Exhibit 4.2
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
MERRILL LYNCH PREFERRED CAPITAL TRUST
Dated as of ________ __, 1998
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TABLE OF CONTENTS
Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.............................................. 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application......................... 12
SECTION 2.2 Lists of Holders of Trust Securities..................... 12
SECTION 2.3 Reports by the Property Trustee.......................... 13
SECTION 2.4 Periodic Reports to Property Trustee..................... 13
SECTION 2.5 Evidence of Compliance with Conditions Precedent......... 13
SECTION 2.6 Trust Enforcement Events; Waiver......................... 13
SECTION 2.7 Trust Enforcement Event; Notice.......................... 15
ARTICLE III
ORGANIZATION
SECTION 3.1 Name..................................................... 16
SECTION 3.2 Office................................................... 16
SECTION 3.3 Purpose.................................................. 16
SECTION 3.4 Authority................................................ 16
SECTION 3.5 Title to Property of the Trust........................... 17
SECTION 3.6 Powers and Duties of the Regular Trustees................ 17
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees..... 20
SECTION 3.8 Powers and Duties of the Property Trustee................ 22
SECTION 3.9 Certain Duties and Responsibilities of the Property
Trustee.................................................. 24
SECTION 3.10 Certain Rights of Property Trustee....................... 26
SECTION 3.11 Delaware Trustee......................................... 29
SECTION 3.12 Execution of Documents................................... 29
SECTION 3.13 Not Responsible for Recitals or Issuance of Trust
Securities............................................... 29
SECTION 3.14 Duration of Trust........................................ 29
SECTION 3.15 Mergers.................................................. 29
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Page
ARTICLE IV
SPONSOR
SECTION 4.1 Responsibilities of the Sponsor.......................... 32
SECTION 4.2 Indemnification and Expenses of the Trustee.............. 32
ARTICLE V
TRUST COMMON SECURITIES HOLDER
SECTION 5.1 Company's Purchase of Trust Common Securities............ 33
SECTION 5.2 Covenants of the Trust Common Securities Holder.......... 33
ARTICLE VI
TRUSTEES
SECTION 6.1 Number of Trustees....................................... 33
SECTION 6.2 Delaware Trustee......................................... 34
SECTION 6.3 Property Trustee; Eligibility............................ 34
SECTION 6.4 Qualifications of Regular Trustees and Delaware Trustee
Generally................................................ 35
SECTION 6.5 Regular Trustees......................................... 35
SECTION 6.6 Delaware Trustee......................................... 36
SECTION 6.7 Appointment, Removal and Resignation of Trustees......... 36
SECTION 6.8 Vacancies among Trustees................................. 38
SECTION 6.9 Effect of Vacancies...................................... 38
SECTION 6.10 Meetings................................................. 38
SECTION 6.11 Delegation of Power...................................... 39
Section 6.12 Merger, Conversion, Consolidation or Succession to
Business................................................. 39
ARTICLE VII
DISTRIBUTIONS
SECTION 7.1 Distributions............................................ 40
ARTICLE VIII
ISSUANCE OF TRUST SECURITIES
SECTION 8.1 Designation and General Provisions
Regarding Trust Securities............................... 41
SECTION 8.2 Redemption of Trust Securities........................... 43
SECTION 8.3 Redemption Procedures.................................... 45
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Page
SECTION 8.4 Voting Rights of Trust Preferred Securities.............. 47
SECTION 8.5 Voting Rights of Trust Common Securities................. 50
SECTION 8.6 Paying Agent............................................. 52
SECTION 8.7 Listing.................................................. 53
SECTION 8.8 Acceptance of Guarantee and Agreements, Limited
Partnership Agreement.................................... 53
ARTICLE IX
TERMINATION AND LIQUIDATION OF THE TRUST
SECTION 9.1 Termination of Trust..................................... 53
SECTION 9.2 Liquidation Distribution Upon Termination and
Dissolution of the Trust................................. 54
ARTICLE X
TRANSFER OF INTERESTS
SECTION 10.1 Transfer of Trust Securities............................. 56
SECTION 10.2 Transfer of Certificates................................. 56
SECTION 10.3 Deemed Security Holders.................................. 56
SECTION 10.4 Book Entry Interests..................................... 57
SECTION 10.5 Notices to Clearing Agency............................... 58
SECTION 10.6 Appointment of Successor Clearing Agency................. 58
SECTION 10.7 Definitive Trust Preferred Security Certificates......... 58
SECTION 10.8 Mutilated, Destroyed, Lost or Stolen Certificates........ 59
ARTICLE XI
LIMITATION OF LIABILITY OF
HOLDERS OF TRUST SECURITIES, TRUSTEES OR OTHERS
SECTION 11.1 Liability................................................ 60
SECTION 11.2 Exculpation.............................................. 60
SECTION 11.3 Fiduciary Duty........................................... 61
SECTION 11.4 Indemnification.......................................... 62
SECTION 11.5 Outside Businesses....................................... 65
ARTICLE XII
ACCOUNTING
SECTION 12.1 Fiscal Year.............................................. 66
SECTION 12.2 Certain Accounting Matters............................... 66
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Page
SECTION 12.3 Banking.................................................. 67
SECTION 12.4 Withholding.............................................. 67
ARTICLE XIII
AMENDMENTS AND MEETINGS
SECTION 13.1 Amendments............................................... 68
SECTION 13.2 Meetings of the Holders of Trust Securities; Action by
Written Consent....................................... 71
ARTICLE XIV
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 14.1 Representations and Warranties of Property Trustee....... 73
SECTION 14.2 Representations and Warranties of Delaware Trustee....... 74
ARTICLE XV
MISCELLANEOUS
SECTION 15.1 Notices.................................................. 75
SECTION 15.2 Governing Law............................................ 76
SECTION 15.3 Intention of the Parties................................. 76
SECTION 15.4 Headings................................................. 76
SECTION 15.5 Successors and Assigns................................... 76
SECTION 15.6 Partial Enforceability................................... 76
SECTION 15.7 Counterparts............................................. 77
EXHIBIT A-1 FORM OF PREFERRED SECURITY CERTIFICATE..................A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE.....................A2-1
EXHIBIT B PURCHASE AGREEMENT.......................................B-1
iv
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
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310(a) . . . . . . . . . . . . . . . . . . . . . . . . . 6.3(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) . . . . . . . . . . . . . . . . . . . . . . . . . 3.9(b)
315(c) . . . . . . . . . . . . . . . . . . . . . . . . . 3.9(a)
315(d) . . . . . . . . . . . . . . . . . . . . . . . . . 3.9(a)
316(a) . . . . . . . . . . . . . . . . . . . . . . . . . Annex I
316(c) . . . . . . . . . . . . . . . . . . . . . . . . . 3.6(e)
_________________
* 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
MERRILL LYNCH PREFERRED CAPITAL TRUST
, 1998
AMENDED AND RESTATED DECLARATION OF TRUST (the "Declaration") dated and
effective as of , 1998, by the Trustees (as defined herein), by the
Sponsor (as defined herein) and by the Holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, certain of the Trustees and the Sponsor established MERRILL LYNCH
PREFERRED CAPITAL TRUST (the "Business Trust"), a trust under the Delaware
Business Trust Act (the "Trust Act"), pursuant to a Declaration of Trust dated
as of December 19, 1997 (the "Original Declaration") and a Certificate of Trust
filed with the Secretary of State of the State of Delaware on December 19, 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 the Partnership Preferred Securities;
WHEREAS, as of the date hereof, no interests in the Trust have been issued;
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 ownership 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;
(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 of 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 term used in this Agreement and not otherwise defined herein shall
have the meaning ascribed to such term in the Partnership Agreement.
"Affiliate" has the same meaning as given to that term in Rule 405 under the
Securities Act of 1933, as amended, or any successor rule thereunder.
"Affiliate Investment Instruments" has the meaning set forth in Section 7.1
of the Limited Partnership Agreement.
"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 set forth in Section 10.4 of this Declaration.
2
"Business Day" means any day other than a day on which banking institutions
in The City of New York 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.
"Certificate" means a Trust Common Security Certificate or a Trust Preferred
Security Certificate.
"Change in 1940 Act Law" means, as a result of the occurrence on or after
the date of the issuance of the Trust Preferred Securities of a change in law or
regulation or a change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority, the
Trust is or will be considered an "investment company" which is required to be
registered under the 1940 Act.
"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
Trust Preferred Securities and in whose name or in the name of a nominee of that
organization shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of beneficial interests in the Trust
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 interest in securities deposited
with the Clearing Agency.
"Closing Date" means , 1998.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Commission" means the United States Securities and Exchange Commission.
"Common Security Holder of the Trust" means the Company in its capacity as
Holder of the Trust Common Security.
"Company" means Merrill Lynch & Co., Inc.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees,
3
representatives or agents of any Regular Trustee; or (d) any officer,
director, shareholder, member, partner, employee, representative or agent of
the Trust or its Affiliates.
"Compounded Distributions" has the meaning set forth in Section 7.1(a) of
this Declaration.
"Corporate Trust Office" means the principal corporate trust office of the
Property Trustee in the Borough of Manhattan, the City of New York, which office
at the date hereof is called the Global Trust Services Office and is located at
450 West 33rd Street, 15th Floor, New York, New York 10001.
"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 Trust Securities.
"Definitive Trust Preferred Security Certificates" has the meaning set forth
in Section 10.4 of this Declaration.
"Delaware Trustee" has the meaning set forth in Section 6.2 of this
Declaration.
"Distribution" has the meaning set forth in Section 7.1(a) of this
Declaration.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section 11.4(b)
of this Declaration.
"Fiscal Period" has the meaning set forth in Section 1.1 of the Limited
Partnership Agreement.
"Fiscal Year" has the meaning set forth in Section 12.1 of this Declaration.
"General Partner" means Merrill Lynch & Co., Inc., in its capacity as the
general partner of the Partnership, its permitted successors, or any successor
general partner in the Partnership admitted as such pursuant to the Limited
Partnership Agreement.
4
"Global Certificate" has the meaning set forth in Section 10.4 of this
Declaration.
"Holder" means a Person in whose name a Certificate representing a Trust
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.
"Initial Debentures" has the meaning set forth in Section 7.1(b) of the
Limited Partnership Agreement.
"Investment Affiliate" means the Company or any corporation, partnership,
limited liability company or other entity (other than the Partnership or the
Trust) that (i) is controlled by the Company and (ii) is not an investment
company by reason of Section 3(a) or 3(b) of the 1940 Act or is otherwise an
eligible recipient of funds directly or indirectly from the Trust pursuant to an
order issued by the Securities and Exchange Commission.
"Investment Company" means an investment company as defined in the 1940 Act.
"Investment Guarantee" means any guarantee on a subordinated basis by the
Company with respect to (1) payment of interest, principal and other payment
terms of Affiliate Investment Instruments that are debt securities of an
Investment Affiliate and (2) the payment of dividends, distributions and other
payment terms of Affiliate Investment Instruments that are preferred or
preference stock of an Investment Affiliate when, as and if declared by such
Investment Affiliate.
"Legal Action" has the meaning set forth in Section 3.6(h) of this
Declaration.
"Limited Partnership Agreement" means the Amended and Restated Agreement of
Limited Partnership of Merrill Lynch Preferred Funding , L.P. dated as of
, 1998.
"List of Holders" has the meaning set forth in Section 2.2(a) of this
Declaration.
"Majority in liquidation amount of the Trust Securities" means, except as
provided in the terms of the Trust Preferred Securities or by the Trust
Indenture Act, Holder(s) of outstanding Trust Securities voting together as a
single class or, as the context may require, Holders of outstanding Trust
Preferred Securities or Holders of outstanding Trust Common
5
Securities voting separately as a class, who are the record owners of more
than 50% of the aggregate liquidation amount of all outstanding Trust
Securities of the relevant class.
"Ministerial Action" means, a ministerial action (such as filing a form or
making an election or pursuing some other similar reasonable measure) which in
the sole judgment of the Company has or will cause no adverse effect on the
Trust, the Partnership, the Company or the holders of the Trust Securities and
will involve no material cost.
"Nasdaq" means the National Association of Securities Dealers Automated
Quotation System.
"1940 Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Officers' Certificate" means, with respect to any Person (who is not an
individual), a certificate signed by the Chairman of the Board, the President, a
Vice President or the Treasurer, and by an Assistant Treasurer, the Secretary or
an Assistant Secretary of such Person. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Partnership" means Merrill Lynch Preferred Funding , L.P., a Delaware
limited partnership formed pursuant to the Limited Partnership Agreement.
"Partnership Enforcement Event" has the meaning set forth in Section
6.2(h)(i) of the Limited Partnership Agreement.
6
"Partnership Guarantee" means the Partnership Guarantee Agreement dated as
of , 1998, by the Company in favor of the Partnership Preferred
Security Holders with respect to the Partnership Preferred Securities, as
amended or supplemented from time to time.
"Partnership Preferred Securities" has the meaning set forth in Section 1.1
of the Limited Partnership Agreement.
"Partnership Special Event" has the meaning set forth in Section 1.1 of the
Limited Partnership Agreement.
"Payment Amount" has the meaning set forth in Section 7.1(a) of this
Declaration.
"Paying Agent" has the meaning set forth in Section 3.8(g) of this
Declaration.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, or each case in accordance with the
rules of such Clearing Agency).
"Property Account" has the meaning set forth in Section 3.8(c) of this
Declaration.
"Property Trustee" means the Trustee meeting the eligibility requirements
set forth in Section 6.3 of this Declaration.
"Pro Rata" means, in reference to any distributions on or redemptions of
Trust Securities or the distribution of Partnership Preferred Securities or any
other payment with respect to Trust Securities in connection with a Trust
Special Event or liquidation of the Trust, pro rata to each Holder of Trust
Securities according to the aggregate liquidation amount of the Trust Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Trust Securities outstanding.
7
"Quorum" means a majority of the Regular Trustees or, if there are only two
Regular Trustees, both of them.
"Redemption Price" has the meaning set forth in Section 8.2(a) of this
Declaration.
"Regular Trustee" has the meaning set forth in Section 6.1 of this
Declaration.
"Related Party" means, with respect to the Sponsor, any direct or indirect
wholly owned subsidiary of the Sponsor or any Person that owns, directly or
indirectly, 100% of the outstanding voting securities of the Sponsor.
"Responsible Officer" means, with respect to the Trust Preferred Guarantee
Trustee, the chairman or vice-chairman of the board of directors, the chairman
or vice-chairman of the executive committee of the board of directors, the
president, any vice president (whether or not designated by a number or a word
or words added before or after the title "vice president"), the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, or any other
officer of the Trust Preferred Guarantee 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 his knowledge of and
familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the 1940 Act.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, or any successor legislation.
"Special Representative" has the meaning set forth in Section 6.2(h)(i) of
the Limited Partnership Agreement.
"Sponsor" means the Company or any successor entity in a merger,
consolidation or amalgamation, in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section 6.7(b) of
this Declaration.
"Successor Entity" has the meaning set forth in Section 3.15 of this
Declaration.
"Successor Property Trustee" has the meaning set forth in Section 6.7(b) of
this Declaration.
8
"Successor Trust Securities" has the meaning set forth in Section 3.15 of
this Declaration.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii) of this
Declaration.
"Tax Action" means (a) an amendment to, change in or announced proposed
change in the laws (or any regulations thereunder) of the United States or
any political subdivision or taxing authority thereof or therein, (b) a
judicial decision interpreting, applying or clarifying such laws or
regulations, (c) an administrative pronouncement or action that represents an
official position (including a clarification of an official position) of the
governmental authority or regulatory body making such administrative
pronouncement or taking such action, or (d) a threatened challenge asserted
in connection with an audit of the Company or any of its subsidiaries, the
Partnership, or the Trust, or a threatened challenge asserted in writing
against any other taxpayer that has raised capital through the issuance of
securities that are substantially similar to the Debentures, the Partnership
Preferred Securities, or the Trust Preferred Securities, which amendment or
change is adopted or which decision, pronouncement or proposed change is
announced or which action, clarification or challenge occurs on or after the
date of the prospectus related to the issuance of the Trust Preferred
Securities.
"10% in liquidation amount of the Trust Securities" means, except as
provided in the terms of the Trust Preferred Securities or by the Trust
Indenture Act, Holder(s) of outstanding Trust Securities voting together as a
single class or, as the context may require, Holders of outstanding Trust
Preferred Securities or Holders of outstanding Trust Common Securities voting
separately as a class, who are the record owners of 10% or more of the
aggregate liquidation amount of all outstanding Trust Securities of the
relevant class.
"Treasury Regulations" means the income tax regulations, including temporary
and proposed regulations, promulgated under the Code by the United States
Treasury Department, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trust Common Security" has the meaning set forth in Section 8.1 of this
Declaration.
"Trust Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Exhibit A-2.
9
"Trust Common Securities Guarantee" means the Trust Common Securities
Guarantee Agreement dated as of , 1998, entered into by the Company,
as Guarantor, for the benefit of the holders of the Trust Common Securities.
"Trust Dissolution Tax Opinion" means an opinion of nationally recognized
independent tax counsel experienced in such matters to the effect that there has
been a Trust Tax Event.
"Trust Enforcement Event" means the occurrence, at any time, of (i)
arrearages on distributions on the Trust Preferred Securities that shall exist
for six consecutive quarterly distribution periods, (ii) a default by the
Company in respect of any of its obligations under the Trust Guarantee or (iii)
a Partnership Enforcement Event (as defined in the Limited Partnership
Agreement).
"Trust Guarantees" means the Trust Common Securities Guarantee and The Trust
Preferred Securities Guarantee, collectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended from
time to time, or any successor legislation.
"Trust Investment Company Event" means that the Company shall have requested
and received and shall have delivered to the Regular Trustees an opinion of
nationally recognized independent legal counsel experienced in such matters to
the effect that as a result of a Change in 1940 Act Law, the Trust is or will be
considered an "investment company" which is required to be registered under the
1940 Act.
"Trust Liquidation" has the meaning set forth in Section 9.2(a) of this
Declaration.
"Trust Preferred Securities Guarantee" has the meaning set forth in
Section 1.1 of the Limited Partnership Agreement.
"Trust Liquidation Distribution" has the meaning set forth in Section 9.2(a)
of this Declaration.
"Trust Preferred Security" has the meaning set forth in Section 8.1(a) of
this Declaration.
"Trust Preferred Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency
10
Participant or as an indirect participant, in each case in accordance with
the rules of such Clearing Agency).
"Trust Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Exhibit A-1.
"Trust Redemption Tax Opinion" means an opinion of nationally recognized
independent tax counsel experienced in such matters that there has been a Trust
Tax Event, and following such Trust Tax Event there is more than an
insubstantial risk that interest payable by one or more of the Investment
Affiliates with respect to the Debentures is not, or will not be, deductible by
such Investment Affiliate for United States federal income tax purposes even if
the Partnership Preferred Securities were distributed to the Holders of the
Trust Securities in liquidation of such Holders' interests in the Trust.
"Trust Securities" means the Trust Common Securities and the Trust Preferred
Securities.
"Trust Special Event" means a Trust Tax Event or a Trust Investment Company
Event.
"Trust Tax Event" means that there has been a Tax Action which relates to
any of the items described in (i) through (iii) below, and that there is more
than an insubstantial risk that (i) the Trust is, or will be subject to United
States federal income tax with respect to income accrued or received on the
Partnership Preferred Securities, (ii) the Trust is, or will be, subject to more
than a DE MINIMIS amount of other taxes, duties or other governmental charges or
(iii) interest payable by one or more of the Investment Affiliates with respect
to the Debentures is not, or will not be, deductible by such Investment
Affiliate for United States federal income tax purposes.
"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.
11
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to the extent
applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a Trustee for
the purposes of the Trust Indenture Act.
(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 Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Trust Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Property Trustee (i) within 14 days after each record date
for payment of Distributions, a list, in such form as the Property Trustee
may reasonably require, of the names and addresses of the Holders of the
Trust 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 Property
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 Property Trustee. The Property Trustee shall
preserve, in as current a form as is reasonably practicable, all information
contained in Lists of Holders given to it or which it receives in the
capacity as Paying Agent (if acting in such capacity), provided, that the
Property Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under Sections
311(a), 311(b) and 312(b) of the Trust Indenture Act.
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SECTION 2.3 Reports by the Property Trustee.
Within 60 days after of each year commencing , , the
Property Trustee shall provide to the Holders of the Trust Preferred
Securities such reports as are required by Section 313 of the Trust Indenture
Act, if any, in the form and in the manner provided by Section 313 of the
Trust Indenture Act. The Property Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Property Trustee such documents, reports and information as
are required by Section 314 of the Trust Indenture Act (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in
the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Property Trustee such evidence of compliance with any
conditions precedent provided for in this Declaration that relate to any of
the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Trust Enforcement Events; Waiver.
(a) The Holders of a Majority in liquidation amount of Trust Preferred
Securities may, by vote, on behalf of the Holders of all of the Trust
Preferred Securities, waive any past Trust Enforcement Event in respect of
the Trust Preferred Securities and its consequences, provided, that if the
underlying event of default or Partnership Enforcement Event:
(i) is not waivable under the Trust Preferred Securities Guarantee or
the Limited Partnership Agreement, the Trust Enforcement Event under this
Declaration shall also not be waivable; or
(ii) requires the consent or vote of the Holders of greater than a
Majority in liquidation amount of the Trust Preferred Securities to be
waived under the Trust Preferred
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Securities Guarantee or the Partnership Preferred Securities to be waived
under the Limited Partnership Agreement (a "Super Majority"),
the Trust Enforcement Event under this Declaration may only be waived by the
vote of the Holders of at least the relevant Super Majority in liquidation
amount of the Trust Preferred Securities.
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 Trust Securities, as permitted by the Trust Indenture Act. Upon such
waiver, any such default shall cease to exist, and any Trust Enforcement
Event with respect to the Trust 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 Trust
Enforcement Event with respect to the Trust Preferred Securities or impair
any right consequent thereon. Any waiver by the Holders of the Trust
Preferred Securities of Trust Enforcement Events with respect to the Trust
Preferred Securities shall also be deemed to constitute a waiver by the
Holders of the Trust Common Securities of any such Trust Enforcement Event
with respect to the Trust Common Securities for all purposes of this
Declaration without any further act, vote, or consent of the Holders of the
Trust Common Securities.
(b) The Holders of a Majority in liquidation amount of the Trust Common
Securities may, by vote, on behalf of the Holders of all of the Trust Common
Securities, waive any past Trust Enforcement Event with respect to the Trust
Common Securities and its consequences, provided, that if the underlying
event of default or Partnership Enforcement Event:
(i) is not waivable under the Trust Common Securities Guarantee or the
Limited Partnership Agreement, except where the Holders of the Trust Common
Securities are deemed to have waived such Trust Enforcement Event under this
Declaration as provided below in this Section 2.6(b), the Trust Enforcement
Event under this Declaration shall also not be waivable; or
(ii) requires the consent or vote of the Holders of a Super Majority to
be waived, except where the Holders of the Trust Common Securities are
deemed to have waived such Trust Enforcement Event under the Declaration as
provided below in this Section 2.6(b), the Trust Enforcement Event under
this Declaration may only be waived by the vote of the
14
Holders of at least the relevant Super Majority in liquidation amount
of the Trust Common Securities;
provided, further, each Holder of Trust Common Securities will be deemed to
have waived any such Trust Enforcement Event and all Trust Enforcement Events
with respect to the Trust Common Securities and its consequences if all Trust
Enforcement Events with respect to the Trust Preferred Securities have been
cured, waived or otherwise eliminated, and until such Trust Enforcement
Events have been so cured, waived or otherwise eliminated, the Property
Trustee will be deemed to be acting solely on behalf of the Holders of the
Trust Preferred Securities and only the Holders of the Trust Preferred
Securities will have the right to direct the Property Trustee in accordance
with the terms of the Trust 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 Trust 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 Trust Enforcement Event with respect to
the Trust 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 Trust Enforcement Event with respect to
the Trust Common Securities or impair any right consequent thereon.
(c) A waiver of Partnership Enforcement Events under the Limited
Partnership Agreement by the Property Trustee at the direction of the Holders
of the Trust Preferred Securities constitutes a waiver of the corresponding
Trust Enforcement Event 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 Trust Securities, as
permitted by the Trust Indenture Act.
SECTION 2.7 Trust Enforcement Event; Notice.
The Property Trustee shall, within 90 days after the occurrence of a
Trust Enforcement Event, transmit by mail, first class postage prepaid, to
the Holders of the Trust Securities, notices of all defaults with respect to
the Trust Securities actually known to a Responsible Officer of the Property
Trustee, unless such defaults have been cured before the giving of such
notice (the term "defaults" for the purposes of this Section 2.7 being hereby
defined to be defaults as defined in the Trust Guarantees or the Limited
Partnership Agreement, not including
15
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
Affiliate Investment Instruments or in the payment of any sinking fund
installment established for the Affiliate Investment Instruments, the
Property Trustee shall be fully protected in withholding such notice if and
so long as a Responsible Officer of the Property Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Trust Securities.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "Merrill Lynch Preferred Capital Trust ," as such name
may be modified from time to time by the Regular Trustees following written
notice to the Holders of Trust 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 Merrill Lynch &
Co., Inc., World Financial Center, North Tower, 250 Vesey Street, New York,
New York 10281. On ten Business Days written notice to the Holders of Trust
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 the
Trust Securities, (b) investing the proceeds from such sale of the Trust
Securities to acquire the Partnership Preferred Securities, and (c) except as
otherwise limited herein, to engage in only those other activities necessary
or incidental thereto. The Trust shall not borrow money, issue debt or
reinvest proceeds derived from investments, mortgage or 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 Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Regular
16
Trustees shall have exclusive and complete authority to carry out the
purposes of theTrust. 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 Property Trustee on behalf of the Trust in accordance
with its powers shall constitute the act of and serve to bind the Trust. In
dealing with the Trustees acting on behalf of the Trust, no person shall be
required to inquire into the authority of the Trustees to bind the 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 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Partnership
Preferred Securities and the Property Account or as otherwise provided in
this Declaration, legal title to all assets of the Trust shall be vested in
the Trust. The Holders shall not have legal title to any part of the assets
of the Trust, but shall have an undivided beneficial ownership interest in
the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and authority
to cause the Trust to engage in the following activities:
(a) to issue and sell the Trust Preferred Securities and the Trust
Common Securities in accordance with this Declaration; provided, however,
that the Trust may issue no more than one series of Trust Preferred
Securities and no more than one series of Trust Common Securities, and,
provided, further, that there shall be no interests in the Trust other
than the Trust Securities, and the issuance of Trust Securities shall be
limited to a one-time, simultaneous issuance of both Trust Preferred
Securities and Trust Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Trust Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission the registration
statement on Form S-3 prepared by the Sponsor, including any
amendments thereto, pertaining to the Trust Preferred Securities;
-17-
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor to be necessary in order
to qualify or register all or part of the Trust Preferred Securities
in any State in which the Sponsor has determined to qualify or
register such Trust Preferred Securities for sale;
(iii) execute and file an application, prepared by the Sponsor,
to the New York Stock Exchange, Inc. or any other national stock
exchange or the Nasdaq National Market System for listing upon
notice of issuance of any Trust Preferred Securities;
(iv) execute and file with the Commission a registration
statement, including any amendments thereto, prepared by the
Sponsor, relating to the registration of the Trust Preferred
Securities, the Partnership Preferred Securities, the Trust
Preferred Securities Guarantee and the Partnership Guarantee under
Section 12(b) of the Exchange Act; and
(v) execute and enter into an underwriting agreement providing
for the sale of the Trust Preferred Securities and perform the
duties and obligations of the Trust thereunder;
(c) to acquire the Partnership Preferred Securities with the proceeds
of the sale of the Trust Preferred Securities and the Trust Common
Securities; provided, however, that the Regular Trustees shall cause
legal title to the Partnership Preferred Securities to be held of record
in the name of the Property Trustee for the benefit of the Holders of the
Trust Preferred Securities and the Holders of Trust Common Securities;
(d) to give the Sponsor and the Property Trustee prompt written notice
of the occurrence of a Trust Special Event; provided, that the Regular
Trustees shall consult with the Sponsor and the Property Trustee before
taking or refraining from taking any Ministerial Action in relation to a
Trust Special Event;
(e) 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 Trust Preferred Securities
18
and Holders of Trust Common Securities as to such actions and applicable
record dates;
(f) to give prompt written notice to the Holders of the Trust
Securities of any notice received from the Partnership of the General
Partner's election not to make a current, quarterly distribution on the
Partnership Preferred Securities under the Limited Partnership Agreement;
(g) to take all actions and perform such duties as may be required
of the Regular Trustees pursuant to the terms of the Trust Securities;
(h) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(f), the Property
Trustee has the exclusive power to bring such Legal Action;
(i) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors,
and consultants and pay reasonable compensation for such services;
(j) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(k) to give the certificate required by Section 314(a)(4) of the
Trust Indenture Act to the Property Trustee, which certificate may be
executed by any Regular Trustee;
(l) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(m) to act as, or appoint another Person to act as, registrar and
transfer agent for the Trust Securities;
(n) 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;
(o) 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
19
Holders of the Trust Preferred Securities or to enable the Trust to
effect the purposes for which the Trust was created;
(p) to take any action, or to take no 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 3.6,
including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the 1940 Act; and
(ii) taking no action which would be reasonably likely to cause
the Trust to be classified as an association or a publicly traded
partnership taxable as a corporation for United States federal
income tax purposes;
provided, that such action does not adversely affect the interests of
Holders; and
(q) 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.
The Regular Trustees must exercise the powers set forth in this Section
3.6 in a manner that is consistent with the purposes and functions of the
Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of the
powers or the authority of the Property Trustee set forth in Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this Section 3.6
shall be reimbursed by the Partnership pursuant to Section 9.1 of the Limited
Partnership Agreement.
20
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the Property
Trustee) shall cause the Trust not to, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust shall
not and the Trustees (including the Property Trustee) shall cause the Trust
not to:
(i) invest any proceeds received by the Trust from holding the
Partnership Preferred Securities, but shall distribute all such proceeds to
Holders of Trust Securities pursuant to the terms of this Declaration and of
the Trust Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness or acquire any securities
other than the Partnership Preferred Securities;
(v) possess any power or otherwise act in such a way as to vary the Trust
assets or the terms of the Trust Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership of,
or beneficial interest in, the Trust other than the Trust Securities;
(vii) other than as set forth herein, (A) cause the Special
Representative to direct the time, method and place of conducting any
proceeding for any remedy available to the Special Representative or
exercising any trust or power conferred upon the Special Representative with
respect to the Partnership Preferred Securities, the Affiliate Investment
Instruments, and the Investment Guarantees, (B) cause the Special
Representative to waive any past default that is waivable under the Limited
Partnership Agreement, the Affiliate Investment Instruments or the Investment
Guarantees, (C) cause the Special Representative to exercise any right to
rescind or annul any declaration that the principal of, or other amounts in
respect of, any Affiliate Investment Instrument is due and payable or (D)
consent to any amendment, modification or termination of the Limited
Partnership
21
Agreement or the Partnership Preferred Securities where such consent shall be
required; and
(viii) other than in connection with the liquidation of the Trust
pursuant to a Trust Special Event or upon redemption of all the Trust
Securities, file a certificate of cancellation of the Trust.
SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Partnership Preferred Securities shall be
owned by and held of record in the name of the Property Trustee in trust for
the benefit of the Holders of the Trust Securities. The right, title and
interest of the Property Trustee to the Partnership Preferred Securities
shall vest automatically in each Person who may hereafter be appointed as
Property Trustee in accordance with Section 6.7. Such vesting and cessation
of title shall be effective whether or not conveyancing documents with regard
to the Partnership Preferred Securities have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and interest
in the Partnership Preferred Securities to the Regular Trustees or to the
Delaware Trustee (if the Property Trustee does not also act as Delaware
Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Property Account") in the name of and under the exclusive
control of the Property Trustee on behalf of the Holders of the Trust
Securities and, upon the receipt of payments of funds made in respect of
the Partnership Preferred Securities held by the Property Trustee, deposit
such funds into the Property Account and make payments to the Holders of
the Trust Preferred Securities and Holders of the Trust Common Securities
from the Property Account in accordance with Section 7.1. Funds in the
Property Account shall be held uninvested until disbursed in accordance
with this Declaration. The Property Account shall be an account that is
maintained with a banking institution (including the Property Trustee if it
qualifies hereunder) authorized to exercise corporate trust powers and
having a combined capital and surplus of at least $50,000,000 and subject
to supervision or examination by Federal or state authority;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the
22
Trust Preferred Securities and the Trust Common Securities to the extent the
Partnership Preferred Securities are redeemed; and
(iii) upon written notice of distribution issued by the Regular Trustees
in accordance with the terms of the Trust Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
distribution of the Partnership Preferred Securities to Holders of Trust
Securities upon the occurrence of a Trust Special Event.
(d) The Property Trustee shall take all actions and perform such duties
as may be specifically required of the Property Trustee pursuant to the terms
of the Trust Securities.
(e) The Property Trustee shall take any Legal Action which arises out of
or in connection with a Trust Enforcement Event of which a Responsible
Officer of the Property Trustee has actual knowledge or the Property
Trustee's duties and obligations under this Declaration or the Trust
Indenture Act.
(f) The Property Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a Holder of Partnership Preferred
Securities and, if a Trust Enforcement Event occurs and is continuing, the
Property Trustee shall, for the benefit of Holders of the Trust Securities,
enforce its rights as Holder of the Partnership Preferred Securities subject
to the rights of the Holders pursuant to the terms of such Trust Securities.
(g) The Property 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 Trust 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 Property Trustee at any time and
a successor Paying Agent or additional Paying Agents may be appointed at any
time by the Property Trustee.
(h) The Property 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 Trust Securities pursuant to the
terms of the Trust Securities; or
23
(ii) a Successor Property Trustee has been appointed and has accepted
that appointment in accordance with Section 6.7.
(i) Subject to this Section 3.8, the Property Trustee shall have none of
the duties, liabilities, powers or the authority of the Regular Trustees set
forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this Section
3.8 in a manner that is consistent with the purposes and functions of the
Trust set out in Section 3.3, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee.
(a) The Property Trustee, before the occurrence of any Trust Enforcement
Event and after the curing or waiver of all Trust Enforcement Events that may
have occurred, shall undertake to perform only such duties as are
specifically set forth in this Declaration and no implied covenants shall be
read into this Declaration against the Property Trustee. In case a Trust
Enforcement Event has occurred (that has not been cured or waived pursuant to
Section 2.6) of which a Responsible Officer of the Property Trustee has
actual knowledge, the Property Trustee shall exercise such of the rights and
powers vested in it by this Declaration, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of a Trust Enforcement Event and after the
curing or waiving of all such Trust Enforcement Events that may have
occurred:
(A) the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this Declaration and the
Property Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Declaration,
and no implied covenants or obligations shall be read into this
Declaration against the Property Trustee; and
24
(B) in the absence of bad faith on the part of the Property Trustee,
the Property Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Property Trustee and
conforming to the requirements of this Declaration; but in the case of
any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Property Trustee, the
Property Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Property Trustee, unless
it shall be proved that the Property Trustee was negligent in ascertaining
the pertinent facts;
(iii) subject to the requirement of the Property Trustee receiving a tax
opinion as set forth in Section 8.4(d) or 8.5(c), as the case may be, the
Property Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of
the Holders of not less than a Majority in liquidation amount of the Trust
Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or exercising
any trust or power conferred upon the Property Trustee under this
Declaration;
(iv) no provision of this Declaration shall require the Property Trustee
to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that the repayment of such funds or protection from such liability is not
reasonably assured to it under the terms of this Declaration or indemnity
reasonably satisfactory to the Property Trustee against such risk or
liability is not reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the custody, safe
keeping and physical preservation of the Partnership Preferred Securities
and the Property Account shall be to deal with such property in a similar
manner as the Property Trustee deals with similar property for its own
account, subject to the protections and limita-
25
tions on liability afforded to the Property Trustee under this Declaration
and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability for or with
respect to the value, genuineness, existence or sufficiency of the
Partnership Preferred Securities or the payment of any taxes or assessments
levied thereon or in connection therewith;
(vii) money held by the Property Trustee need not be segregated from
other funds held by it except in relation to the Property Account
maintained by the Property Trustee pursuant to Section 3.8(c)(i) and except
to the extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible for monitoring the
compliance by the Regular Trustees or the Sponsor with their respective
duties under this Declaration, nor shall the Property Trustee be liable for
any default or misconduct of the Regular Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees acting
on behalf of the Trust contemplated by this Declaration shall be
sufficiently evidenced by an Officers' Certificate;
(iii) whenever in the administration of this Declaration, the Property
Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the Property
Trustee (unless other evidence is herein specifically prescribed) may, in
the absence of bad faith on its part, request and conclusively rely upon an
Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Regular Trustees;
26
(iv) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel 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 Property
Trustee shall have the right at any time to seek instructions concerning
the administration of this Declaration from any court of competent
jurisdiction;
(vi) the Property Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Declaration at the request or
direction of any Holder, unless (a) such Holder shall have provided to the
Property Trustee security and indemnity, reasonably satisfactory to the
Property Trustee, against the costs, expenses (including attorneys' fees
and expenses and the expenses of the Property Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances as may be
requested by the Property Trustee and (b) the Property Trustee has obtained
the legal opinions, if any, required by Section 8.4(d) or 8.5(c), as the
case may be, of this Agreement; provided, that, nothing contained in this
Section 3.10(a)(vi) shall be taken to relieve the Property Trustee, upon
the occurrence of a Trust Enforcement Event, of its obligation to exercise
the rights and powers vested in it by this Declaration;
(vii) the Property Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Property Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see
fit;
(viii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder
27
either directly or by or through agents, custodians, nominees or attorneys
and the Property Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care
by it hereunder;
(ix) any action taken by the Property Trustee or its agents hereunder
shall bind the Trust and the Holders of the Trust Securities, and the
signature of the Property Trustee or its agents alone shall be sufficient
and effective to perform any such action and no third party shall be
required to inquire as to the authority of the Property Trustee to so act
or as to its compliance with any of the terms and provisions of this
Declaration, both of which shall be conclusively evidenced by the Property
Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the
Property Trustee (i) may request instructions from the Holders of the Trust
Securities which instructions may only be given by the Holders of the same
proportion in liquidation amount of the Trust Securities as would be
entitled to direct the Property Trustee under the terms of the Trust
Securities in respect of such remedy, right or action, (ii) may refrain
from enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be fully protected in
conclusively relying on or acting in or accordance with such instructions;
provided, however, that the Property Trustee shall not be required to take
any action unless it shall have obtained such legal opinions, if any,
required by Sections 8.4(d) or 8.5(c), as the case may be, of this
Agreement; and
(xi) except as otherwise expressly provided by this Declaration, the
Property Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose any duty
or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it,
in any jurisdiction in which it shall be illegal, or in which the Property
Trustee shall be unqualified or incompetent in accordance with applicable
law, to perform any such act or acts, or to exercise any such right, power,
duty or obligation. No permissive power or authority
28
available to the Property Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any provision of this Declaration other than Section 6.2,
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 Property Trustee described in this Declaration.
Except as set forth in Section 6.2, the Delaware Trustee shall be a Trustee
for the sole and limited purpose of fulfilling the requirements of Section
3807 of the Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, any Regular Trustee is
authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to cause the Trust to execute pursuant
to Section 3.6; provided, that the registration statement referred to in
Section 3.6(b)(i), including any amendments thereto, shall be signed by or on
behalf of a majority of the Regular Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Trust Securities.
The recitals contained in this Declaration and the Trust 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 Trust Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article VIII
hereof, shall have perpetual existence.
SECTION 3.15 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 Section
3.15(b) and (c).
29
(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 Trust Securities, the Delaware Trustee or the Property
Trustee, consolidate, amalgamate, merge with or into, or be replaced by, or
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to 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
Trust Securities; or
(B) substitutes for the Trust Preferred Securities other securities
having substantially the same terms as the Trust Preferred Securities
(the "Successor Trust Securities") so long as the Successor Trust
Securities rank the same as the Trust Preferred Securities rank with
respect to Distributions, assets and payments upon liquidation,
redemption and otherwise;
(ii) the Company expressly acknowledges a trustee of the Successor Entity
that possesses the same powers and duties as the Property Trustee as the
Holder of the Partnership Preferred Securities;
(iii) the Successor Trust Securities are listed, or any Successor Trust
Securities will be listed upon notification of issuance, on any national
securities exchange or with another organization on which the Trust
Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not cause the Trust Preferred Securities (including
any Successor Trust Securities) to be downgraded by any nationally
recognized statistical rating organization;
(v) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights, preferences and
privileges of the Holders of the Trust Preferred Securities (including any
Successor Trust Securities) in any material respect;
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(vi) such Successor Entity has a purpose identical to that of the Trust;
(vii) the Company guarantees the obligations of such Successor Entity
under the Successor Trust Securities at least to the extent provided by the
Trust 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 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 Trust Preferred
Securities (including any Successor Trust 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 under the 1940 Act;
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will not be classified
as an association or a publicly traded partnership taxable as a
corporation for United States federal income tax purposes; and
(D) following such merger, consolidation, amalgamation or
replacement, the Partnership will not be classified as an association or
a publicly traded partnership taxable as a corporation for United States
federal income tax purposes.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with the
consent of Holders of 100% in liquidation amount of the Trust Preferred
Securities, consolidate, amalgamate, merge with or into, or be replaced by
any other entity or permit any other entity to consolidate, amalgamate, merge
with or into, or replace it if such consolidation, amalgamation, merger or
replacement would cause the Trust or Successor Entity or the Partnership to
be classified as an association or a publicly traded partnership taxable as a
corporation for United States federal income tax purposes.
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ARTICLE IV
SPONSOR
SECTION 4.1 Responsibilities of the Sponsor.
In connection with the issue and sale of the Trust Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Trust Preferred
Securities, including any amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Trust Preferred
Securities and to do any and all such acts, 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;
(c) to prepare for filing by the Trust an application to the New York
Stock Exchange or any other national stock exchange or the Nasdaq
National Market System for listing upon notice of issuance of any Trust
Preferred Securities, Partnership Preferred Securities, the Trust
Preferred Securities Guarantee and the Partnership Guarantee;
(d) to prepare for filing by the Trust with the Commission a
registration statement relating to the registration of the Trust
Preferred Securities, the Partnership Preferred Securities, the Trust
Preferred Securities Guarantee, and the Partnership Guarantee under
Section 12(b) of the Exchange Act, including any amendments thereto; and
(e) to negotiate the terms of an underwriting agreement and any
pricing agreement providing for the sale of the Trust Preferred
Securities.
32
SECTION 4.2 Indemnification and Expenses of the Trustee
The Partnership agrees, and to the extent the Partnership fails to do
so, the Sponsor agrees to indemnify the Property Trustee and the Delaware
Trustee for, and to hold each of them harmless against, any loss, liability
or expense incurred without negligence or bad faith on the part of the
Property Trustee or the Delaware Trustee, as the case may be, arising out of
or in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending either of them
against any claim or liability in connection with the exercise or performance
of any of their respective powers or duties hereunder; the provisions of this
Section 4.2 shall survive the resignation or removal of the Delaware Trustee
or the Property Trustee or the termination of this Declaration.
ARTICLE V
TRUST COMMON SECURITIES HOLDER
SECTION 5.1 Company's Purchase of Trust Common Securities.
On the Closing Date the Company will purchase all of the Trust Common
Securities issued by the Trust, for an amount at least equal to 3% of the
capital of the Trust, at the same time as the Trust Preferred Securities are
sold.
SECTION 5.2 Covenants of the Trust Common Securities Holder.
For so long as the Trust Preferred Securities remain outstanding, the
Company will covenant (i) to maintain directly 100 percent ownership of the
Trust Common Securities, (ii) to cause the Trust to remain a statutory
business trust and not to voluntarily dissolve, wind up, liquidate, or be
terminated, except as permitted by this Declaration, (iii) to use its
commercially reasonable efforts to ensure that the Trust will not be an
investment company for purposes of the 1940 Act, and (iv) to take no action
which would be reasonably likely to cause the Trust to be classified as an
association or a publicly traded partnership taxable as a corporation for
United States federal income tax purposes.
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ARTICLE VI
TRUSTEES
SECTION 6.1 Number of Trustees.
The number of Trustees initially shall be four (4), and:
(a) at any time before the issuance of any Trust Securities, the
Sponsor may, by written instrument, increase or decrease the number of
Trustees; and
(b) after the issuance of any Trust Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a
Majority in liquidation amount of the Trust Common Securities voting as a
class at a meeting of the Holders of the Trust Common Securities;
provided, however, that the number of Trustees shall in no event be less
than three (3); provided, further, that (1) if required by the Business
Trust Act, one Trustee is the Delaware Trustee; (2) there shall be at
least one Trustee who is an employee or officer of, or is affiliated with
the Company (each, a "Regular Trustee"); and (3) one Trustee shall be the
Property Trustee for so long as this Declaration is required to qualify
as an indenture under the Trust Indenture Act, and such Property Trustee
may also serve as Delaware Trustee if it meets the applicable
requirements.
SECTION 6.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the
requirements of applicable law,
provided, that if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee may also be the Delaware Trustee (in which case
Section 3.11 shall have no application).
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SECTION 6.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee (the "Property Trustee")
which shall act as Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to
the requirements of the supervising or examining authority referred to
above, then for the purposes of this Section 6.3(a)(ii), the combined
capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Property Trustee shall cease to be eligible to
so act under Section 6.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 6.7(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act,
the Property Trustee and the Holder of the Trust 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 Trust 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.
(e) The initial Property Trustee shall be:
THE CHASE MANHATTAN BANK
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SECTION 6.4 Qualifications of Regular Trustees and Delaware Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the Property
Trustee also acts as Delaware Trustee) shall be either a natural person who
is at least 21 years of age or a legal entity that shall act through one or
more Authorized Officers.
SECTION 6.5 Regular Trustees.
The initial Regular Trustees shall be:
Theresa Lang
Stanley Schaefer
(a) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over
which the Regular Trustees have power to act, any power of the Regular
Trustees may be exercised by, or with the consent of, any one such Regular
Trustee.
(b) Unless otherwise determined by the Regular Trustees, and except
as otherwise required by the Business Trust Act or applicable law, any
Regular Trustee is authorized to execute on behalf of the Trust any documents
which the Regular Trustees have the power and authority to cause the Trust to
execute pursuant to Section 3.6, provided, that the registration statement
referred to in Section 3.6(b)(i), including any amendments thereto, shall be
signed by or on behalf of a majority of the Regular Trustees.
SECTION 6.6 Delaware Trustee.
The initial Delaware Trustee shall be:
Chase Manhattan Bank Delaware
SECTION 6.7 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 6.7(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Trust Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Trust Securities, by vote of the
Holders of a Majority in liquidation amount of
36
the Trust Common Securities voting as a class at a meeting of the Holders
of the Trust Common Securities.
(b) (i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 6.7(a) until a successor Trustee
possessing the qualifications to act as Property Trustee under Section 6.3 (a
"Successor Property Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Property Trustee
and delivered to the Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with Section 6.7(a) until a successor Trustee possessing
the qualifications to act as Delaware Trustee under Sections 6.2 and 6.4
(a "Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or
resignation. Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing signed by the Trustee and
delivered to the 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 Property
Trustee shall be effective:
(A) until a Successor Property Trustee has been appointed and has
accepted such appointment by instrument executed by such Successor
Property Trustee and delivered to the Trust, the Sponsor and the
resigning Property Trustee; or
(B) until the assets of the Trust have been completely liquidated
and the proceeds thereof distributed to the Holders of the Trust
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.
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(d) The Holders of the Trust Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor
Property Trustee, as the case may be, if the Property Trustee or the Delaware
Trustee delivers an instrument of resignation in accordance with this
Section 6.7.
(e) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this
Section 6.7 within 60 days after delivery to the Sponsor and the Trust of an
instrument of resignation, the resigning Property Trustee or Delaware
Trustee, as applicable, may petition any court of competent jurisdiction for
appointment of a Successor Property Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may
deem proper and prescribe, appoint a Successor Property Trustee or Successor
Delaware Trustee, as the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Property Trustee or successor
Delaware Trustee, as the case may be.
SECTION 6.8 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 6.1, or if the number of Trustees
is increased pursuant to Section 6.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 6.7.
SECTION 6.9 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee
shall not operate to annul 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 6.7, 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.
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SECTION 6.10 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 any activity on the ground that
the meeting has not been lawfully called or convened. Unless provided
otherwise in this Declaration, any action of the Regular Trustees may be
taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter; provided, that a Quorum is present, or without a meeting by the
unanimous written consent of the Regular Trustees. Notwithstanding the
foregoing, any and all actions of the Regular Trustees may be taken by the
unanimous written consent of all Regular Trustees.
SECTION 6.11 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in
Section 3.6, including any registration statement or amendment thereto filed
with the Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to
time to such of their number 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.
39
SECTION 6.12 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Property Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either
may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Property Trustee or the Delaware Trustee, as
the case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Property Trustee or the
Delaware Trustee, as the case may be, shall be the successor of the Property
Trustee or the Delaware Trustee, as the case may be, hereunder; provided,
that such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on
the part of any of the parties hereto.
ARTICLE VII
DISTRIBUTIONS
SECTION 7.1 Distributions.
(a) Holders of Trust Securities shall be entitled to receive
cumulative cash distributions at the rate per annum of % of the stated
liquidation amount of $25 per Trust Security, calculated on the basis of a
360-day year consisting of twelve 30-day months. For any period shorter than
a full 90-day quarter, distributions will be computed on the basis of the
actual number of days elapsed in such 90-day quarter. Distributions shall be
made on the Trust Preferred Securities and the Trust Common Securities on a
Pro Rata basis. Distributions on the Trust Securities shall, from the date of
original issue, accumulate and be cumulative and shall be payable quarterly
only to the extent that the Trust has funds available for the payment of such
Distributions in the Property Account. Distributions not paid on the
scheduled payment date will accumulate and compound quarterly at the rate of
% per annum ("Compounded Distributions"). "Distributions" shall mean ordinary
cumulative distributions in respect of each Fiscal Period together with any
Compounded Distributions. If and to the extent that the Partnership makes a
distribution on the Partnership Preferred Securities held by the Property
Trustee or the Company makes a payment under the Partnership Guarantee (the
amount of any such partnership distribution, including any compounded
partnership distributions, or guarantee payment being a "Payment Amount"),
the Trust shall and the Property Trustee is directed, to the extent funds are
available for that purpose, to make a Pro Rata Distribution of the Payment
Amount to Holders.
40
(b) Distributions on the Trust Securities will be cumulative, will
accumulate from the date of initial issuance and will be payable quarterly in
arrears on each March 30, June 30, September 30 and December 30, commencing
, 1998, when, as and if available for payment, by the Property
Trustee, except as otherwise described below. If Distributions are not paid
when scheduled, the accumulated Distributions shall be paid to the Holders of
record of Trust Securities as they appear on the books and records of the
Trust on the record date as determined under Section 7.1(d) below.
(c) Amounts available to the Trust for distribution to the Holders of
the Trust Securities will be limited to payments received by the Trust from
the Partnership on the Partnership Preferred Securities or from the Company
on the Partnership Guarantees paid by the Company to the Trust. If the
Property Trustee, as the holder of the Partnership Preferred Securities for
the benefit of the Holders of the Trust Securities, receives notice of any
determination by the Partnership not to pay distributions on such Partnership
Preferred Securities, the Property Trustee shall give notice of such
determination to the Holders.
(d) Distributions on the Trust Securities will be payable to the
Holders thereof as they appear on the books and records of the Trust on the
relevant record dates, which relevant record dates, as long as the Trust
Preferred Securities remain in book-entry only form, will be one Business Day
prior to the relevant payment dates. Such distributions will be paid through
the Property Trustee who will hold amounts received in respect of the
Partnership Preferred Securities in the Property Account for the benefit of
the Holders of the Trust Securities. In the event that the Trust Preferred
Securities do not remain in book-entry only form, the relevant record dates
shall be the 15th day of the month of the relevant payment dates. In the
event that any date on which distributions are payable on the Trust
Securities is not a Business Day, payment of the distribution payable on such
date will be made on the next succeeding day which is a Business Day (without
any interest or other payment in respect of any such delay) except that, if
such Business Day is in the next succeeding calendar year, such payment shall
be made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date.
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ARTICLE VIII
ISSUANCE OF TRUST SECURITIES
SECTION 8.1 Designation and General Provisions Regarding Trust Securities.
(a) The Regular Trustees shall on behalf of the Trust issue one class of
preferred securities representing undivided beneficial ownership interests in
the assets of the Trust and one class of common securities representing
undivided beneficial ownership interests in the assets of the Trust as follows:
(i) Trust Preferred Securities. Trust Preferred Securities of the
Trust with an aggregate liquidation amount with respect to the assets
of the Trust of dollars ($ ) and a liquidation amount with
respect to the assets of the Trust of $25 per preferred security, are
hereby designated for the purpose of identification only as % Trust
Originated Preferred Securities-SM-(1) (the "Trust Preferred
Securities"). The Trust Preferred Security Certificates evidencing
the Trust Preferred Securities shall be substantially in the form of
Exhibit A-1 to the Declaration, with such changes and additions
thereto or deletions therefrom as may be required by ordinary usage,
custom or practice or to conform to the rules of any stock exchange
on which the Trust Preferred Securities are listed.
(ii) Trust Common Securities. Trust Common Securities of the Trust
with an aggregate liquidation amount with respect to the assets of the
Trust of dollars ($ ) and a liquidation amount with respect to the
assets of the Trust of $25 per common security, are hereby designated for
the purposes of identification only as % Trust Common Securities (the
"Trust Common Securities" and, together with the Trust Preferred
Securities, the "Trust Securities"). The Trust Common Security
Certificates evidencing the Trust Common Securities shall be
substantially in the form of Exhibit A-2 to the Declaration, with such
changes and additions thereto or deletions therefrom as may be required
by ordinary usage, custom or practice.
(b) Except as provided in Section 9.2(b) of this Declaration, the Trust
Preferred Securities rank PARI PASSU and
- ------------------------
(1) "Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co., Inc.
42
payment thereon shall be made Pro Rata with the Trust Common Securities. The
Trust shall issue no securities or other interests in the assets of the Trust
other than the Trust Preferred Securities and the Trust Common Securities.
(c) Any Regular Trustee shall sign the Trust Securities for the Trust by
manual or facsimile signature. In case any Regular Trustee of the Trust who
shall have signed any of the Trust Securities shall cease to be a 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 Certificate may
be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Trust Security, 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. Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their execution thereof, and
may have such letters, numbers or other marks of identification or designation
and such legends or endorsements as the Regular Trustees may deem appropriate,
or as may be required to comply with any law or with any rule or regulation of
any stock exchange on which Trust Securities may be listed, or to conform to
usage.
A Trust Security shall not be valid until authenticated by the manual
signature of an authorized officer of the Property Trustee. Such signature shall
be conclusive evidence that the Trust Security has been authenticated under this
Declaration.
Upon a written order of the Trust signed by one Regular Trustee, the
Property Trustee shall authenticate the Trust Securities for original issue. The
aggregate number of Trust Securities outstanding at any time shall not exceed
the number set forth in the Terms of the Trust Securities.
The Property Trustee may appoint an authenticating agent acceptable to
the Trust to authenticate Trust Securities. An authenticating agent may
authenticate Trust Preferred Securities whenever the Property Trustee may do
so. Each reference in this Declaration to authentication by the Property
Trustee includes authentication by such agent. An authenticating agent has
the same rights as the Property Trustee to deal with the Sponsor or an
Affiliate of the Sponsor.
(d) The consideration received by the Trust for the issuance of the Trust
Securities shall constitute a contribution
43
to the capital of the Trust and shall not constitute a loan to the Trust.
(e) Upon issuance of the Trust Securities as provided in this Declaration,
the Trust Securities so issued shall be deemed to be validly issued, fully paid
and non-assessable, subject to Section 11.1 with respect to the Trust Common
Securities.
(f) Every Person, by virtue of having become a Holder or a Trust 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 8.2 Redemption of Trust Securities.
(a) Upon a purchase of the Partnership Preferred Securities by the
Partnership upon redemption or otherwise, the proceeds from such purchase shall
be simultaneously applied Pro Rata to redeem Trust Securities having an
aggregate liquidation amount equal to the Partnership Preferred Securities so
purchased or redeemed at an amount equal to $25 per Partnership Preferred
Security plus an amount equal to accumulated and unpaid Distributions, including
any Compounded Distributions thereon through the date of the redemption or such
lesser amount as shall be received by the Trust in respect of the Partnership
Preferred Securities so purchased or redeemed (the "Redemption Price"). Holders
will be given not less than 30 nor more than 60 days notice of such redemption.
(b) If fewer than all the outstanding Trust Securities are to be so
redeemed, the Trust Common Securities and the Trust Preferred Securities will be
redeemed Pro Rata and the Trust Preferred Securities to be redeemed will be
redeemed as described in Section 8.3 below; provided, that fewer than all of the
outstanding Trust Preferred Securities may not be redeemed unless all
accumulated and unpaid Distributions have been paid on all Trust Preferred
Securities for all quarterly distribution periods terminating on or prior to the
date of redemption.
(c) If, at any time, a Trust Special Event shall occur and be continuing,
the Regular Trustees shall, unless the Partnership Preferred Securities are
redeemed in the limited circumstances described below, within 90 days following
the occurrence of such Trust Special Event elect to either (i) dissolve the
Trust upon not less than 30 nor more than 60 days notice with the result that,
after satisfaction of creditors, if any, of the Trust, Partnership Preferred
Securities would be
44
distributed on a Pro Rata basis to the Holders of the Trust Preferred
Securities and the Trust Common Securities in liquidation of such Holders'
interests in the Trust; provided, however, that if at the time there is
available to the Trust the opportunity to eliminate, within such 90-day
period, the Trust Special Event by taking some ministerial action, such as
filing a form or making an election, or pursuing some other similar
reasonable measure which in the sole judgment of the Sponsor has or will
cause no adverse effect on the Trust, the Partnership, the Sponsor or the
Holders of the Trust Securities and will involve no material cost, the Trust
will pursue such measure in lieu of dissolution or (ii) cause the Trust
Preferred Securities to remain outstanding; provided, that in the case of
this clause (ii), the Sponsor shall pay any and all expenses incurred by or
payable by the Trust attributable to the Trust Special Event. Furthermore, if
in the case of the occurrence of a Trust Tax Event, the Regular Trustees have
received a Trust Redemption Tax Opinion, then the General Partner shall have
the right, within 90 days following the occurrence of such Trust Tax Event,
to elect to cause the Partnership to redeem the Partnership Preferred
Securities in whole (but not in part) for cash upon not less than 30 nor more
than 60 days notice and promptly following such redemption, the Trust
Securities will be redeemed by the Trust at the Redemption Price.
(d) If the Partnership Preferred Securities are distributed to the
Holders of the Trust Preferred Securities, the Sponsor will use its best
efforts to cause the Partnership Preferred Securities to be listed on the New
York Stock Exchange or on such other national securities exchange or similar
organization as the Trust Preferred Securities are then listed or quoted.
(e) On the date fixed for any distribution of Partnership Preferred
Securities, upon dissolution of the Trust, (i) the Trust Preferred Securities
and the Trust Common Securities will no longer be deemed to be outstanding and
(ii) certificates representing Trust Securities will be deemed to represent the
Partnership Preferred Securities having a liquidation preference equal to the
stated liquidation amount of such Trust Securities until such certificates are
presented to the Sponsor or its agent for transfer or reissuance.
SECTION 8.3 Redemption Procedures.
(a) Notice of any redemption of, or notice of distribution of Partnership
Preferred Securities in exchange for, the Trust Securities (a
"Redemption/Distribution Notice") will be given by the Trust by mail to each
Holder of Trust Securities to
45
be redeemed or exchanged not fewer than 30 nor more than 60 days before the
date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Partnership
Preferred Securities. For purposes of the calculation of the date of
redemption or exchange and the dates on which notices are given pursuant to
this Section 8.3, a Redemption/ Distribution Notice shall be deemed to be
given on the day such notice is first mailed by first-class mail, postage
prepaid, to Holders of Trust Securities. Each Redemption/Distribution Notice
shall be addressed to the Holders of Trust Securities at the address of each
such Holder appearing in the books and records of the Trust. No defect in the
Redemption/ Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(b) In the event that fewer than all the outstanding Trust Securities are to
be redeemed, the Trust Securities to be redeemed shall be redeemed Pro Rata from
each Holder of Trust Securities, provided, that in respect of Preferred
Securities registered in the name of and held of record by DTC or its nominee
(or any successor Clearing Agency or its nominee) or any nominee, the
distribution of the proceeds of such redemption will be made to each Clearing
Agency Participant (or Person on whose behalf such nominee holds such
securities) in accordance with the procedures applied by such agency or nominee.
In the event that the Trust Securities do not remain in book-entry only form and
fewer than all of the outstanding Trust Securities are to be redeemed, the Trust
Securities shall be redeemed Pro Rata or pursuant to the rules of any securities
exchange on which the Trust Securities are listed.
(c) If Trust Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Partnership Preferred Securities are redeemed as set out in this Section 8.3
(which notice will be irrevocable), then (A) while the Trust Preferred
Securities are in book-entry only form, by 12:00 noon, New York City time, on
the redemption date, the Property Trustee will deposit irrevocably with the DTC
or its nominee (or successor Clearing Agency or its nominee) funds sufficient to
pay the applicable Redemption Price with respect to the Trust Preferred
Securities and will give the DTC irrevocable instructions and authority to pay
the Redemption Price to the Holders of the Trust Preferred Securities, and (B)
with respect to Trust Preferred Securities issued in definitive form and Trust
Common Securities, the Property Trustee will pay the relevant Redemption Price
to the Holders of such Trust Securities by check mailed to the address of the
relevant Holder appearing on the books and records of the Trust on
46
the redemption date. If a Redemption/Distribution Notice shall have been
given and funds deposited as required, if applicable, then immediately prior
to the close of business on the date of such deposit, or on the redemption
date, as applicable, distributions will cease to accumulate on the Trust
Securities so called for redemption and all rights of Holders of such Trust
Securities will cease, except the right of the Holders of such Trust
Securities to receive the Redemption Price, but without interest on such
Redemption Price. If any date fixed for redemption of Trust Securities is not
a Business Day, then payment of the Redemption Price payable on such date
will be made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of the amount payable subject to
such delay) except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date fixed for
redemption. If payment of the Redemption Price in respect of any Trust
Securities is improperly withheld or refused and not paid either by the
Property Trustee or by the Sponsor as guarantor pursuant to the relevant
Trust Guarantee, Distributions on such Trust Securities will continue to
accumulate at the then applicable rate from the original redemption date to
the actual date of payment, in which case the actual payment date will be
considered the date fixed for redemption for purposes of calculating the
Redemption Price. For these purposes, the applicable Redemption Price shall
not include Distributions which are being paid to Holders who were Holders on
a relevant record date. Upon satisfaction of the foregoing conditions, then
immediately prior to the close of business on the date of such deposit or
payment, all rights of Holders of such Trust Preferred Securities so called
for redemption will cease, except the right of the Holders to have received
the Redemption Price, but without interest on such Redemption Price, and from
and after the date fixed for redemption, such Trust Preferred Securities will
not accumulate distributions or bear interest.
Neither the Regular Trustees nor the Trust shall be required to register or
cause to be registered the transfer of any Trust Securities that have been
called for redemption.
(d) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Company or its
subsidiaries may at any time and from time to time purchase outstanding Trust
Preferred Securities by tender, in the open market or by private agreement.
SECTION 8.4 Voting Rights of Trust Preferred Securities.
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(a) Except as provided under Sections 6.1(b) and this Article VIII and as
otherwise required by the Business Trust Act, the Trust Indenture Act and other
applicable law, the Holders of the Trust Preferred Securities will have no
voting rights.
(b) Subject to the requirement of the Property Trustee obtaining a tax
opinion in certain circumstances set forth in Section 8.4(d) below, the Holders
of a Majority in liquidation amount of the Trust Preferred Securities have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Property Trustee, or direct the exercise of any trust or
power conferred upon the Property Trustee under the Declaration, including the
right to direct the Property Trustee, as Holder of the Partnership Preferred
Securities, to (i) exercise the remedies available to it under the Limited
Partnership Agreement as a Holder of the Partnership Preferred Securities,
including the right to direct the Special Representative of the Partnership as
elected by the Holders of the Partnership Preferred Securities in accordance
with the Limited Partnership Agreement (A) to enforce the Partnership's
creditors rights and other rights with respect to the Affiliate Investment
Instruments and any Investment Guarantees, (B) to enforce the rights of the
Holders of the Partnership Preferred Securities under the Partnership Guarantee,
and (C) to enforce the rights of the Holders of the Partnership Preferred
Securities to receive distributions (if and to the extent such distributions
have been declared out of funds legally available therefor by the General
Partner in its sole discretion) on the Partnership Preferred Securities or (ii)
consent to any amendment, modification, or termination of the Limited
Partnership Agreement or the Partnership Preferred Securities where such consent
shall be required; provided, however, that where a consent or action under the
Limited Partnership Agreement would require the consent or act of the Holders of
more than a majority of the aggregate liquidation preference of Partnership
Preferred Securities affected thereby, only the Holders of the percentage of the
aggregate stated liquidation amount of the Trust Preferred Securities which is
at least equal to the percentage of aggregate liquidation preference required
under the Limited Partnership Agreement may direct the Property Trustee to give
such consent or take such action.
(c) If the Property Trustee fails to enforce its rights under the
Partnership Preferred Securities after a Holder of record of Trust Preferred
Securities has made a written request, such Holder of record of Trust Preferred
Securities may institute a legal proceeding directly against the General Partner
or the Special Representative, to enforce the Property Trustee's rights under
the Limited Partnership Agreement without first
48
instituting any legal proceeding against the Property Trustee or any other
person or entity. Notwithstanding the foregoing, if a Trust Enforcement Event
has occurred and is continuing and such event is attributable to the failure of
an Investment Affiliate to make any required payment when due on any Affiliate
Investment Instrument, then a Holder of Trust Preferred Securities may directly
institute a proceeding against such Investment Affiliate for enforcement of
payment with respect to such Affiliate Investment Instrument.
(d) The Property Trustee shall notify all Holders of the Trust Preferred
Securities of any notice of any Partnership Enforcement Event received from the
General Partner with respect to the Partnership Preferred Securities and the
Affiliate Investment Instruments. Such notice shall state that such Partnership
Enforcement Event also constitutes a Trust Enforcement Event. Except with
respect to directing the time, method, and place of conducting a proceeding for
a remedy, the Property Trustee shall be under no obligation to take any of the
actions described in clause 8.4(b)(i) and (ii) above unless the Property Trustee
has obtained an opinion of independent tax counsel to the effect that as a
result of such action, the Trust will not fail to be classified as a grantor
trust for United States federal income tax purposes and that after such action
each Holder will continue to be treated as owning an undivided beneficial
ownership interest in the Partnership Preferred Securities.
(e) In the event the consent of the Property Trustee, as the Holder of the
Partnership Preferred Securities, is required under the Limited Partnership
Agreement with respect to any amendment, modification or termination of the
Limited Partnership Agreement, the Property Trustee shall request the direction
of the Holders of the Trust Securities with respect to such amendment,
modification or termination and shall vote with respect to such amendment,
modification or termination as directed by a Majority in liquidation amount of
the Trust Securities voting together as a single class; provided, however, that
where a consent under the Limited Partnership Agreement would require the
consent of the Holders of more than a majority of the aggregate liquidation
preference of the Partnership Preferred Securities, the Property Trustee may
only give such consent at the direction of the Holders of at least the same
proportion in aggregate stated liquidation amount of the Trust Securities. The
Property Trustee shall not take any such action in accordance with the
directions of the Holders of the Trust Securities unless the Property Trustee
has obtained an opinion of tax counsel to the effect that, as a result of such
action, the Trust will not be classified as other than a grantor trust for
United States federal income tax purposes.
49
(f) A waiver of a Partnership Enforcement Event with respect to the
Partnership Preferred Securities will constitute a waiver of the corresponding
Trust Enforcement Event.
(g) Any required approval or direction of Holders of Trust Preferred
Securities may be given at a separate meeting of Holders of Trust Preferred
Securities convened for such purpose, at a meeting of all of the Holders of
Trust Securities or pursuant to written consent. The Regular Trustees will cause
a notice of any meeting at which Holders of Trust Preferred Securities are
entitled to vote, or of any matter upon which action by written consent of such
Holders is to be taken, to be mailed to each Holder of record of Trust Preferred
Securities. Each such notice will include a statement setting forth the
following information: (i) the date of such meeting or the date by which such
action is to be taken; (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought; and (iii) instructions for the
delivery of proxies or consents.
(h) No vote or consent of the Holders of Trust Preferred Securities will be
required for the Trust to redeem and cancel Trust Preferred Securities or
distribute Partnership Preferred Securities in accordance with the Declaration.
(i) Notwithstanding that Holders of Trust Preferred Securities are
entitled to vote or consent under any of the circumstances described above,
any of the Trust Securities that are beneficially owned at such time by the
Company or any entity directly or indirectly controlled by, or under direct
or indirect common control with, the Company, shall not be entitled to vote
or consent and shall, for purposes of such vote or consent, be treated as if
such Trust Securities were not outstanding, except for Trust Preferred
Securities purchased or acquired by the Company or its affiliates in
connection with transactions effected by or for the account of customers of
the Company or any of its subsidiaries or in connection with the distribution
or trading of such Trust Securities; provided, however, that persons (other
than affiliates of the Company) to whom the Company or any of its
subsidiaries have pledged Trust Preferred Securities may vote or consent with
respect to such pledged Trust Preferred Securities pursuant to the terms of
such pledge.
(j) Holders of the Trust Preferred Securities will have no rights to appoint
or remove the Regular Trustees, who may be appointed, removed or replaced solely
by the Company, as the Holder of all of the Trust Common Securities.
50
SECTION 8.5 Voting Rights of Trust Common Securities.
(a) Except as provided under this Section 8.5 or as otherwise required by
the Business Trust Act, the Trust Indenture Act or other applicable law or
provided by the Declaration, the Holders of the Trust Common Securities will
have no voting rights.
(b) The Holders of the Trust Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after all Trust
Enforcement Events with respect to the Trust Preferred Securities have been
cured, waived, or otherwise eliminated and subject to the requirement of the
Property Trustee obtaining a tax opinion in certain circumstances set forth in
this paragraph (c), the Holders of a Majority in liquidation amount of the Trust
Common Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee, or
direct the exercise of any trust or power conferred upon the Property Trustee
under the Declaration, including the right to direct the Property Trustee, as
Holder of the Partnership Preferred Securities, to (i) exercise the remedies
available to it under the Limited Partnership Agreement as a Holder of the
Partnership Preferred Securities, including the right to direct the Special
Representative of the Partnership as elected by the Holders of the Partnership
Preferred Securities in accordance with the Limited Partnership Agreement (A) to
enforce the Partnership's creditors rights and other rights with respect to the
Affiliate Investment Instruments and any Investment Guarantees, (B) to enforce
the rights of the Holders of the Partnership Preferred Securities under the
Partnership Guarantee, and (C) to enforce the rights of the Holders of the
Partnership Preferred Securities to receive distributions (if and to the extent
such distributions have been declared out of funds legally available therefor by
the General Partner in its sole discretion) on the Partnership Preferred
Securities or (ii) consent to any amendment, modification, or termination of the
Limited Partnership Agreement or the Partnership Preferred Securities where such
consent shall be required; provided, however, that where a consent or action
under the Limited Partnership Agreement would require the consent or act of the
Holders of more than a majority of the aggregate liquidation preference of
Partnership Preferred Securities affected thereby, only the Holders of the
percentage of the aggregate stated liquidation amount of the Trust Common
Securities which is at least equal to the percentage required under the Limited
Partnership Agreement may
51
direct the Property Trustee to give such consent or take such action. Except
with respect to directing the time, method, and place of conducting a
proceeding for a remedy, the Property Trustee shall be under no obligation to
take any of the actions described in clause 8.5(c)(i) and (ii) above unless
the Property Trustee has obtained an opinion of independent tax counsel to
the effect that, as a result of such action, for United States federal income
tax purposes the Trust will not fail to be classified as a grantor trust and
each Holder will be treated as owning an undivided beneficial ownership
interest in the Partnership Preferred Securities.
(d) If the Property Trustee fails to enforce its rights under the
Partnership Preferred Securities after a Holder of record of Trust Common
Securities has made a written request, such Holder of record of Trust Common
Securities may directly institute a legal proceeding directly against the
Company, as General Partner of the Partnership or the Special Representative, to
enforce the Property Trustee's rights under the Partnership Preferred Securities
without first instituting any legal proceeding against the Property Trustee
or any other person or entity. Notwithstanding the foregoing, if a Trust
Enforcement Event has occurred and is continuing and such event is attributable
to the failure of an Investment Affiliate to make any required payment when due
on any Affiliate Investment Instrument, then a Holder of Trust Common Securities
may directly institute a proceeding against such Investment Affiliate for
enforcement of payment with respect to such Affiliate Investment Instrument.
(e) A waiver of a Partnership Enforcement Event with respect to the
Partnership Preferred Securities will constitute a waiver of the corresponding
Trust Enforcement Event.
(f) Any required approval or direction of Holders of Trust Common Securities
may be given at a separate meeting of Holders of Trust Common Securities
convened for such purpose, at a meeting of all of the Holders of Trust
Securities or pursuant to written consent. The Regular Trustees will cause a
notice of any meeting at which Holders of Trust Common Securities are entitled
to vote, or of any matter upon which action by written consent of such Holders
is to be taken, to be mailed to each Holder of record of Trust Common
Securities. Each such notice will include a statement setting forth the
following information: (i) the date of such meeting or the date by which such
action is to be taken; (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought; and (iii) instructions for the
delivery of proxies or consents.
52
(g) No vote or consent of the Holders of the Trust Common Securities shall
be required for the Trust to redeem and cancel Trust Common Securities or to
distribute Partnership Preferred Securities in accordance with the Declaration
and the terms of the Trust Securities.
SECTION 8.6 Paying Agent.
In the event that the Trust 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, an office or agency where the Trust Preferred Securities may
be presented for payment ("Paying Agent"). The Trust may appoint the Paying
Agent and may appoint one or more additional paying agents in such other
locations as it shall determine. The term "Paying Agent" includes any additional
paying agent. The Trust may change any Paying Agent without prior notice to any
Holder. The Trust shall notify the Property Trustee of the name and address of
any Paying Agent not a party to this Declaration. If the Trust fails to appoint
or maintain another entity as Paying Agent, the Property Trustee shall act as
such. The Trust or any of its Affiliates may act as Paying Agent. The Chase
Manhattan Bank shall initially act as Paying Agent for the Trust Preferred
Securities and the Trust Common Securities.
SECTION 8.7 Listing
The Sponsor shall use its best efforts to cause the Trust Preferred
Securities to be listed for quotation on the New York Stock Exchange.
SECTION 8.8 Acceptance of Guarantee and Agreements, Limited Partnership
Agreement.
Each Holder of Trust Preferred Securities and Trust Common Securities, by
the acceptance thereof, agrees to the provisions of the applicable Trust
Guarantee, the Partnership Guarantee, and the Investment Guarantee,
respectively, including the subordination provisions therein.
ARTICLE IX
TERMINATION AND LIQUIDATION OF THE TRUST
SECTION 9.1 Termination of Trust.
(a) The Trust shall terminate:
53
(i) upon the bankruptcy of the Holder of Trust Common Securities or
the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor, the filing of a certificate of
cancellation with respect to the Trust after having obtained the consent
of at least a Majority in Liquidation Amount of the Trust Securities,
voting together as a single class, to file such certificate of
cancellation, or the revocation of the Sponsor's charter 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
Sponsor or the Trust;
(iv) when all of the Trust Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the Trust
Securities;
(v) upon the election of the Regular Trustees, following the
occurrence and continuation of a Trust Special Event, pursuant to which
the Trust shall have been dissolved in accordance with the terms of the
Trust Securities and all of the Partnership Preferred Securities shall
have been distributed to the Holders of Trust Securities in exchange for
all of the Trust Securities; or
(vi) before the issuance of any Trust 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 9.1(a), the Trustees shall file a certificate of cancellation with
the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article XI shall survive the
termination of the Trust.
SECTION 9.2 Liquidation Distribution Upon Termination and Dissolution of the
Trust.
(a) In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Trust (each a "Trust Liquidation"), the Holders
of the Trust Preferred Securities on the date of the Trust Liquidation will be
entitled to receive, out of the assets of the Trust available for distribution
to Holders of Trust Securities after satisfaction of the
54
Trusts' liabilities and creditors, distributions in cash or other immediately
available funds in an amount equal to the aggregate of the stated liquidation
amount of $25 per Trust Security plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being the "Trust Liquidation
Distribution"), unless, in connection with such Trust Liquidation,
Partnership Preferred Securities shall be distributed on a Pro Rata basis to
the Holders of the Trust Securities in exchange for such Trust Securities.
(b) If, upon any such Trust Liquidation, the Trust Liquidation Distribution
can be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Trust Liquidation Distribution, then the amounts
payable directly by the Trust on the Trust Securities shall be paid on a Pro
Rata basis. The Holders of the Trust Common Securities will be entitled to
receive distributions upon any such Trust Liquidation Pro Rata with the Holders
of the Trust Preferred Securities except that if the Company is in default on
any of its obligations under the Trust Preferred Securities Guarantee, the
Partnership Guarantee, or any Investment Guarantee, or any Investment Event of
Default has occurred and is continuing with respect to an Affiliate Investment
Instrument, the Trust Preferred Securities shall have a preference over the
Trust Common Securities with regard to such distributions as provided below.
Such preference is effectuated by the Holder of the Trust Common Securities
hereby agreeing to provide limited recourse guarantees as follows: (i) to the
Holders of the Trust Preferred Securities, of the Company's obligations under
the Trust Preferred Securities Guarantee; (ii) to the Trust and the Holders of
the Trust Preferred Securities, of the Company's obligations under the
Partnership Guarantee; and (iii) to the Partnership and the Holders of the Trust
Preferred Securities, of the Company's obligations under any Investment
Guarantee and/or the obligations of any Investment Affiliate under an Affiliate
Investment Instrument. In the case of the limited recourse guarantee given by
the Holder of the Trust Common Securities to the Partnership and the Holder of
the Trust Preferred Securities in respect of the Company's obligations under any
Investment Guarantee and/or any Investment Affiliate's obligations under an
Affiliate Investment Instrument, (i) the Trust Common Securities Holder will be
deemed to have pledged the amount due in respect of its Trust Common Securities
upon a liquidation of the Trust to the Partnership and the Holders of Trust
Preferred Securities; (ii) the Trust Common Securities Holder will be deemed to
have paid such amount to the Partnership in respect of such defaulted Investment
Guarantee and/or Affiliate Investment Instrument, as the case may be; (iii) the
Partnership will be deemed to have paid such amount to the Trust; and (iv) the
Property Trustee is hereby authorized to
55
distribute such amount to the Holders of Trust Preferred Securities (on a pro
rata basis among such Trust Preferred Securities Holders) in respect of the
Trust Common Securities Holder's pledge of such amounts to such Trust
Preferred Securities Holders. In the case of a limited recourse guarantee
given by the Holder of the Trust Common Securities to the Trust and the
Holders of the Trust Preferred Securities in respect of the Company's
obligations under the Partnership Guarantee, (i) the Holder of the Trust
Common Securities will be deemed to have pledged the amount due in respect of
its Trust Common Securities upon a liquidation of the Trust to the Trust and
the Holders of the Trust Preferred Securities; (ii) the Holder of the Trust
Common Securities will be deemed to have paid such amount to the Trust in
respect of its obligations under the Partnership Guarantee; and (iii) the
Property Trustee is hereby authorized to distribute such amount to the
Holders of the Trust Preferred Securities (on a pro rata basis among such
Trust Preferred Securities Holders) in respect of the Trust Common Securities
Holder's pledge of such amount to such Trust Preferred Securities Holders.
56
ARTICLE X
TRANSFER OF INTERESTS
SECTION 10.1 Transfer of Trust Securities.
(a) Trust 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 Trust Securities. Any transfer or purported transfer of any
Trust Security not made in accordance with this Declaration shall be null and
void.
(b) Subject to this Article X, Trust Preferred Securities shall be freely
transferable.
SECTION 10.2 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 10.3 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 Trust 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 Trust Securities
represented by such Certificate on the part of any Person, whether or not the
Trust shall have actual or other notice thereof.
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SECTION 10.4 Book Entry Interests.
Unless otherwise specified in the terms of the Trust Preferred
Securities, the Trust Preferred Securities Certificates, on original
issuance, will be issued in the form of one or more fully registered, global
Trust Preferred Security Certificates (each a "Global Certificate"), to be
delivered to DTC, the initial Clearing Agency, by, or on behalf of, the
Trust. Such Global Certificates shall initially be registered on the books
and records of the Trust in the name of Cede & Co., the nominee of DTC, and
no Trust Preferred Security Beneficial Owner will receive a definitive Trust
Preferred Security Certificate representing such Trust Preferred Security
Beneficial Owner's interests in such Global Certificates, except as provided
in Section 10.7. Unless and until definitive, fully registered Trust
Preferred Security Certificates (the "Definitive Trust Preferred Security
Certificates") have been issued to the Trust Preferred Security Beneficial
Owners pursuant to Section 10.7:
(a) the provisions of this Section 10.4 shall be in full force and
effect;
(b) the Trust and the Trustees 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 the Trust Preferred Securities and
the sole Holder of the Global Certificates and shall have no obligation to
the Trust Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 10.4 conflict with
any other provisions of this Declaration, the provisions of this Section
10.4 shall control; and
(d) the rights of the Trust Preferred Security Beneficial Owners shall
be exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Trust Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants and the Clearing Agency shall receive and transmit payments of
Distributions on the Global Certificates to such Clearing Agency
Participants. The Clearing Agency will make book entry transfers among the
Clearing Agency Participants; provided, that solely for the purposes of
determining whether the Holders of the requisite amount of Trust Preferred
Securities have voted on any matter provided for in this Declaration, so
long as Definitive Trust Preferred Security Certificates have not been
issued,
58
the Trustees may conclusively rely on, and shall be fully protected
in relying on, any written instrument (including a proxy) delivered to the
Trustees by the Clearing Agency setting forth the Trust Preferred Security
Beneficial Owners' votes or assigning the right to vote on any matter to any
other Persons either in whole or in part.
SECTION 10.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Trust Preferred Security
Holders is required under this Declaration, unless and until Definitive Trust
Preferred Security Certificates shall have been issued to the Trust Preferred
Security Beneficial Owners pursuant to Section 10.7, the Regular Trustees
shall give all such notices and communications specified herein to be given
to the Trust Preferred Security Holders to the Clearing Agency, and shall
have no notice obligations to the Trust Preferred Security Beneficial Owners.
SECTION 10.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Trust Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency
with respect to such Trust Preferred Securities.
SECTION 10.7 Definitive Trust Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as securities
depositary with respect to the Trust Preferred Securities and a successor
Clearing Agency is not appointed within 90 days after such discontinuance
pursuant to Section 10.6 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 Trust Preferred Securities,
(c) there is a Trust Enforcement Event, then:
(d) Definitive Trust Preferred Security Certificates shall be prepared
by the Regular Trustees on behalf of the Trust with respect to such Trust
Preferred Securities; and
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(e) upon surrender of the Global Certificates by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall cause
Definitive Trust Preferred Security Certificates to be delivered to Trust
Preferred Security Beneficial Owners in accordance with the instructions of
the Clearing Agency. Neither the Trustees nor the Trust shall be liable for
any delay in delivery of such instructions and each of them may conclusively
rely on and shall be fully protected in relying on, said instructions of the
Clearing Agency. The Definitive Trust 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
rule or regulation of any stock exchange on which Trust Preferred Securities
may be listed, or to conform to usage.
SECTION 10.8 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 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, 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 10.8, 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 Trust Securities, as if originally issued, whether or not the lost,
stolen or destroyed Certificate shall be found at any time.
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XI LIMITATION OF LIABILITY OF
HOLDERS OF TRUST SECURITIES, TRUSTEES OR OTHERS
SECTION 11.1 Liability.
(a) Except as expressly set forth in this Declaration, the Trust
Guarantees and the terms of the Trust Securities, the Sponsor and the
Trustees 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 Trust Securities
which shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of Trust Securities
any deficit upon dissolution of the Trust or otherwise.
(b) Pursuant to Section 3803(a) of the Business Trust Act, the Holders of
the Trust Securities shall be entitled to the same limitation of personal
liability extended to shareholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
SECTION 11.2 Exculpation.
(a) No Company 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 Company Indemnified Person in good faith on behalf of the
Trust and in a manner such Company Indemnified Person reasonably believed to
be within the scope of the authority conferred on such Company Indemnified
Person by this Declaration or by law, except that a Company Indemnified
Person shall be liable for any such loss, damage or claim incurred by reason
of such Company Indemnified Person's gross negligence (or, in the case of the
Property Trustee, negligence) or willful misconduct with respect to such acts
or omissions.
(b) 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,
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liabilities, profits, losses, or any other facts pertinent to the existence
and amount of assets from which Distributions to Holders of Trust Securities
might properly be paid.
SECTION 11.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person
for its good faith reliance on the provisions of this Declaration. The
provisions of this Declaration, to the extent that they restrict the duties
and liabilities of an Indemnified Person otherwise existing at law or in
equity (other than the duties imposed on the Property Trustee under the Trust
Indenture Act), are agreed by the parties hereto to replace such other duties
and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between 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 Trust 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
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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 11.4 Indemnification.
(a) (i) To the fullest extent permitted by applicable law, the
Sponsor shall indemnify and hold harmless 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 proceeding if he
acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding
by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption
that the Company Indemnified Person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was
unlawful.
(ii) The Sponsor shall indemnify, to the fullest extent permitted by
law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in
its favor by reason of the fact that he is or was a Company Indemnified
Person against expenses (including 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
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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 11.4(a), or in defense of any claim, issue or matter
therein, he shall be indemnified, to the fullest 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
11.4(a) (unless ordered by a court) shall be made by the Sponsor only as
authorized in the specific case upon a determination that indemnification of
the Company Indemnified Person is proper in the circumstances because he has
met the applicable standard of conduct set forth in paragraphs (i) and (ii).
Such determination shall be made (1) by the 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
Holder of the Trust Common Securities.
(v) Expenses (including 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 11.4(a) shall be paid by the Sponsor in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Company Indemnified Person to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Sponsor as authorized in this Section 11.4(a).
Notwithstanding the foregoing, no advance shall be made by the Sponsor 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
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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 Holder of the Trust Common Securities, that, based upon the
facts known to the Regular Trustees, counsel or the Holder of the Trust
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 Holder of the
Trust Common Securities reasonably determine that such person
deliberately breached his duty to the Trust or Holders of Trust Common
Securities.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 11.4(a) shall not
be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of shareholders or disinterested directors of the Sponsor or
Holders of the Trust Preferred Securities 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 11.4(a) shall
be deemed to be provided by a contract between the Sponsor and each Company
Indemnified Person who serves in such capacity at any time while this
Section 11.4(a) is in effect. Any repeal or modification of this Section
11.4(a) shall not affect any rights or obligations then existing.
(vii) The Sponsor or the Trust may purchase and maintain insurance on
behalf of any person who is or was a Company Indemnified Person against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Sponsor would have the
power to indemnify him against such liability under the provisions of this
Section 11.4(a).
(viii) For purposes of this Section 11.4(a), references to "the Trust"
shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in
a consolidation or merger, so that any person who is or was a director,
trustee, officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director, trustee,
officer, employee or
65
agent of another entity, shall stand in the same position under the
provisions of this Section 11.4(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 11.4(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) Property Trustee, (ii) the
Delaware Trustee, (iii) any Affiliate of the Property Trustee and the
Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Property 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 loss, damage, claim,
liability or expense including taxes (other than taxes based on the income of
the Trustee) incurred without negligence or bad faith on the part of the
Trustee arising out of or in connection with the acceptance or administration
of the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against or
investigating any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 11.4(b) shall survive the satisfaction
and discharge of this Declaration.
SECTION 11.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the Property
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
Trust 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, nor the Property Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if
such opportunity is of a character that, if presented to the Trust, could be
taken by the Trust, and any Covered Person, the Sponsor, the
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Delaware Trustee and the Property Trustee shall have the right to take for
its own account (individually or as a partner or fiduciary) or to recommend
to others any such particular investment or other opportunity. Any Covered
Person, the Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for,
or act on any committee or body of Holders of, securities or other
obligations of the Sponsor or its Affiliates.
ARTICLE XII
ACCOUNTING
SECTION 12.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year.
SECTION 12.2 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 books of account and the
records of the Trust shall be examined by and reported upon as of the end of
each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Regular Trustees.
(b) Within 60 days after of each year commencing ,
, the Property Trustee shall provide to the Holders of the Trust Securities
such reports as are required by Section 313 of the Trust Indenture Act, if
any, in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Property Trustee shall also comply with the requirements
of Section 313(d) of the Trust Indenture Act.
(c) The Regular Trustees shall cause to be duly prepared and delivered to
each of the Holders of Trust Securities, any annual United States federal
income tax information statement, required by the Code, containing such
information with regard to the Trust 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
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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 United States federal
income tax law, 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 12.3 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 Partnership Preferred Securities held by the Property
Trustee shall be made directly to the Property Account and no other funds of
the Trust shall be deposited in the Property Account. The sole signatories
for such accounts shall be designated by the Regular Trustees; provided,
however, that the Property Trustee shall designate the signatories for the
Property Account.
SECTION 12.4 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 over withholding,
Holders shall be limited to an action against the applicable jurisdiction. If
the amount required to be withheld was not withheld from actual Distributions
made, the Trust may reduce subsequent Distributions by the amount of such
withholding. Notwithstanding anything herein to the contrary, the Trust and
the Regular Trustees shall, absent receipt of an opinion of nationally
recognized tax counsel to the contrary, withhold thirty percent (30%) (or
such other rate as may be
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imposed as a result of an amendment to the Code or such lower rate as may be
imposed under an applicable income tax treaty) on the gross amount of any
Distributions on Trust Preferred Securities held by a Holder that is not a
"United States person" within the meaning of Section 7701(a)(30) of the Code.
XIII AMENDMENTS AND MEETINGS
SECTION 13.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any applicable
terms of the Trust 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 Property Trustee, the Property 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:
(i) unless, in the case of any proposed amendment, the Property Trustee
shall have first received an Officers' Certificate from each of the Trust
and the Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Trust Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Property Trustee,
the Property Trustee shall have first received 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 Trust Securities); and
(iii) to the extent the result of such amendment would be to:
69
(A) cause the Trust to fail to continue to be classified for purposes of
United States federal income taxation as a grantor trust;
(B) cause the Partnership to be classified for purposes of United States
federal income tax as an association or publicly traded partnership taxable
as a corporation;
(C) reduce or otherwise adversely affect the powers of the Property
Trustee in contravention of the Trust Indenture Act; or
(D) cause the Trust to be deemed to be an Investment Company required to
be registered under the 1940 Act.
(c) In the event the consent of the Property Trustee, as the Holder of the
Partnership Preferred Securities is required under the Limited Partnership
Agreement with respect to any amendment, modification or termination of the
Limited Partnership Agreement or the Partnership Preferred Securities the
Property Trustee shall request the direction of the Holders of the Trust
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Trust Securities voting together as a
single class; provided, however, that where a consent under the Limited
Partnership Agreement would require the consent of a Super Majority of the
Holders of Partnership Preferred Securities the Property Trustee may only give
such consent at the direction of the Holders of at least the proportion in
liquidation amount of the Trust Securities which the relevant Super Majority
represents of the aggregate liquidation preference of the Partnership Preferred
Securities outstanding; provided, further, that the Property Trustee shall not
be obligated to take any action in accordance with the directions of the Holders
of the Trust Securities under this Section 13.1(c) unless the Property Trustee
has obtained an opinion of independent tax counsel to the effect that for United
States federal income tax purposes the Trust will continue to be classified as a
grantor trust after consummation of such action and each Holder will be treated
as owning an undivided beneficial ownership interest in the Partnership
Preferred Securities.
(d) At such time after the Trust has issued any Trust Securities that remain
outstanding, any amendment that would (I) adversely affect the powers,
preferences or special rights of the Trust Securities or (II) provide for the
dissolution, winding-up or termination of the Trust other than pursuant to the
terms of
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this Declaration, may be effected only with the approval of the Holders of at
least a Majority in liquidation amount of the Trust Securities affected
thereby; provided, that if any amendment or proposal referred to in clause
(I) hereof would adversely affect only the Trust Preferred Securities or the
Trust Common Securities, then only the affected class will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not
be effective except with the approval of a Majority in liquidation amount of
such class of Trust Securities;
(e) Section 11.1(c) and this Section 13.1 shall not be amended without the
consent of all of the Holders of the Trust Securities;
(f) Article IV shall not be amended without the consent of the Holders of a
Majority in liquidation amount of the Trust Common Securities and;
(g) The rights of the Holders of the Trust 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 Trust Common Securities; and
(h) Notwithstanding Section 13.1(c), this Declaration may be amended without
the consent of the Holders of the Trust Securities:
(i) to cure any ambiguity;
(ii) to correct or supplement any provision in this Declaration that may
be defective or inconsistent with any other provision of this Declaration;
(iii) to add to the covenants, restrictions or obligations of the
Sponsor;
(iv) to conform to any change in the 1940 Act or written change in
interpretation or application of the rules and regulations promulgated
thereunder by any legislative body, court, government agency or regulatory
authority;
(v) to conform to any change in the Trust Indenture Act or written
change in interpretation or application of the rules and regulations
promulgated thereunder by any legislative body, court, government agency or
regulatory authority; and
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(vi) to modify, eliminate and add to any provision of this Declaration
to such extent as may be necessary; provided, that such amendments do not
have a material adverse effect on the rights, preferences or privileges of
the Holders.
SECTION 13.2 Meetings of the Holders of Trust Securities; Action by
Written Consent.
(a) Meetings of the Holders of any class of Trust Securities may be
called at any time by the Regular Trustees (or as provided in the terms of
the Trust Securities) to consider and act on any matter on which Holders of
such class of Trust Securities are entitled to act under the terms of this
Declaration, the terms of the Trust Securities, the Limited Partnership
Agreement, the rules of any stock exchange on which the Trust Preferred
Securities are listed or admitted for trading, the Business Trust Act or
other applicable law. 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 Trust Securities. Such direction shall
be given by delivering to the Regular Trustees one or more notices in a
writing stating that the signing Holders of Trust Securities wish to call a
meeting and indicating the general or specific purpose for which the meeting
is to be called. Any Holders of Trust Securities calling a meeting shall
specify in writing the Certificates held by the Holders of Trust Securities
exercising the right to call a meeting and only those Trust Securities
specified shall be counted for purposes of determining whether the required
percentage set forth in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the Trust
Securities, the following provisions shall apply to meetings of Holders of
Trust Securities:
(i) notice of any such meeting shall be given to all the Holders of
Trust Securities having a right to vote thereat at least 7 days and not more
than 60 days before the date of such meeting. Any action that may be taken
at a meeting of the Holders of Trust Securities may be taken without a
meeting if a consent in writing setting forth the action so taken is signed
by the Holders of Trust Securities owning not less than the minimum amount
of Trust Securities in liquidation amount that would be necessary to
authorize or take such action at a meeting at which all Holders of Trust
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 Trust Securities
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entitled to vote who have not consented in writing. The Regular Trustees
may specify that any written ballot submitted to the Holder 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 Trust Security may authorize any Person to act for
it by proxy on all matters in which a Holder of Trust 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 Trust
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 Trust Securities were shareholders of a
Delaware corporation;
(iii) each meeting of the Holders of the Trust 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
Trust Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Trust Preferred Securities are then listed for
trading, otherwise provides, the Regular Trustees, in their sole discretion,
shall establish all other provisions relating to meetings of Holders of
Trust 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 Trust
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.
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ARTICLE XIV
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 14.1 Representations and Warranties of Property Trustee.
The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Property Trustee represents and warrants to the Trust and
the Sponsor at the time of the Successor Property Trustee's acceptance of
its appointment as Property Trustee that:
(a) The Property Trustee is a New York banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws
of New York, with trust 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 Property Trustee of
the Declaration has been duly authorized by all necessary corporate action
on the part of the Property Trustee. The Declaration has been duly executed
and delivered by the Property Trustee and constitutes a legal, valid and
binding obligation of the Property Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the
court (regardless of whether the enforcement of such remedies is considered
in a proceeding in equity or at law);
(c) The execution, delivery and performance of the Declaration by the
Property Trustee does not conflict with or constitute a breach of the
Articles of Organization or By-laws of the Property 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 Property Trustee of this
Declaration; and
74
(e) The Property Trustee, pursuant to this Declaration, shall hold legal
title to, and a valid ownership interest on behalf of the Holders of the
Trust Securities, in the Partnership Preferred Securities and agrees that,
except as expressly provided or contemplated by this Agreement, it will not
create, incur or assume, or suffer to exist any mortgage, pledge,
hypothecation, encumbrance, lien or other charge or security interest upon
the Partnership Preferred Securities.
SECTION 14.2 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
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 Delaware corporation with, 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 Delaware Trustee has been authorized to perform its obligations
under the Certificate of Trust and the Declaration. The Declaration, under
Delaware law, constitutes a legal, valid and binding obligation of the
Delaware Trustee, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, reorganization, moratorium, insolvency,
and other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of whether
the enforcement of such remedies is considered in a proceeding in equity or
at law);
(c) No consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee of the
Declaration; and
(d) The Delaware Trustee is an entity which has its principal place of
business in the State of Delaware.
75
ARTICLE XV
MISCELLANEOUS
SECTION 15.1 Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust
may give notice of to the Holders of the Trust Securities):
MERRILL LYNCH PREFERRED CAPITAL TRUST
c/o Merrill Lynch & Co., Inc.
World Financial Center
South Tower
225 Liberty Street
New York, New York 10080-6105
Attention: Treasurer
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as the Delaware Trustee may give notice of to
the other Trustees):
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
Attention: John J. Cashin
Senior Trust Officer
(c) if given to the Property Trustee, at its Corporate Trust Office to
the attention of James Heaney, Vice President (or such other address as the
Property Trustee may give notice of to the Holders of the Trust Securities
and the other Trustee)
(d) if given to the Holder of the Trust Common Securities, at the
mailing address of the Sponsor set forth below (or such other address as the
Holder of the Trust Common Securities may give notice of to the Trust):
76
MERRILL LYNCH PREFERRED CAPITAL TRUST
c/o Merrill Lynch & Co., Inc.
World Financial Center
South Tower
225 Liberty Street
New York, New York 10080-6105
Attention: Treasurer
(e) if given to any other Holder, at the address set forth on the books
and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no
notice was given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.
SECTION 15.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be governed
by and construed in accordance with the internal laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
SECTION 15.3 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 15.4 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 15.5 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.
77
SECTION 15.6 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.
ECTION 15.7 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 and a duly authorized officer of the Sponsor 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.
78
IN WITNESS WHEREOF, each of the undersigned has caused these presents to be
executed as of the day and year first above written.
----------------------------------
Theresa Lang, as Regular Trustee
----------------------------------
Stanley Schaefer, as Regular Trustee
CHASE MANHATTAN BANK DELAWARE,
as Delaware Trustee
By:
------------------------------
Name: John H. Cashin
Title: Senior Trust Officer
THE CHASE MANHATTAN BANK,
as Property Trustee
By:
------------------------------
Name: James Heaney
Title: Vice President
MERRILL LYNCH & CO., INC.,
as Sponsor
By:
------------------------------
Name: Theresa Lang
Title: Senior Vice President
and Treasurer
79
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
This Trust Preferred Security is a Global Certificate within the meaning
of the Declaration hereinafter referred to and is registered in the name of
The Depository Trust Company (the "Depositary") or a nominee of the
Depositary. This Trust Preferred Security is exchangeable for Trust Preferred
Securities registered in the name of a person other than the Depositary or
its nominee only in the limited circumstances described in the Declaration
and no transfer of this Trust Preferred Security (other than a transfer of
this Trust Preferred Security as a whole by the Depositary to a nominee of
the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary) may be registered except in limited circumstances.
Unless this Trust Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York), a New York corporation, to the Trust or its agent for registration of
transfer, exchange or payment, and any Trust Preferred Security issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of the Depositary and any payment hereon is made to
Cede & Co. or such other entity as is requested by an authorized representative
of the Depositary, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
---------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Trust
Preferred Security Certificate to:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- ------------------------------------------------------------- agent to transfer
this Trust Preferred Security Certificate on the books of the Trust. The agent
may substitute another to act for him or her.
Date:
---------------------------------
Signature:
----------------------------
(Sign exactly as your name appears on the other side of this Trust Preferred
Security Certificate)
A1-1
TP-1 [ ]
CUSIP NO.
CERTIFICATE EVIDENCING TRUST PREFERRED SECURITIES
of
MERRILL LYNCH PREFERRED CAPITAL TRUST
% Trust Preferred Securities
(liquidation amount $25 per Trust Preferred Security)
MERRILL LYNCH PREFERRED CAPITAL TRUST , a statutory business
trust formed under the laws of the State of Delaware (the "Trust"), hereby
certifies that Cede & Co. (the "Holder") is the registered owner of
preferred securities of the Trust representing undivided beneficial ownership
interests in the assets of the Trust designated the % Trust Preferred
Securities (liquidation amount $25 per Trust Preferred Security) (the "Trust
Preferred Securities"). The Trust Preferred Securities are freely
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, powers, privileges,
restrictions, preferences and other terms and provisions of the Trust
Preferred Securities represented hereby are set forth in, issued under and
shall in all respects be subject to the provisions of the Amended and
Restated Declaration of Trust dated as of , 1998, as the same may
be amended from time to time (the "Declaration"). Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration.
The Holder is entitled to the benefits of the Trust Preferred Securities
Guarantee to the extent provided therein. Each Holder of a Trust Preferred
Security, by acceptance of this Certificate and each Certificate owner, by
acquisition of a beneficial interest in a Certificate, agrees to treat the
Debentures, and any other Affiliate Investment Instruments that are treated
as debt instruments by the relevant Investment Affiliate and by the
Partnership, as indebtedness for United States federal income tax purposes.
The Sponsor will provide a copy of the Declaration, the Trust Preferred
Securities Guarantee and the Limited Partnership Agreement to a Holder
without charge upon written request to the Trust at its principal place of
business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
A1-2
IN WITNESS WHEREOF, the Trust has executed this certificate this
day of , 1998.
MERRILL LYNCH PREFERRED
CAPITAL TRUST
-------------------------------------------
Name: Theresa Lang,
as Regular Trustee
(See reverse for additional terms)
A1-3
CERTIFICATE OF AUTHENTICATION
This is the Trust Preferred Security described in the within-mentioned
Declaration.
THE CHASE MANHATTAN BANK,
as Trustee
By:
-----------------------------------------
Authorized Signatory
A1-4
[FORM OF REVERSE OF SECURITY]
Holders of Trust Preferred Securities shall be entitled to receive
cumulative cash distributions at a rate per annum of % of the stated
liquidation amount of $25 per Trust Preferred Security. Distributions on the
Trust Preferred Securities shall, from the date of original issue, accumulate
and be cumulative and shall be payable quarterly only to the extent that the
Trust has funds available for the payment of such distributions in the
Property Account. Distributions not paid on the scheduled payment date will
accumulate and compound quarterly (to the extent permitted by applicable law)
at the rate of % per annum. The term "Distributions" as used herein shall
mean ordinary cumulative distributions in respect of each Fiscal Period
together with any such Compounded Distributions. Amounts available to the
Trust for distribution to the holders of the Trust Preferred Securities will
be limited to payments received by the Trust from the Partnership on the
Partnership Preferred Securities or from the Company on the Partnership
Guarantee. Distributions on the Partnership Preferred Securities will be paid
only if, as and when declared in the sole discretion of the Company, as the
General Partner of the Partnership. If and to the extent that the Partnership
makes a distribution on the Partnership Preferred Securities held by the
Property Trustee or the Company makes a payment under the Partnership
Guarantee (the amount of any such partnership distribution, including any
compounded partnership distributions or guarantee payment being a "Payment
Amount"), the Trust shall and the Property Trustee is directed, to the extent
funds are available for that purpose, to make a Pro Rata Distribution of the
Payment Amount to Holders.
The amount of Distributions payable for any period will be computed
for any full quarterly Distribution period on the basis of a 360-day year of
twelve 30-day months, and for any period shorter than a full quarterly
Distribution period on the basis of the actual number of days elapsed in a
90-day quarter.
Except as otherwise described herein, distributions on the Trust
Preferred Securities will be cumulative, will accumulate from the date of
initial issuance and will be payable quarterly in arrears, on March 30, June
30, September 30 and December 30 of each year, commencing on 30, 1998,
if, as and when available for payment by the Property Trustee. If the Trust
Preferred Securities (or, if the Trust is liquidated, the Partnership
Preferred Securities) are in book-entry-only form, Distributions will be
payable to the Holders of record of Trust Preferred Securities as they appear
on the books and records of the Trust on the relevant record dates, which
will be one Business Day prior to the relevant payment dates. If the Trust
Preferred
A1-5
Securities (or, if the Trust is liquidated, the Partnership Preferred
Securities) do not remain in book-entry-only form, the relevant record dates
shall be the 15th day of the month of the relevant payment dates. In the
event that any date on which distributions are payable is not a Business Day,
payment of such Distribution shall be made on the next succeeding day which
is a Business Day (without any interest or other payment in respect of any
such delay) except that, if such Business Day falls in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, with the same force and effect as if made on such date.
Payments of accumulated Distributions will be payable to Holders of record of
Trust Preferred Securities as they appear on the books and records of the
Trust on the record date with respect to the payment date for the Trust
Preferred Securities which corresponds to the payment date fixed by the
Partnership with respect to the payment of cumulative distributions on the
Partnership Preferred Securities.
The Trust Preferred Securities shall be redeemable as provided in
the Declaration.
A1-6
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
CS-1 [ ]
Certificate Evidencing Trust Common Securities
of
MERRILL LYNCH PREFERRED CAPITAL TRUST
% Trust Common Securities
(liquidation amount $25 per Trust Common Security)
MERRILL LYNCH PREFERRED CAPITAL TRUST , a statutory business trust
formed under the laws of the State of Delaware (the "Trust"), hereby
certifies that Merrill Lynch & Co., Inc., a Delaware corporation (the
"Holder") is the registered owner of common securities of the Trust
representing undivided beneficial ownership interests in the assets of the
Trust designated the % Trust Common Securities (liquidation amount $25 per
Trust Common Security) (the "Trust Common Securities"). The designation,
rights, powers, privileges, restrictions, preferences and other terms and
provisions of the Trust Common Securities represented hereby are set forth
in, issued under and shall in all respects be subject to the provisions of
the Amended and Restated Declaration of Trust dated as of , 1998,
as the same may be amended from time to time (the "Declaration"). Capitalized
terms used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Trust Common
Securities Guarantee to the extent provided therein. Each Holder of a Trust
Common Security, by acceptance of this Certificate, agrees to treat the
Debentures, and any other Affiliate Investment Instruments that are treated
as debt instruments by the relevant Investment Affiliate and by the
Partnership, as indebtedness for United States federal income tax purposes.
The Sponsor will provide a copy of the Declaration, the Trust Common
Securities Guarantee and the Limited Partnership Agreement to a Holder
without charge upon written request to the Sponsor at its principal place of
business. THE TRUST COMMON SECURITIES ARE TRANSFERABLE ON THE BOOKS AND
RECORDS OF THE TRUST ONLY IN ACCORDANCE WITH THE TERMS OF THE DECLARATION.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trust has executed this certificate this
day of , 1998.
MERRILL LYNCH PREFERRED
CAPITAL TRUST
--------------------------------------------
Theresa Lang,
as Regular Trustee
(See reverse for additional terms)
A2-2
CERTIFICATE OF AUTHENTICATION
This is the Trust Common Security described in the within-mentioned
Declaration.
THE CHASE MANHATTAN BANK,
as Trustee
By:
-----------------------------------------
Authorized Signatory
A2-3
[FORM OF REVERSE OF SECURITY]
Holders of Trust Common Securities shall be entitled to receive
cumulative cash distributions at a rate per annum of % of the stated
liquidation amount of $25 per Trust Common Security. Distributions on the
Trust Common Securities shall, from the date of original issue, accumulate
and be cumulative and shall be payable quarterly only to the extent that the
Trust has funds available for the payment of such distributions in the
Property Account. Distributions not paid on the scheduled payment date will
accumulate and compound quarterly (to the extent permitted by applicable law)
at the rate of % per annum. The term "Distributions" as used herein shall
mean ordinary cumulative distributions in respect of each Fiscal Period
together with any such Compounded Distributions. Amounts available to the
Trust for distribution to the holders of the Trust Common Securities will be
limited to payments received by the Trust from the Partnership on the
Partnership Preferred Securities or from the Company on the Partnership
Guarantee. Distributions on the Partnership Preferred Securities will be paid
only if, as and when declared in the sole discretion of the Company, as the
General Partner of the Partnership. If and to the extent that the Partnership
makes a distribution on the Partnership Preferred Securities held by the
Property Trustee or the Company makes a payment under the Partnership
Guarantee (the amount of any such partnership distribution, including any
compounded partnership distributions or guarantee payment being a "Payment
Amount"), the Trust shall and the Property Trustee is directed, to the extent
funds are available for that purpose, to make a Pro Rata Distribution of the
Payment Amount to Holders.
The amount of Distributions payable for any period will be computed
for any full quarterly Distribution period on the basis of a 360-day year of
twelve 30-day months, and for any period shorter than a full quarterly
Distribution period on the basis of the actual number of days elapsed in a
90-day quarter.
Except as otherwise described herein, distributions on the Trust
Common Securities will be cumulative, will accumulate from the date of
initial issuance and will be payable quarterly in arrears, on March 30,
June 30, September 30 and December 30 of each year, commencing on ,
1998 if, as and when available for payment by the Property Trustee.
Distributions will be payable to the Holders of record of Trust Common
Securities as they appear
A2-4
on the books and records of the Trust on the relevant record dates, which
will be one Business Day prior to the relevant payment dates. In the event
that any date on which distributions are payable is not a Business Day,
payment of the Distribution shall be made on the next succeeding day which is
a Business Day (without any interest or other payment in respect of any such
delay) except that, if such Business Day falls in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date. Payments of accumulated Distributions will be payable to Holders of
record of Trust Common Securities as they appear on the books and records of
the Trust on the record date with respect to the payment date for the Trust
Common Securities which corresponds to the payment date fixed by the
Partnership with respect to the payment of cumulative distributions on the
Partnership Preferred Securities.
The Trust Common Securities shall be redeemable as provided in the
Declaration.
A2-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Trust
Common Security Certificate to:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints -----------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------agent to transfer
this Trust Common Security Certificate on the books of the Trust. The agent
may substitute another to act for him or her.
Date:------------------------------
Signature:-------------------------
(Sign exactly as your name appears on the other side of this Trust Common
Security Certificate)
A2-6