outside Businesses
------------------
Any Covered Person, the Sponsor, the Delaware Trustee and the Institutional
Trustee may engage in or possess an interest in other business ventures of any
nature or description, independently or with others, similar or dissimilar to
the business of the Trust, and the Trust and the Holders of Securities shall
have no rights by virtue of this Declaration in and to such independent ventures
or the income or profits derived therefrom, and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed wrongful
or improper. No Covered Person, the Sponsor, the Delaware Trustee, or the
Institutional Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered Person,
the Sponsor, the Delaware Trustee and the Institutional Trustee shall have the
right to take for its own account (individually or as a partner or fiduciary) or
to recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Institutional Trustee may engage or
be interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.
48
ARTICLE X
ACCOUNTING
SECTION 10.1. Fiscal Year.
-----------
The fiscal year ("Fiscal Year") of the Trust shall end on June 30, or such
other year as is required by the Code.
SECTION 10.2. Certain Accounting Matters.
--------------------------
(a) At all times during the existence of the Trust, the Regular Trustees
shall keep, or cause to be kept, full books of account, records and supporting
documents, which shall reflect in reasonable detail, each transaction of the
Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes. The books of account and the records
of the Trust shall be examined by and reported upon as of the end of each Fiscal
Year by a firm of independent certified public accountants selected by the
Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to each
of the Holders of Securities, within 90 days after the end of each Fiscal Year
of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss;
(c) The Regular Trustees shall cause to be duly prepared and delivered to
each of the Holders of Securities, any annual United States federal income tax
information statement required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall endeavor to deliver
all such statements within 30 days after the end of each Fiscal Year of the
Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed with the
appropriate taxing authority, an annual United States federal income tax return,
on a Form 1041 or such other form required by the Code, and any other annual
income tax returns required to be filed by the Regular Trustees on behalf of the
Trust with any state or local taxing authority.
SECTION 10.3. Banking.
-------
The Trust shall maintain one or more bank accounts in the name and for the
sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Institutional Trustee shall be made
directly to the Institutional Trustee Account and no other funds of the Trust
shall be deposited in the Institutional Trustee Account. The sole signatories
for
49
such accounts shall be designated by the Regular Trustees; provided, however,
that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.
SECTION 10.4. Withholding.
-----------
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed overwithholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding.
ARTICLE XI
AMENDMENTS AND MEETINGS
SECTION 11.1. Amendments.
----------
(a) Except as otherwise provided in this Declaration or by any applicable
terms of the Securities, this Declaration may only be amended by a written
instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two Regular
Trustees, a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties, obligations
or immunities of the Institutional Trustee, the Institutional Trustee; and
(iii) if the amendment affects the rights, powers, duties, obligations
or immunities of the Delaware Trustee, the Delaware Trustee.
(b) No amendment shall be made, and any such purported amendment shall be
void and ineffective:
50
(i) unless, in the case of any proposed amendment, the Institutional
Trustee shall have first received an Officers' Certificate from each of the
Trust and the Sponsor that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the Securities);
(ii) unless, in the case of any proposed amendment that affects the
rights, powers, duties, obligations or immunities of the Institutional
Trustee, the Institutional Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the Sponsor or
the Trust) that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an Investment Company that
is required to be registered under the Investment Company Act.
(c) So long as any Securities remain outstanding, any amendment that would
adversely affect the rights, privileges or preferences of any Holder of
Securities may be effected only with such additional requirements as may be set
forth in the terms of such Securities.
(d) Section 8.1(c) and this Section 11.1 shall not be amended without the
consent of all of the Holders of the Securities.
(e) Article IV and the rights of the holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove Trustees
shall not be amended without the consent of the Holders of a majority in
liquidation amount of the Common Securities.
(f) Notwithstanding Section 11.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
51
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that may
be defective or inconsistent with any other provision of this Declaration;
(iii) add to the covenants, restrictions or obligations of the Sponsor;
and
(iv) conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority, which amendment does not have a
material adverse effect on the rights, preferences or privileges of the
Holders.
SECTION 11.2 Meetings of The Holders of Securities; Action by Written Consent.
----------------------------------------------------------------
(a) Meetings of the Holders of any class of Securities may be called at any
time by the Regular Trustees (or as provided in the terms of the Securities) to
consider and act on any matter on which Holders of such class of Securities are
entitled to act under the terms of this Declaration, the terms of the Securities
or the rules of any stock exchange on which the Preferred Securities are listed
or quoted for trading. The Regular Trustees shall call a meeting of the Holders
of such class if directed to do so by the Holders of at least 10% in liquidation
amount of such class of Securities. Such direction shall be given by delivering
to the Regular Trustees one or more calls in a writing stating that the signing
Holders of Securities wish to call a meeting and indicating the general or
specific purpose for which the meeting is to be called. Any Holders of
Securities calling a meeting shall specify in writing the Certificates held by
the Holders of Securities exercising the right to call a meeting and only those
Securities so specified shall be counted for purposes of determining whether the
required percentage set forth in the second sentence of this paragraph has been
met.
(b) Except to the extent otherwise provided in the terms of the Securities,
the following provisions shall apply to meetings of Holders of Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least seven days and not more
than 60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration, such vote, consent or approval may be given at a meeting of
the Holders of Securities. Any action that may be taken at a meeting of the
Holders of Securities may be taken without a meeting if a consent in
writing setting forth the action so taken is signed by the Holders of
Securities owning not less than the minimum amount of Securities in
liquidation amount that would be necessary to authorize or take such action
at a meeting at which all Holders of Securities having a right to vote
thereon were present and voting. Prompt notice of the taking of action
without a meeting shall be given to the Holders of Securities entitled to
vote who have not consented in writing. The Regular Trustees may specify
that any written ballot
52
submitted to the Security Holders for the purpose of taking any action
without a meeting shall be returned to the Trust within the time specified
by the Regular Trustees;
(ii) each Holder of a Security may authorize any Person to act for it
by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation and
the Holders of the Securities were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be conducted
by the Regular Trustees or by such other Person that the Regular Trustees
may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of the
Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Preferred Securities are then listed or trading
provide otherwise, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any meeting
at which any matter is to be voted on by any Holders of Securities, waiver
of any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
ARTICLE XII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 12.1 Representations and Warranties of Institutional Trustee.
-------------------------------------------------------
The Trustee that acts as initial Institutional Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Institutional Trustee represents and warrants to the Trust and
the Sponsor at the time of the Successor Institutional Trustee's acceptance of
its appointment as Institutional Trustee that:
(a) The Institutional Trustee is a banking corporation with trust powers,
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization, with trust power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of, this
Declaration.
53
(b) The execution, delivery and performance by the Institutional Trustee of
the Declaration has been duly authorized by all necessary corporate action on
the part of the Institutional Trustee; and the Declaration has been duly
executed and delivered by the Institutional Trustee, and constitutes a legal,
valid and binding obligation of the Institutional Trustee, enforceable against
it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such remedies
is considered in a proceeding in equity or at law).
(c) The execution, delivery and performance of the Declaration by the
Institutional Trustee does not conflict with or constitute a breach of the
certificate of incorporation or Bylaws of the Institutional Trustee.
(d) At the Closing Date, the Institutional Trustee has not knowingly
created any liens or encumbrances on such Debentures.
(e) No consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the execution,
delivery or performance by the Institutional Trustee, of the Declaration.
(f) It satisfies the qualifications set forth in Section 5.3.
SECTION 12.2 Representations and Warranties of Delaware Trustee.
--------------------------------------------------
The Trustee that acts as initial Delaware Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration and at the time
of Closing, and each Successor Delaware Trustee represents and warrants to the
Trust and the Sponsor at the time of the Successor Delaware Trustee's acceptance
of its appointment as Delaware Trustee that:
(a) The Delaware Trustee is a duly organized, validly existing and in
good standing under the laws of the State of Delaware, with power and
authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration.
(b) The execution, delivery and performance by the Delaware Trustee of
the Declaration has been duly authorized by all necessary corporate action
on the part of the Delaware Trustee; and the Declaration has been duly
executed and delivered by the Delaware Trustee, and constitutes a legal,
valid and binding obligation of the Delaware Trustee, enforceable against
it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law).
54
(c) The execution, delivery and performance of the Declaration by the
Delaware Trustee does not conflict with or constitute a breach of the
certificate of incorporation or by-laws of the Delaware Trustee.
(d) No consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of this
Declaration.
(e) The Delaware Trustee is an entity which has its principal place of
business in the State of Delaware.
(f) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration.
(g) It satisfies the qualifications set forth in Section 5.2.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Notices.
-------
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, sent by
facsimile or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust
may give notice of to the Holders of the Securities):
Breed Technologies, Inc.
5300 Old Tampa Highway
Lakeland, Florida 33807
Tel: 941-668-6000
Telecopy: 941-668-6063
Attention: Charles J. Speranzella, Jr.
(b) if given to the Institutional Trustee, at the mailing address set
forth below (or such other address as the Institutional Trustee may give
notice of to the Holders of the Securities):
55
Wilmington Trust Company
1100 North Market Street
Rodney Square North
Wilmington, Delaware 19890
Tel: 302-651-1000
Telecopy: 302-651-8882
Attention: Corporate Trust Administration
(c) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as the Delaware Trustee may give notice of to
the Holders of the Securities):
Wilmington Trust Company
1100 North Market Street
Rodney Square North
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder
of the Common Securities may give notice to the Trust):
Breed Technologies, Inc.
5300 Old Tampa Highway
Lakeland, Florida 33807
Tel: 941-668-6000
Telecopy: 941-668-6063
Attention: Charles J. Speranzella, Jr.
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust or the Registrar, as applicable.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 13.2 Governing Law.
-------------
This Declaration and the rights of the parties hereunder shall be governed
by and interpreted in accordance with the laws of the State of Delaware and all
rights and remedies shall be governed by such laws without regard to principles
of conflict of laws.
56
SECTION 13.3 Intention of the Parties.
------------------------
It is the intention of the parties hereto that the Trust be classified for
United States federal income tax purposes as a grantor trust. The provisions of
this Declaration shall be interpreted to further this intention of the parties.
SECTION 13.4 Headings.
--------
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
SECTION 13.5 Successors and Assigns.
----------------------
Whenever in this Declaration any of the parties hereto is named or referred
to, the successors and assigns of such party shall be deemed to be included, and
all covenants and agreements in this Declaration by the Sponsor and the Trustees
shall bind and inure to the benefit of their respective successors and assigns,
whether so expressed.
SECTION 13.6 Partial Enforceability.
----------------------
If any provision of this Declaration, or the application of such provision
to any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to Persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
SECTION 13.7 Counterparts.
------------
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All 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.
57
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the date first above written.
/s/ Charles J. Speranzella, Jr.
________________________________
Charles J. Speranzella, Jr.,
as Regular Trustee
/s/ Fred J. Musone
_________________________
Fred J. Musone,
as Regular Trustee
/s/ Frank J. Gnisci
_________________________
Frank J. Gnisci,
as Regular Trustee
Wilmington Trust Company,
as Delaware Trustee
/s/ W. Chris Sponenberg
By: _________________________
Name: W. Chris Sponenberg
Title: Senior Financial Services Officer
Wilmington Trust Company,
as Institutional Trustee
/s/ W. Chris Sponenberg
By: _________________________
Name: W. Chris Sponenberg
Title: Senior Financial Services Officer
Breed Technologies, Inc.,
as Sponsor
/s/ ??^^
By: ______________________
Name:
Title:
58
TABLE OF CONTENTS
PAGE
----
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1. Definitions................................................... 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.............................. 9
SECTION 2.2. Lists of Holders of Securities................................ 9
SECTION 2.3. Reports by the Institutional Trustee.......................... 10
SECTION 2.4. Periodic Reports to Institutional Trustee..................... 10
SECTION 2.5. Evidence of Compliance with Conditions Precedent.............. 10
SECTION 2.6. Events of Default; Waiver..................................... 10
SECTION 2.7. Event of Default; Notice...................................... 12
ARTICLE III
ORGANIZATION OF TRUST
SECTION 3.1. Name.......................................................... 13
SECTION 3.2. Office........................................................ 13
SECTION 3.3. Purpose....................................................... 13
SECTION 3.4. Prohibition of Actions by the Trust and the Trustees.......... 13
SECTION 3.5. General Authority of the Trustees............................. 14
SECTION 3.6. Title to Property of the Trust................................ 14
SECTION 3.7. Not Responsible for Recitals or Issuance of Securities........ 15
3.9. Mergers....................................................... 15
SECTION 3.10. Termination and Dissolution of the Trust..................... 17
ARTICLE IV
SPONSOR
SECTION 4.1. Sponsor's Purchase of Common Securities....................... 18
SECTION 4.2. Responsibilities of the Sponsor............................... 18
ARTICLE V
TRUSTEES
SECTION 5.1. Number of Trustees............................................ 19
SECTION 5.2. Delaware Trustee; Eligibility................................. 19
SECTION 5.3. Institutional Trustee; Eligibility............................ 19
SECTION 5.4. Qualifications of Regular Trustees and Delaware Trustee
Generally................................................... 20
SECTION 5.5. Initial Trustees.............................................. 21
SECTION 5.6. Appointment, Removal and Resignation of Trustees.............. 21
SECTION 5.7. Vacancies among Trustees...................................... 23
SECTION 5.8. Merger, Conversion, Consolidation or Succession to
Business of a Trustee ...................................... 23
SECTION 5.9. Authority, Powers and Duties of the Regular Trustees.......... 23
SECTION 5.10. Delegation of Powers and Duties of the Regular Trustees...... 27
SECTION 5.11. Powers and Duties of the Institutional Trustee............... 27