Exhibit 4.14
AMENDED AND RESTATED DECLARATION OF TRUST
KeySpan Trust __
Dated as of ____________ __, ____
CROSS REFERENCE TABLE*
Section of Trust
Indenture Act of Section of
1939, as amended Agreement
- ---------------- ---------
310(a)..........................................................................................................6.3
310(b)...............................................................................................6.3(c); 6.3(d)
310(c).................................................................................................Inapplicable
311(a).......................................................................................................2.2(b)
311(b).......................................................................................................2.2(b)
311(c).................................................................................................Inapplicable
312(a).......................................................................................................2.2(a)
312(b).......................................................................................................2.2(b)
312(c).................................................................................................Inapplicable
313(a)..........................................................................................................2.3
313(b)..........................................................................................................2.3
313(c)..........................................................................................................2.3
313(d)..........................................................................................................2.3
314(a)..........................................................................................................2.4
314(b).................................................................................................Inapplicable
314(c)..........................................................................................................2.5
314(d).................................................................................................Inapplicable
314(e)..........................................................................................................2.5
314(f).................................................................................................Inapplicable
315(a)..............................................................................................3.9(b); 3.10(a)
315(b).......................................................................................................2.7(a)
315(c).......................................................................................................3.9(a)
315(d).......................................................................................................3.9(b)
316(a)..........................................................................................2.6; 7.5(b); 7.6(c)
316(b).................................................................................................Inapplicable
316(c).................................................................................................Inapplicable
317(a).........................................................................................................3.16
317(b).................................................................................................Inapplicable
318(a).......................................................................................................2.1(c)
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*This Cross-Reference Table does not
constitute part of the Agreement and shall
not have any bearing upon the interpretation
of any of its terms or provisions.
Table of Contents
Page
ARTICLE 1 INTERPRETATION AND DEFINITIONS.........................................................................12
Code 2
Commission...............................................................................................2
Common Securities Holder.................................................................................3
Common Security..........................................................................................3
Common Security Certificate..............................................................................3
Corporate Trust Office...................................................................................3
Covered Person...........................................................................................3
Debenture Issuer.........................................................................................3
Debenture Issuer Indemnified Person......................................................................3
Debenture Trustee........................................................................................3
Debentures...............................................................................................3
Depositary...............................................................................................3
Depositary Participant...................................................................................3
Direct Action............................................................................................3
Distribution.............................................................................................3
Exchange Act.............................................................................................3
Fiduciary Indemnified Person.............................................................................4
Fiscal Year..............................................................................................4
Global Security..........................................................................................4
Guarantee................................................................................................4
Holder...................................................................................................4
Indemnified Person.......................................................................................4
Indenture................................................................................................4
Indenture Event of Default...............................................................................4
Investment Company.......................................................................................4
Investment Company Act...................................................................................4
Investment Company Event.................................................................................4
Legal Action.............................................................................................4
List of Holders..........................................................................................4
Majority in Liquidation Amount...........................................................................5
New York Stock Exchange..................................................................................5
Officers' Certificate....................................................................................5
Paying Agent.............................................................................................5
Payment Amount...........................................................................................5
Person...................................................................................................5
Preferred Security.......................................................................................5
Preferred Security Certificate...........................................................................5
Property Account.........................................................................................6
Property Trustee.........................................................................................6
Pro Rata.................................................................................................6
Quorum...................................................................................................6
Redemption/Distribution Notice...........................................................................6
Redemption Price.........................................................................................6
Regular Trustee..........................................................................................6
Related Party............................................................................................6
Responsible Officer......................................................................................6
Rule 3a-5................................................................................................6
Securities...............................................................................................6
Securities Act...........................................................................................6
Special Event............................................................................................6
Sponsor..................................................................................................6
Successor Entity.........................................................................................7
Successor Property Trustee...............................................................................7
Successor Security.......................................................................................7
Super Majority...........................................................................................7
Tax Event................................................................................................7
10% in Liquidation Amount................................................................................7
Treasury Regulations.....................................................................................7
Trust....................................................................................................7
Trust Enforcement Event..................................................................................7
Trust Indenture Act......................................................................................7
Trustee..................................................................................................7
ARTICLE 2 TRUST INDENTURE ACT.....................................................................................8
SECTION 2.1. Trust Indenture Act; Application..........................................................8
SECTION 2.2. Lists of Holders of Securities............................................................8
SECTION 2.3. Reports by the Property Trustee...........................................................9
SECTION 2.4. Periodic Reports to the Property Trustee..................................................9
SECTION 2.5. Evidence of Compliance with Conditions Precedent..........................................9
SECTION 2.6. Trust Enforcement Events; Waiver..........................................................9
SECTION 2.7. Trust Enforcement Event; Notice..........................................................11
ARTICLE 3 ORGANIZATION...........................................................................................11
SECTION 3.1. Name and Organization....................................................................11
SECTION 3.2. Office...................................................................................12
SECTION 3.3. Purpose..................................................................................12
SECTION 3.4. Authority................................................................................12
SECTION 3.5. Title to Property of the Trust...........................................................13
SECTION 3.6. Powers and Duties of the Regular Trustees................................................13
SECTION 3.7. Prohibition of Actions by the Trust and the Trustees.....................................15
SECTION 3.8. Powers and Duties of the Property Trustee................................................16
SECTION 3.9. Certain Duties and Responsibilities of the Property Trustee..............................18
SECTION 3.10. Certain Rights of Property Trustee......................................................20
SECTION 3.11. Delaware Trustee........................................................................22
SECTION 3.12. Execution of Documents..................................................................23
SECTION 3.13. Not Responsible for Recitals or Issuance of Securities..................................23
SECTION 3.14. Duration of Trust.......................................................................23
SECTION 3.15. Mergers.................................................................................23
SECTION 3.16. Property Trustee May File Proofs of Claim...............................................25
ARTICLE 4 SPONSOR................................................................................................26
SECTION 4.1. Responsibilities of the Sponsor..........................................................26
SECTION 4.2. Indemnification and Fees and Expenses of the Trustees....................................26
ARTICLE 5 TRUST COMMON SECURITIES HOLDER.........................................................................27
SECTION 5.1. Debenture Issuer's Receipt of Common Securities..........................................27
SECTION 5.2. Covenants of the Common Securities Holder................................................27
ARTICLE 6 TRUSTEES...............................................................................................27
SECTION 6.1. Number of Trustees.......................................................................27
SECTION 6.2. Delaware Trustee; Eligibility............................................................28
SECTION 6.3. Property Trustee; Eligibility............................................................28
SECTION 6.4. Qualifications of Regular Trustees and Delaware Trustee Generally........................29
SECTION 6.5. Initial Regular Trustees.................................................................29
SECTION 6.6. Appointment, Removal and Resignation of Trustees.........................................29
SECTION 6.7. Vacancies Among Trustees.................................................................31
SECTION 6.8. Effect of Vacancies......................................................................31
SECTION 6.9. Meetings.................................................................................31
SECTION 6.10. Delegation of Power.....................................................................31
SECTION 6.11. Merger, Conversion, Consolidation or Succession to Business.............................32
ARTICLE 7 TERMS OF SECURITIES....................................................................................32
SECTION 7.1. General Provisions Regarding Securities..................................................32
SECTION 7.2. Distributions............................................................................34
SECTION 7.3. Redemption of Securities.................................................................35
SECTION 7.4. Redemption Procedures....................................................................36
SECTION 7.5. Voting Rights of Preferred Securities....................................................37
SECTION 7.6. Voting Rights of Common Securities.......................................................39
SECTION 7.7. Paying Agent.............................................................................40
SECTION 7.8. Listing..................................................................................41
SECTION 7.9. Transfer of Securities...................................................................41
SECTION 7.10. Mutilated, Destroyed, Lost or Stolen Certificates.......................................42
SECTION 7.11. Deemed Security Holders.................................................................42
SECTION 7.12. Global Securities.......................................................................42
ARTICLE 8 DISSOLUTION AND TERMINATION OF TRUST...................................................................45
SECTION 8.1. Dissolution and Termination of Trust.....................................................45
SECTION 8.2. Liquidation Distribution Upon Dissolution of the Trust...................................46
ARTICLE 9 LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, DELAWARE TRUSTEES OR OTHERS..........................46
SECTION 9.1. Liability................................................................................46
SECTION 9.2. Exculpation..............................................................................47
SECTION 9.3. Fiduciary Duty...........................................................................47
SECTION 9.4. Outside Businesses.......................................................................51
ARTICLE 10 ACCOUNTING............................................................................................51
SECTION 10.1. Fiscal Year.............................................................................51
SECTION 10.2. Certain Accounting Matters..............................................................51
SECTION 10.3. Banking.................................................................................52
SECTION 10.4. Withholding.............................................................................52
ARTICLE 11 AMENDMENTS AND MEETINGS...............................................................................53
SECTION 11.1. Amendments..............................................................................53
SECTION 11.2. Meetings of the Holders of Securities; Action by Written Consent........................55
ARTICLE 12 REPRESENTATIONS OF PROPERTY TRUSTEE AND GUARANTEE TRUSTEE.............................................56
SECTION 12.1. Representations and Warranties of the Property Trustee..................................56
SECTION 12.2. Representations and Warranties of the Delaware Trustee..................................57
ARTICLE 13 MISCELLANEOUS.........................................................................................58
SECTION 13.1. Notices.................................................................................58
SECTION 13.2. Governing Law...........................................................................59
SECTION 13.3. Intention of the Parties................................................................59
SECTION 13.4. Headings................................................................................59
SECTION 13.5. Successors and Assigns..................................................................59
SECTION 13.6. Partial Enforceability..................................................................59
SECTION 13.7. Counterparts............................................................................59
EXHIBITS
Exhibit A Form of Preferred Security Certificate
Exhibit B Form of Common Security Certificate
AMENDED AND RESTATED DECLARATION OF TRUST
THIS AMENDED AND RESTATED DECLARATION OF TRUST
("Declaration"), dated as of _______ __, ____, by and among KEYSPAN CORPORATION,
a New York corporation, as Sponsor, and Ronald S. Jendras, Richard A. Rapp and
Michael J. Taunton as the initial Regular Trustees, JPMorgan Chase Bank, as the
initial Property Trustee and Chase Manhattan Bank USA, National Association, as
the the initial Delaware Trustee, not in their individual capacities but solely
as Trustees, and the holders, from time to time, of undivided beneficial
ownership interests in the Trust to be issued pursuant to this Declaration.
WHEREAS, the Trustees and the Sponsor established KeySpan
Trust __ (the "Trust"), a business trust under the Business Trust Act (as
defined, together with other capitalized terms, herein) pursuant to a
Declaration of Trust dated as of ____________, 2001, (the "Original
Declaration") and a Certificate of Trust (the "Certificate of Trust") filed with
the Secretary of State of the State of Delaware on ____________, 2001; and
WHEREAS, the sole purpose of the Trust shall be to issue
certain securities representing undivided beneficial ownership interests in the
assets of the Trust, in exchange for the Debentures issued by the Debenture
Issuer and to engage in only those activities necessary or incidental thereto;
and.
WHEREAS, the parties hereto, 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 hereby declare that all assets contributed to the Trust 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 1
INTERPRETATION AND DEFINITIONS
------------------------------
SECTION 1.1. Interpretation and Definitions.
- ------------------------------------------------
Unless the context otherwise requires:
(a) capitalized terms used in this Declaration but not defined in the
preamble above have the meanings assigned to them in this Section 1.1; a
term defined anywhere in this Declaration has the same meaning throughout;
(b) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(c) all references in this Declaration to Articles, Sections, Recitals
and Exhibits are to Articles and Sections of, or Recitals and Exhibits to,
this Declaration unless otherwise specified;
(d) unless otherwise defined in this Declaration, a term defined in
the Trust Indenture Act has the same meaning when used in this Declaration;
and
(e) a reference to the singular includes the plural and vice versa and
a reference to any masculine form of a term shall include the feminine form
of a term, as applicable.
(f) the following terms have the following meanings:
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Beneficial Owners" means, for Preferred Securities
represented by a Global Security, the Person who acquires an interest in the
Preferred Securities which is reflected on the records of the Depositary through
the Depositary Participants.
"Business Day" means any day, other than a Saturday or Sunday,
that is not a day on which banking institutions in the Borough of Manhattan, The
City of New York are authorized or required by law, regulation or executive
order to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from
time to time, or any successor legislation.
"Certificate" means a Common Security Certificate or a
Preferred Security Certificate.
"Certificate of Trust" has the meaning specified in the
Recitals hereto.
"Closing Date" means the date on which the Preferred
Securities are issued and sold.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation. A reference to a specific
section of the Code refers not only to such specific section but also to any
corresponding provision of any federal tax statute enacted after the date of
this Declaration, as such specific section or corresponding provision is in
effect on the date of application of the provisions of this Declaration
containing such reference.
"Commission" means the Securities and Exchange Commission.
"Common Securities Holder" means KeySpan Corporation, in its
capacity as purchaser and holder of all of the Common Securities issued by the
Trust.
"Common Security" has the meaning specified in Section 7.1
"Common Security Certificate" means a definitive certificate
in fully registered form representing a Common Security, substantially in the
form of Exhibit B hereto.
"Corporate Trust Office" means the principal office of the
Property Trustee at which at any particular time its corporate trust business
shall be administered, which office at the date of execution of this Declaration
is located at 450 West 33rd Street, 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.
"Debenture Issuer" means KeySpan Corporation, in its capacity
as issuer of the Debentures under the Indenture.
"Debenture Issuer Indemnified Person" means (a) any Regular
Trustee; (b) any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Regular Trustee or any Affiliate thereof; or (d) any officer, employee or agent
of the Trust or its Affiliates.
"Debenture Trustee" means JPMorgan Chase Bank, in its capacity
as trustee under the Indenture until a successor is appointed thereunder, and
thereafter means such successor trustee.
"Debentures" means the series of junior subordinated debt
securities to be issued by the Debenture Issuer under the Indenture and held by
the Property Trustee.
"Delaware Trustee" has the meaning specified in Section 6.2.
"Depositary" means, with respect to Securities issuable in
whole or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary for
such Securities.
"Depositary Participant" means a member of, or participant in,
the Depositary.
"Direct Action" has the meaning specified in Section 3.8(e).
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 7.2.
"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 9.4(b).
"Fiscal Year" has the meaning specified in Section 10.1.
"Global Security" means a fully registered, global Preferred
Security Certificate.
"Guarantee" means the Guarantee Agreement, dated as of _______
__, ____, of the Sponsor in respect of the Securities.
"Holder" means any holder of Securities, as registered on the
books and records of the Trust; provided, however, that in determining whether
the Holders of the requisite liquidation amount of Preferred Securities have
voted on any matter provided for in this Declaration, then for the purpose of
such determination only (and not for any other purpose hereunder), if the
Preferred Securities remain in the form of one or more Global Securities and if
the Depositary which is the holder of such Global Securities has sent an omnibus
proxy to the Trust assigning voting rights to Depositary Participants to whose
accounts the Preferred Securities are credited on the record date, the term
"Holders" shall mean such Depositary Participants acting at the direction of the
Beneficial Owners.
"Indemnified Person" means a Debenture Issuer Indemnified
Person or a Fiduciary Indemnified Person.
"Indenture" means the Indenture, dated as of _______ __, 2002,
between the Debenture Issuer and JPMorgan Chase Bank, as Trustee, and as amended
and supplemented by any indenture supplement thereto pursuant to which the
Debentures are to be issued by the Property Trustee.
"Indenture Event of Default" has the meaning given to the term
"Event of Default" in the Indenture.
"Investment Company" means an investment company as defined in
the Investment Company Act and the regulations promulgated thereunder.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Investment Company Event" means the receipt by the Trust of
an opinion of a nationally recognized independent counsel, to the effect that,
as a result of the occurrence of a change in law or regulation or a written
change in interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority (a "Change in 1940 Act
Law"), there is more than an insubstantial risk that the Trust is or will be
considered an "investment company" which is required to be registered under the
Investment Company Act, which Change in 1940 Act Law becomes effective on or
after the Closing Date.
"Legal Action" has the meaning specified in Section 3.6(g).
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount" means, except as provided in
the terms of the Preferred Securities or by the Trust Indenture Act, Holder(s)
of outstanding Securities, voting together as a single class, or, as the context
may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities, voting separately as a class, who are the record
owners of more than 50% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accumulated and unpaid Distributions to the date upon which the voting
percentages are determined) of all outstanding Securities of the relevant class.
"New York Stock Exchange" means the New York Stock Exchange,
Inc. or any successor thereto.
"Officers' Certificate" means, with respect to any Person, a
certificate signed on behalf of such Person by two Authorized Officers of such
Person. Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Declaration shall include:
(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 on behalf of such Person 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
on behalf of such Person 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 acting on
behalf of such Person, such condition or covenant has been complied with;
provided, that the term "Officers' Certificate", when used with reference to
Regular Trustees who are natural persons shall mean a certificate signed by two
of the Regular Trustees which otherwise satisfies the foregoing requirements.
"Paying Agent" has the meaning specified in Section 3.8(h).
"Payment Amount" has the meaning specified in Section 7.2(c).
"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" has the meaning specified in Section 7.1.
"Preferred Security Certificate" means a definitive
certificate in fully registered form representing a Preferred Security,
substantially in the form of Exhibit A.
"Property Account" has the meaning specified in Section
3.8(c).
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 6.3.
"Pro Rata" means pro rata to each Holder of Securities
according to the aggregate liquidation amount of the Securities held by the
relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding.
"Quorum" means a majority of the Regular Trustees or, if there
are only two Regular Trustees, both of them.
"Redemption/Distribution Notice" has the meaning specified in
Section 7.4(a) hereto.
"Redemption Price" means the amount for which the Securities
will be redeemed, which amount will equal (i) the redemption price paid by the
Debenture Issuer to repay or redeem, in whole or in part, the Debentures held by
the Trust which shall include accumulated and unpaid Distributions on such
Securities through the date of their redemption or (ii) such lesser amount as
will be received by the Trust in respect of the Debentures so repaid or
redeemed.
"Regular Trustee" means any Trustee other than the Property
Trustee and the Delaware Trustee.
"Related Party" means, with respect to the Sponsor, any direct
or 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 Property
Trustee, any officer with direct responsibility for the administration of this
Declaration and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act
or any successor rule thereunder.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Special Event" means a Tax Event or an Investment Company Event.
"Sponsor" means KeySpan Corporation, a New York corporation,
or any successor entity in a merger, consolidation, amalgamation or replacement
by or conveyance, transfer or lease of its properties substantially as an
entirety, in its capacity as sponsor of the Trust.
"Successor Entity" has the meaning specified in Section
3.15(b)(i).
"Successor Property Trustee" has the meaning specified in
Section 6.6(b).
"Successor Security" has the meaning specified in Section
3.15(b)(i)b.
"Super Majority" has the meaning specified in Section
2.6(a)(ii).
"Tax Event" means the receipt by the Trust of an opinion of
independent tax counsel experienced in such matters, to the effect that, as a
result of (a) any 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, or (b) any official
administrative pronouncement, action or judicial decision interpreting or
applying such laws or regulations, which such amendment or change becomes
effective or proposed change, pronouncement, action or decision is announced on
or after the Closing Date, there is more than an insubstantial risk that (i) the
Trust is, or will be within 90 days of the date of such opinion, subject to the
United States federal income tax with respect to income received or accrued on
the Debentures, (ii) interest payable by the Debenture Issuer on the Debentures
is not, or within 90 days of the date of such opinion, will not be, deductible
by the Debenture Issuer, in whole or in part, for United States federal income
tax purposes, or (iii) the Trust is, or will be within 90 days of the date of
such opinion, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
"10% in Liquidation Amount" means, except as provided in the
terms of the Preferred Securities or by the Trust Indenture Act, Holder(s) of
outstanding Securities, voting together as a single class, or, as the context
may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities, voting separately as a class, who are the record
owners of 10% or more of the aggregate liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus
accumulated and unpaid Distributions to the date upon which the voting
percentages are determined) of all outstanding 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, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trust" has the meaning specified in the Recitals hereto.
"Trust Enforcement Event" in respect of the Securities means
an Indenture Event of Default has occurred and is continuing in respect of the
Debentures.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue as a trustee 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.
ARTICLE 2
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 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 Trust's classification as a grantor trust for United States federal
income tax purposes.
SECTION 2.2. Lists of Holders of Securities.
------------------------------------------------
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide the Property Trustee (i), except while the Preferred Securities are
represented by one or more Global Securities, at least five Business Days prior
to the 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
Securities ("List of Holders") as of the record date relating to the payment of
such Distributions and (ii) at any other time, within 30 days of receipt by the
Trust of a written request from the Property Trustee for a List of Holders as of
a date no more than 15 days before such List of Holders is given to the Property
Trustee; 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. 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, and shall be
entitled to the benefits of, Sections 311(a), 311(b) and 312(b) of the Trust
Indenture Act.
SECTION 2.3. Reports by the Property Trustee.
-------------------------------------------------
Within 60 days after May 15 of each year (commencing with the
year of the first anniversary of the issuance of the Preferred Securities), the
Property Trustee shall provide to the Holders of the 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 the 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 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, if any, provided for in this Declaration that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6. Trust Enforcement Events; Waiver.
--------------------------------------------------
(a) The Holders of a Majority in Liquidation Amount of the Preferred Securities
may, by vote or written consent, on behalf of the Holders of all of the
Preferred Securities, waive any past Trust Enforcement Event in respect of the
Preferred Securities and its consequences, provided that, if the underlying
Indenture Event of Default:
(i) is not waivable under the Indenture, the Trust Enforcement Event
under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of the Holders of greater than a
majority in principal amount of the Debentures (a "Super Majority") to be
waived under the Indenture, the related Trust Enforcement Event under the
Declaration may only be waived by the vote or written consent of the
Holders of at least the proportion in liquidation amount of the Preferred
Securities that the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding;
provided, however, that despite the fact that holders of
Preferred Securities are entitled to vote or consent under the circumstances
described above, any of the trust preferred securities that are owned at the
time by KeySpan or any Affiliate of KeySpan, will not be entitled to vote or
consent. Instead, these Preferred Securities will be treated as if they were not
outstanding.
The foregoing provisions of this Section 2.6(a) shall be in
lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this
Declaration and the Securities, as permitted by the Trust Indenture Act. Upon
such waiver, any such default shall cease to exist, and any Trust Enforcement
Event with respect to the Preferred Securities arising therefrom shall be deemed
to have been cured, for every purpose of this Declaration and the Preferred
Securities, but no such waiver shall extend to any subsequent or other Trust
Enforcement Event with respect to the Preferred Securities or impair any right
consequent thereon. Any waiver by the Holders of the Preferred Securities of a
Trust Enforcement Event with respect to the Preferred Securities shall also be
deemed to constitute a waiver by the Holders of the Common Securities of any
such Trust Enforcement Event with respect to the Common Securities for all
purposes of this Declaration without any further act, vote, or consent of the
Holders of the Common Securities.
(b) The Holders of a Majority in Liquidation Amount of the Common
Securities may, by vote or written consent, on behalf of the Holders of all of
the Common Securities, waive any past Trust Enforcement Event in respect of the
Common Securities and its consequences, provided that, if the underlying
Indenture Event of Default:
(i) is not waivable under the Indenture, except where the Holders of
the 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 the Declaration shall also not be waivable;
or
(ii) requires the consent or vote of a Super Majority to be waived
under the Indenture, except where the Holders of the 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
the Declaration may only be waived by the vote or written consent of the
Holders of at least the proportion in liquidation amount of the Common
Securities that the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
any Trust Enforcement Event and all Trust Enforcement Events with respect to the
Common Securities and the consequences thereof until all Trust Enforcement
Events with respect to the Preferred Securities have been cured, waived or
otherwise eliminated, and until such Trust Enforcement Events with respect to
the Preferred Securities 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 Preferred Securities and only the Holders of the Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms of
the Securities. The foregoing provisions of this Section 2.6(b) shall be in lieu
of Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby
expressly excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act. Subject to the foregoing provisions of this Section 2.6(b),
upon such cure, waiver or other elimination, any such default shall cease to
exist and any Trust Enforcement Event with respect to the Common Securities
arising therefrom shall be deemed to have been cured for every purpose of this
Declaration, but no such waiver shall extend to any subsequent or other Trust
Enforcement Event with respect to the Common Securities or impair any right
consequent thereon.
(c) A waiver of an Indenture Event of Default by the Property Trustee at the
direction of the Holders of the Preferred Securities constitutes a waiver of the
corresponding Trust Enforcement Event with respect to the Preferred Securities
under this Declaration. The foregoing provisions of this Section 2.6(c) shall be
in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this
Declaration and the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7. Trust Enforcement Event; Notice.
-------------------------------------------------
(a) 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 Securities, notices of all defaults with respect to the
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(a) being hereby defined to be an
Indenture Event of Default, not including any periods of grace provided for
therein and irrespective of the giving of any notice provided therein); provided
that, except for a default in the payment of principal of (or premium, if any)
or interest on any of the Debentures, the Property Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the Property
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 501(1) and 501(2) of the Indenture; or
(ii) any default as to which the Property Trustee shall have received
written notice or of which a Responsible Officer of the Property Trustee
charged with the administration of this Declaration shall have actual
knowledge.
ARTICLE 3
ORGANIZATION
------------
SECTION 3.1. Name and Organization.
---------------------------------------
The Trust hereby continued is named "KeySpan Trust __" as such
name may be modified from time to time by the Regular Trustees following written
notice to the Holders of Securities, the Property Trustee and the Delaware
Trustee. 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
KeySpan Corporation, One Metrotech Center, Brooklyn, New York 11201. On 10
Business Days' written notice to the Holders of Securities, the Property Trustee
and the Delaware Trustee, the Regular Trustees may designate another principal
office.
SECTION 3.3. Purpose.
-------------------------
The exclusive purposes and functions of the Trust are (a) to
issue Securities in exchange for the Debentures, and (b) except as otherwise
limited herein, to engage in only those other activities necessary or incidental
thereto. The Trust shall not borrow money, issue debt or reinvest proceeds
derived from investments, pledge any of its assets or otherwise undertake (or
permit to be undertaken) any activity that would cause the Trust to be
classified as other than a grantor trust for United States federal income tax
purposes.
By the acceptance of this Trust, the Trustees, the Sponsor,
the Holders of the Preferred Securities and Common Securities and the Preferred
Securities Beneficial Owners agree to treat the Trust as a grantor trust for
United States federal income tax purposes and not to take any position that is
contrary to such classification.
SECTION 3.4. Authority.
---------------------------
Subject to the limitations provided in this Declaration and to
the specific duties of the Property Trustee, the Regular Trustees shall have
exclusive authority to carry out the purposes of the Trust. An action taken by
the Regular Trustees in accordance with their powers shall constitute the act of
and serve to bind the Trust and an action taken by the 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.
(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(b), provided, that the registration statements 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; and
(c) A 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 purposes of signing any documents which the Regular Trustees have power
and authority to cause the Trust to execute pursuant to Section 3.6.
SECTION 3.5. Title to Property of the Trust.
-------------------------------------------------
Except as provided in Section 3.8 with respect to the
Debentures 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 establish the terms and form of the Preferred Securities and the
Common Securities in the manner specified in Section 7.1 and issue and exchange
the Preferred Securities and the Common Securities in accordance with this
Declaration; provided, however, that the Trust may issue no more than one series
of Preferred Securities and no more than one series of Common Securities, and,
provided further, that there shall be no interests in the Trust other than the
Securities, and the issuance of Securities shall be limited to a one-time,
simultaneous issuance of both Preferred Securities and Common Securities on the
Closing Date;
(b) in connection with the issue of the Preferred Securities, at the
direction of the Sponsor, to:
(i) execute and file an application, prepared by the Sponsor, to the
New York Stock Exchange or any other national stock exchange or the NASDAQ
Stock Market for listing of any Preferred Securities, the Guarantee and the
Debentures;
(ii) execute and file with the Commission one or more registration
statements on the applicable forms prepared by the Sponsor, including any
amendments thereto, pertaining to the Preferred Securities, the Guarantee
and the Debentures;
(iii) execute and file any documents prepared by the Sponsor, or take
any acts as determined by the Sponsor to be necessary, in order to qualify
or register all or part of the Preferred Securities in any State in which
the Sponsor has determined to qualify or register such Preferred Securities
for sale; and
(iv) negotiate the terms of and execute and enter into an underwriting
agreement and other related agreements providing for the sale of the
Preferred Securities;
(c) to acquire the Debentures in exchange for the issuance of the Preferred
Securities and the Common Securities; provided, however, that the Regular
Trustees shall cause legal title to the Debentures to be held of record in the
name of the Property Trustee for the benefit of the Holders of the Preferred
Securities and the Holders of the Common Securities;
(d) to give the Sponsor and the Property Trustee prompt written notice of
the occurrence of a Special Event; provided that the Regular Trustees shall
consult with the Sponsor and the Property Trustee before taking or refraining
from taking any action in relation to any such 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 Preferred Securities and Holders of Common Securities
as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of the
Regular Trustees pursuant to the terms of this Declaration and the Securities;
(g) 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(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) subject to Section 6.10, to employ or otherwise engage employees and
agents (who may be designated as officers with titles) and managers,
contractors, advisors and consultants to conduct only those services that the
Regular Trustees have authority to conduct directly, and to pay reasonable
compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) 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;
(k) to incur expenses that are necessary or incidental to carry out any of
the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and transfer
agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities of any
notice received from the Debenture Issuer of its election to defer payments of
interest on the Debentures by extending the interest payment period under the
Debentures as authorized by the Indenture;
(n) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Preferred
Securities and the Holders of the Common Securities or to enable the Trust to
effect the purposes for which the Trust was created;
(o) to take any action, not inconsistent with applicable law, that the
Regular Trustees determine in their discretion to be necessary or desirable in
carrying out the purposes and functions of the Trust as set out in Section 3.3
or 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 Investment Company Act;
(ii) causing the Trust to be classified as a grantor trust for United
States federal income tax purposes; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes.
(p) 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;
and
(q) 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.
The Regular Trustees shall 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 have no
power to, and 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 Debenture Issuer.
SECTION 3.7. Prohibition of Actions by the Trust and the Trustees.
----------------------------------------------------------------------
(a) The Trust shall not, and none of the Trustees (including the Property
Trustee) shall cause the Trust to, engage in any activity other than as required
or authorized by this Declaration. In particular, the Trust shall not and none
of the Trustees (including the Property Trustee) shall cause the Trust to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of Securities
pursuant to the terms of this Declaration and of the Securities;
(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;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets;
(vi) possess any power or otherwise act in such a way as to vary the
terms of the Securities in any way whatsoever (except to the extent
expressly authorized in this Declaration or by the terms of the
Securities);
(vii) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities;
(viii) other than as provided in this Declaration or by the terms of
the Securities, (A) direct the time, method and place of exercising any
trust or power conferred upon the Debenture Trustee with respect to the
Debentures, (B) waive any past default that is waivable under the
Indenture, (C) exercise any right to rescind or annul any declaration that
the principal of all the Debentures shall be due and payable, or (D)
consent to any amendment, modification or termination of the Indenture or
the Debentures where such consent shall be required unless the Trust shall
have received an opinion of counsel to the effect that such modification
will not cause more than an insubstantial risk that the Trust will be
deemed an Investment Company required to be registered under the Investment
Company Act, or the Trust will be classified as other than a grantor trust
for United States federal income tax purposes;
(ix) take any action inconsistent with the status of the Trust as a
grantor trust for United States federal income tax purposes; or
(x) revoke any action previously authorized or approved by vote of the
Holders of the Preferred Securities.
SECTION 3.8. Powers and Duties of the Property Trustee.
-----------------------------------------------------------
(a) The legal title to the Debentures shall be owned by and held of record
in the name of the Property Trustee in trust for the benefit of the Trust and
the Holders of the Securities. The right, title and interest of the Property
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Property Trustee in accordance with Section 6.6. Such
vesting and cessation of title shall be effective whether or not conveyancing
documents with regard to the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and interest
in the Debentures 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 Securities
and, upon the receipt of payments of funds made in respect of the
Debentures held by the Property Trustee, deposit such funds into the
Property Account and make payments to the Holders of the Preferred
Securities and Holders of the Common Securities from the Property Account
in accordance with Section 7.2. 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 the rating on whose long-term unsecured indebtedness is at
least equal to the rating assigned to the Preferred Securities by a
"nationally recognized statistical rating organization", within the meaning
of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Preferred Securities and the
Common Securities to the extent the Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as so directed and as shall be necessary or
appropriate to effect the distribution of the Debentures to Holders of
Securities upon the occurrence of a 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
this Declaration and the 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; provided however,
that if a Trust Enforcement Event has occurred and is continuing and such event
is attributable to the failure of the Debenture Issuer to pay interest,
principal or other required payments on the Debentures on the date such
interest, principal or other required payments are otherwise payable (or in the
case of redemption, on the redemption date), then a Holder of Preferred
Securities may directly institute a proceeding against the Debenture Issuer for
enforcement of payment to such Holder of the principal of or interest on
Debentures having a principal amount equal to the aggregate liquidation amount
of the Preferred Securities of such Holder (a "Direct Action") on or after the
respective due date specified in the Debentures.
(f) 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 Securities pursuant to the terms
of the Securities; or
(ii) a Successor Property Trustee has been appointed and has accepted
that appointment in accordance with Section 6.6.
(g) The Property Trustee shall have the legal power to exercise all of the
rights, powers and privileges of a holder of Debentures under the Indenture and,
if a Trust Enforcement Event actually known to a Responsible Officer of the
Property Trustee occurs and is continuing, the Property Trustee shall, for the
benefit of Holders of the Securities, enforce its rights as holder of the
Debentures subject to the rights of the Holders pursuant to the terms of such
Securities.
(h) 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 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.
(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 shall 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 have no
power to, and 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 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
(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) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it without negligence, in good faith
in accordance with the direction of the Holders of not less than a Majority
in Liquidation Amount of the Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the Property
Trustee, or exercising any trust or power conferred upon the Property
Trustee under this 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 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 Debentures 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 limitations 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
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Property Trustee shall not be liable for any interest on any
money received by it except as it may otherwise agree with the Sponsor.
Money held by the Property Trustee need not be segregated from other funds
held by it except in relation to the Property 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
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;
(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 of its choice or
other experts and the advice or opinion of such counsel and experts with
respect to legal matters or advice within the scope of such experts' area
of expertise shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion, such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include any of its
employees. The 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 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; provided that, nothing contained in this
Section 3.10(a) shall be taken to relieve the Property Trustee, upon the
occurrence of an 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 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; provided that
such agent, custodian, nominee or attorney is a U.S. person as defined in
Section 7701(a)(30) of the Code;
(ix) any action taken by the Property Trustee or its agents hereunder
shall bind the Trust and the Holders of the Securities, and the signature
of the Property Trustee or its agents alone shall be sufficient and
effective to perform any such action and no third party shall be required
to inquire as to the authority of the Property Trustee to so act or as to
its compliance with any of the terms and provisions of this 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
Securities which instructions may only be given by the Holders of the same
proportion in liquidation amount of the Securities as would be entitled to
direct the Property Trustee under the terms of the Securities in respect of
such remedy, right or action, (ii) may refrain from enforcing such remedy
or right or taking such other action until such instructions are received,
and (iii) shall be protected in conclusively relying on or acting in or
accordance with such instructions;
(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;
(xii) the Property Trustee shall not be liable for any action taken,
suffered or omitted to be taken by it without negligence, in good faith and
reasonably believed by it to be authorized or within the discretion, rights
or powers conferred upon it by this Declaration;
(xiii) without prejudice to any other rights available to the Property
Trustee under applicable law, when the Property Trustee incurs expenses or
renders services in connection with a bankruptcy , such expenses (including
the fees and expenses of its counsel) and the compensation for such
services are intended to constitute expenses of administration under any
bankruptcy law or law relating to creditors rights generally;
(xiv) the Property Trustee shall not be charged with knowledge of a
Trust Enforcement Event unless a Responsible Officer of the Property
Trustee obtains actual knowledge of such event or the Property Trustee
receives written notice of such event from Holders holding more than a
Majority in Liquidation Amount of the Preferred Securities; and
(xv) any action taken by the Property Trustee or its agents hereunder
shall bind the Trust and the Holders of such Securities, and the signature
of the Property Trustee or one of its agents shall by itself 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.
(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 available to the Property Trustee shall be
construed to be a duty.
SECTION 3.11. Delaware Trustee.
----------------------------------
Notwithstanding any other 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. In the event the Delaware Trustee shall
at any time be required to take any action or perform any duty hereunder with
respect to the Trust, the Delaware Trustee shall be entitled to all of the same
rights as the Property Trustee listed in Section 3.9(b) and Section 3.10.
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 execute pursuant to Section 3.6;
provided that, the registration statements referred to in Section 3.6(b)(ii),
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 Securities.
------------------------------------------------------------------------
The recitals contained in this Declaration and the Securities
shall be taken as the statements of the Sponsor, and the Trustees do not assume
any responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Declaration, the Securities, the Debentures or the Indenture.
SECTION 3.14. Duration of Trust.
-----------------------------------
The Trust shall exist until terminated pursuant to the
provisions of Article 8 hereof.
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 corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, at the request of the Sponsor and with the consent of
the Regular Trustees or, if there are more than two, a majority of the Regular
Trustees and without the consent of the Holders of the Securities, the Delaware
Trustee or the Property Trustee, consolidate, amalgamate, merge with or into, or
be replaced by or convey, transfer or lease its properties substantially as an
entirety to a trust organized as such under the laws of any State; provided,
that:
(i) if the Trust is not the successor, such successor entity (the
"Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust with
respect to the Securities; or
(B) substitutes for the Preferred Securities other securities having
substantially the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank
the same as the Preferred Securities rank in priority with
respect to Distributions and payments upon liquidation,
redemption and otherwise;
(ii) the Debenture Issuer expressly appoints a trustee of such
Successor Entity that possesses the same powers and duties as the Property
Trustee as the holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities are listed,
or any Successor Securities will be listed upon notification of issuance,
on any national securities exchange or with any other or organization on
which the Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Preferred Securities
(including any Successor Securities) to be downgraded by any nationally
recognized statistical rating organization;
(v) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights, preferences and
privileges of the Holders of the Preferred Securities (including any
Successor Securities) in any material respect;
(vi) such Successor Entity has a purpose identical to that of the
Trust;
(vii) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease the Sponsor has received an opinion of
independent counsel to the Trust experienced in such matters to the effect
that:
(A) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the
rights, preferences and privileges of the Holders of the
Preferred Securities (including any Successor Securities) in any
material respect;
(B) following such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease neither the Trust nor the Successor
Entity will be required to register as an Investment Company; and
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to
be classified as a grantor trust for United States federal income
tax purposes;
(viii) the Sponsor or any permitted successor or assignee owns all of
the Common Securities and guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided by
the Securities Guarantee; and
(ix) such Successor Entity expressly assumes all of the obligations of
the Trust with respect to the Trustees.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with the
consent of Holders of 100% in aggregate liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by or convey,
transfer or lease its properties and assets substantially as an entirety to, any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it, if such consolidation, amalgamation, merger,
replacement, conveyance, transfer or lease would cause the Trust or Successor
Entity to be classified as other than a grantor trust for United States federal
income tax purposes and each Holder of the Securities not to be treated as
owning an undivided interest in the Debentures.
SECTION 3.16. Property Trustee May File Proofs of Claim.
-----------------------------------------------------------
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other similar judicial proceeding relative to the Trust or any other obligor
upon the Securities or the property of the Trust or of such other obligor or
their creditors, the Property Trustee (irrespective of whether any Distributions
on the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any Distributions
owing and unpaid in respect of the Securities (or, if the Securities are
original issue discount Securities, such portion of the liquidation amount as
may be specified in the terms of such Securities) and to file such other papers
or documents as may be necessary or advisable in order to have the claims of the
Property Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Property Trustee, its and counsel) and of the
Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the
Property Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement adjustment or compensation
affecting the Securities or the rights of any Holder thereof or to authorize the
Property Trustee to vote in respect of the claim of any Holder in any such
proceeding.
ARTICLE 4
SPONSOR
-------
SECTION 4.1. Responsibilities of the Sponsor.
-------------------------------------------------
In connection with the issue and sale of the Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare for filing by the Trust with the Commission one or more
registration statements on the applicable forms, including any amendments
thereto, pertaining to the Preferred Securities, the Guarantee and the
Debentures;
(b) to determine the States in which to take appropriate action to qualify
or register for sale all or part of the Preferred Securities and to do any and
all such acts, other than actions which must be taken by the Trust, and advise
the Trust of actions it must take, and prepare for execution and filing any
documents to be executed and filed by the Trust, as the Sponsor deems necessary
or advisable in order to comply with the applicable laws of any such States;
(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 Stock Market for
listing upon notice of issuance of any Preferred Securities, the Guarantee and
the Debentures; and
(d) to negotiate the terms of an underwriting agreement and other related
agreements providing for the sale of the Preferred Securities.
SECTION 4.2. Indemnification and Fees and Expenses of the Trustees.
------------------------------------------------------------------------
The Sponsor, in its capacity as Debenture Issuer, 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 5
TRUST COMMON SECURITIES HOLDER
------------------------------
SECTION 5.1. Debenture Issuer's Receipt of Common Securities.
-----------------------------------------------------------------
On the Closing Date, the Debenture Issuer will receive all of
the Common Securities and all of the Preferred Securities issued by the Trust in
exchange for the Debentures issued to the Trust by the Debenture Issuer. The
Common Securities will be issued in an amount equal to at least 3% of the
capital of the Trust.
The aggregate stated liquidation amount of Common Securities
outstanding at any time shall not be less than 3% of the capital of the Trust.
SECTION 5.2. Covenants of the Common Securities Holder.
-----------------------------------------------------------
For so long as the Preferred Securities remain outstanding,
the Common Securities Holder will covenant (i) to maintain, directly or
indirectly, 100% ownership of the 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 Investment Company Act, and (iv) to take
no action which would be reasonably likely to cause the Trust to be classified
as other than a grantor trust for United States federal income tax purposes.
ARTICLE 6
TRUSTEES
--------
SECTION 6.1. Number of Trustees.
------------------------------------
The number of Trustees initially shall be five, and:
(a) at any time before the issuance of any Securities, the Sponsor may, by
written instrument, increase or decrease the number of Trustees;
(b) after the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the Holders of a Majority in Liquidation
Amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities or by written consent in lieu of such meeting; provided
that the number of Trustees shall be at least three; and provided further that
all Trustees shall be U.S. Persons as defined in Section 7701(a)(30) of the Code
and (1) the Delaware Trustee shall be (i) in the case of a natural person, a
person who is a resident of the State of Delaware or (ii) 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; (2) at least
one Regular Trustee is an employee or officer of, or is affiliated with, the
Sponsor; 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 Trustee may also serve as Delaware Trustee if it meets the
applicable requirements; and
(c) at all times, either or both of the Property Trustee or the Delaware
Trustee must be (i) a bank as defined in Section 581 of the Code or (ii) a U.S.
government-owned agency or U.S. government sponsored enterprise.
SECTION 6.2. Delaware Trustee; Eligibility.
-----------------------------------------------
If required by the Business Trust Act, one Trustee (which may
be the Property Trustee) (the "Delaware Trustee") shall be either:
(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 shall also be the Delaware Trustee and Section 3.11
shall have no application.
SECTION 6.3. Property Trustee; Eligibility.
-----------------------------------------------
(a) There shall at all times be one Trustee (which may be the Delaware
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 other Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust owners, 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 6.6(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 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. In
determining whether the Trustee has a conflicting interest as defined in Section
310(b) of the Trust Indenture Act with respect to the Securities of any series,
there shall be excluded all series of securities issuable under the Indenture,
dated as of _________, 2002, between KeySpan Corporation, as issuer, and
JPMorgan Chase Bank, as trustee.
(d) The Guarantee shall be deemed to be specifically described in this
Declaration for purposes of clause (i) of the first proviso contained in Section
310(b) of the Trust Indenture Act.
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. Initial Regular Trustees.
------------------------------------------
The initial Regular Trustees shall be:
Ronald S. Jendras, Richard A. Rapp and Michael J. Taunton, the business
address of all of whom is c/o KeySpan Corporation, One Metrotech Center,
Brooklyn, New York 11201.
SECTION 6.6. Appointment, Removal and Resignation of Trustees.
------------------------------------------------------------------
(a) Subject to Section 6.6(b), Trustees may be appointed or removed without
cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor;
(ii) after the issuance of any Securities, by vote of the Holders of a
Majority in Liquidation Amount of the Common Securities voting as a class
at a meeting of the Holders of the Common Securities; and
(iii) after the issuance of the Preferred Securities and the
occurrence of an Indenture Event of Default, by vote of the Holders of a
majority in Liquidation Amount of the Preferred Securities.
(b) The Trustee that acts as Property Trustee shall not be removed in
accordance with Section 6.6(a) until a successor Trustee possessing the
qualifications to act as Property Trustee under Section 6.3(a) (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. The Trustee
that acts as Delaware Trustee shall not be removed in accordance with
Section 6.6(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 or its
successor shall have been appointed, until his death or its dissolution or
until his or its 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 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.
(d) The Holders of the 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 6.6.
(e) If no Successor Property Trustee or Successor Delaware Trustee, as the
case may be, shall have been appointed and accepted appointment as provided in
this Section 6.6 within 60 days after delivery to the Sponsor and the Trust of
an instrument of resignation or removal, the resigning or removed 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, as applicable. Such court may thereupon, after prescribing
such notice, if any, as it may deem proper, appoint a Successor Property Trustee
or Successor Delaware Trustee, as the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable for the acts or
omissions to act of any Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
SECTION 6.7. Vacancies Among Trustees.
------------------------------------------
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 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 6.6.
SECTION 6.8. Effect of Vacancies.
-------------------------------------
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to 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 6.6, the Regular Trustees in
office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
SECTION 6.9. 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 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. In the event there is only one Regular Trustee,
any and all action of such Regular Trustee shall be evidenced by a written
consent of such Regular Trustee.
SECTION 6.10. Delegation of Power.
-------------------------------------
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any natural person over the age of 21 his, her or
its power for the purpose of executing any documents contemplated in Section 3.6
or making any governmental filing; provided that such person is a U.S. Person as
defined in Section 7701(a)(30) of the Code.
(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.
SECTION 6.11. Merger, Conversion, Consolidation or Succession to Business.
--------------------------------------------------------------------------
Any corporation into which the Property Trustee, the Delaware
Trustee or any Regular Trustee that is not a natural person may be merged or
converted or with such Trustee may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of such Trustee shall be the successor of such Trustee hereunder,
provided 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 7
TERMS OF SECURITIES
-------------------
SECTION 7.1. General Provisions Regarding 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.
(i) Preferred Securities. The Preferred Securities of the Trust have
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 $__ per Preferred Security. The
Preferred Securities are hereby designated for identification purposes only
as ___% Preferred Securities (the "Preferred Securities"). The Preferred
Security Certificates evidencing the Preferred Securities shall be
substantially in the form of Exhibit A to this Declaration, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice or to conform to the rules of any stock
exchange on which the Preferred Securities are listed or quoted.
(ii) Common Securities. The Common Securities of the Trust have an
aggregate liquidation amount with respect to the assets of the Trust of
_____________ dollars ($_____________) and a liquidation amount with
respect to the assets of the Trust of $__ per Common Security. The Common
Securities are hereby designated for identification purposes only as ___%
Common Securities (the "Common Securities" and, together with the Preferred
Securities, the "Securities"). The Common Security Certificates evidencing
the Common Securities shall be substantially in the form of Exhibit B to
the Declaration, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice.
(b) Payment of Distributions on, and payment of the Redemption Price upon a
redemption of, the Preferred Securities and the Common Securities, as
applicable, shall be made Pro Rata based on the liquidation amount of such
Preferred Securities and Common Securities; provided, however, that if on any
date on which amounts payable on distribution or redemption an Indenture Event
of Default shall have occurred and be continuing, no payment of any Distribution
on, or Redemption Price of, any of the Common Securities, and no other payment
on account of the redemption, liquidation or other acquisition of such Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions on all of the outstanding Preferred Securities for all
Distribution periods terminating on or prior thereto, or, in the case of amounts
payable on redemption, the full amount of the Redemption Price for all of the
outstanding Preferred Securities then called for redemption, shall have been
made or provided for, and all funds available to the Property Trustee shall
first be applied to the payment in full in cash of all Distributions on, or the
Redemption Price of, the Preferred Securities then due and payable. The Trust
shall issue no securities or other interests in the assets of the Trust other
than the Preferred Securities and the Common Securities.
(c) The Certificates shall be signed on behalf of the Trust by a Regular
Trustee. Such signature shall be the manual or facsimile signature of any
present or any future Regular Trustee. In case a Regular Trustee of the Trust
who shall have signed any of the Certificates shall cease to be such Regular
Trustee before the Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the person who signed such
Certificates had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Certificate, shall be the Regular Trustees of the Trust,
although at the date of the execution and delivery of the Declaration any such
person was not such a Regular Trustee. 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 Securities may be listed, or to conform to usage.
A Certificate representing Preferred Securities 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 such
Certificate has been authenticated under this Declaration.
Upon a written order of the Trust signed by one Regular
Trustee, the Property Trustee shall authenticate the Certificates representing
Preferred Securities for original issue. The aggregate number of Preferred
Securities outstanding at any time shall not exceed the liquidation amount set
forth in Section 7.1(a)(i).
The Property Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Certificates. An authenticating agent
may authenticate Certificates 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
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(e) Upon issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable beneficial ownership interests in the assets of the Trust.
(f) Every Person, by virtue of having become a Holder or a Preferred Security
Beneficial Owner in accordance with the terms of this Declaration, shall be
deemed to have expressly assented and agreed to the terms of, and shall be bound
by, this Declaration and the terms of the Securities, the Guarantee, the
Indenture and the Debentures.
(g) The holders of the Securities shall have no preemptive rights.
SECTION 7.2. Distributions.
-------------------------------
(a) As owners of undivided beneficial ownership interests in the
Debentures, holders of Securities shall be entitled to receive cumulative cash
Distributions at the rate per annum of ____% of the stated liquidation amount of
$__ per Security. Pursuant to the Indenture, interest on the Debentures, and as
a result, Distributions payable for any period shall be computed on the basis of
a 360-day year of twelve 30-day months. The amount of distributions payable for
any period shorter than a full quarterly distribution period shall be computed
on the basis of a 30-day month and for periods of less than a month, the actual
number of days elapsed per 30-day month. Subject to Section 7.1(b),
Distributions shall be made on the Preferred Securities and the Common
Securities on a Pro Rata basis. Pursuant to the Indenture, interest on the
Debentures, and as a result distributions on the Securities shall, from the date
of original issue, accrue and be cumulative and shall be payable [semiannually]
[quarterly], in arrears, on each [___________ __, ___________ __, ___________ __
and ___________ __], commencing ___________ __, ____, when, as and if available
for payment, by the Property Trustee, except as otherwise described below.
Distributions are payable only to the extent that payments are made in respect
of the Debentures held by the Property Trustee and to the extent that the Trust
has funds available for the payment of such Distributions in the Property
Account.
(b) Interest on the Debentures not paid on the scheduled payment date will
accrue and compound [semiannually] [quarterly] at the rate of ____% per annum
and, as a result Distributions on the Securities not paid on the scheduled
payment date will accumulate and compound at a rate of __% per annum
("Compounded Distributions"). "Distributions" shall mean ordinary cumulative
distributions together with any Compounded Distributions.
(c) If and to the extent that the Debenture Issuer makes a payment of
interest, premium and/or principal on the Debentures held by the Property
Trustee (the amount of any such payment being a "Payment Amount"), the Property
Trustee shall and is directed, to the extent funds are available for that
purpose, to make a Pro Rata distribution of the Payment Amount to Holders,
subject to Section 7.1(b).
(d) Distributions on the Securities shall be payable to the Holders thereof
as they appear on the register of the Trust as of the close of business on the
relevant record dates. While the Preferred Securities are represented by one or
more Global Securities, the relevant record dates shall be the close of business
on the Business Day next preceding such Distribution payment date, unless a
different regular record date is established or provided for the corresponding
interest payment date on the Debentures. The relevant record dates for the
Common Securities shall be the same as for the Preferred Securities. If the
Preferred Securities shall not continue to remain represented by one or more
Global Securities, the relevant record dates for the Preferred Securities shall
be selected by the Regular Trustees and shall be at least one Business Day prior
to the relevant payment dates. At all times, the Distribution payment dates
shall correspond to the interest payment dates on the Debentures. Distributions
payable on any Securities that are not punctually paid on any Distribution
payment date, as a result of the Debenture Issuer having failed to make a
payment under the Debentures, shall cease to be payable to the Person in whose
name such Securities are registered on the relevant record date, and such
defaulted Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other specified date
determined in accordance with this Declaration. If any date on which
Distributions are payable on the Securities is not a Business Day, then payment
of the Distribution payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, with the same force and effect as if made on such payment date.
(e) In the event that there is any money or other property held by or for
the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata among the Holders of the Securities.
SECTION 7.3. Redemption of Securities.
------------------------------------------
(a) Upon the repayment or redemption, in whole or in part, of the
Debentures held by the Trust, whether at the stated maturity of the Debentures
or upon earlier redemption as provided in the Indenture, the proceeds from such
repayment or redemption shall be simultaneously applied Pro Rata to redeem
Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so repaid or redeemed at the Redemption
Price. Holders shall be given not less than 30 nor more than 60 days notice of
such redemption in accordance with Section 7.4.
(b) On the date fixed for any distribution of Debentures, upon dissolution
of the Trust, (i) the Securities will no longer be deemed to be outstanding and
(ii) certificates representing Securities will be deemed to represent the
Debentures having an aggregate principal amount equal to the stated liquidation
amount of, and bearing accrued and unpaid distributions equal to accumulated and
unpaid distributions on, such Securities until such certificates are presented
to the Sponsor or its agent for transfer or reissuance.
SECTION 7.4. Redemption Procedures.
---------------------------------------
(a) Notice of any redemption of, or notice of distribution of Debentures in
exchange for, the Securities (a "Redemption/Distribution Notice"), which notice
shall be irrevocable, will be given by the Trust by mail to each Holder of
Securities to be redeemed or exchanged not fewer than 30 nor more than 60 days
before the date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Debentures. For
purposes of the calculation of the date of redemption or exchange and the dates
on which notices are given pursuant to this Section 7.4(a), a
Redemption/Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, to Holders of
Securities. Each Redemption/Distribution Notice shall be addressed to the
Holders of Securities at the address of each such Holder appearing in the
register 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) If fewer than all the outstanding Securities are to be so redeemed, the
Common Securities and the Preferred Securities will be redeemed Pro Rata
(subject to Section 7.1(b)) and the Preferred Securities to be redeemed will be
redeemed as described in Section 7.4 below. The Trust may not redeem the
Securities in part unless all accumulated and unpaid Distributions to the date
of redemption have been paid in full on all Securities then outstanding. For all
purposes of this Declaration, unless the context otherwise requires, all
provisions relating to the redemption of Preferred Securities shall relate, in
the case of any Preferred Security redeemed or to be redeemed only in part, to
the portion of the aggregate liquidation amount of Preferred Securities which
has been or is to be redeemed.
(c) Subject to the Trust's fulfillment of the notice requirements set forth
in Section 7.4(a) above, if Securities are to be redeemed, then (i) with respect
to Preferred Securities represented by one or more Global Securities, by 12:00
noon, New York City time, on the redemption date (provided that the Debenture
Issuer has paid the Property Trustee a sufficient amount of cash in connection
with the related redemption or maturity of the Debentures), the Property Trustee
will deposit irrevocably with the Depositary or its nominee (or successor
Clearing Agency or its nominee) funds sufficient to pay the applicable
Redemption Price with respect to the Preferred Securities and will give the
Depositary irrevocable instructions and authority to pay the Redemption Price to
the Holders of the Preferred Securities and (ii) with respect to Securities not
represented by one or more Global Securities (provided that the Debenture Issuer
has paid the Property Trustee a sufficient amount of cash in connection with the
related redemption or maturity of the Debentures), the Paying Agent will pay the
relevant Redemption Price to the Holders of such Securities by check mailed to
the address of the relevant Holder appearing on the register of the Trust on the
redemption date. If any date fixed for redemption of Securities is not a
Business Day, then payment of the Redemption Price payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay) except that, if such Business Day
falls in the next calendar year, such payment will be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date fixed for redemption. If payment of the Redemption Price in respect
of any Securities is not paid because the payment of the Redemption Price on the
Debentures is not made, interest will continue to accrue on the Debentures, and,
as a result, Distributions on such 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. If a
Redemption/Distribution Notice shall have been given and funds deposited or paid
as required, then immediately prior to the close of business on the date of such
deposit or payment, Distributions will cease to accumulate on the Securities
called for redemption and all rights of Holders of such Securities so called for
redemption will cease, except the right of the Holders to receive the Redemption
Price, but without interest on such Redemption Price, and from and after the
date fixed for redemption, such Securities will cease to be outstanding.
Neither the Regular Trustees nor the Trust shall be required
to register or cause to be registered the transfer of any Securities that have
been called for redemption, except in the case of any Securities being redeemed
in part, any portion thereof not to be redeemed.
(d) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Debenture Issuer or its
subsidiaries may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or by private agreement.
SECTION 7.5. Voting Rights of Preferred Securities.
-------------------------------------------------------
(a) Except as provided under Section 11.1 and this Article 7 and as
otherwise required by the Business Trust Act, the Trust Indenture Act and other
applicable law, the Holders of the Preferred Securities shall have no voting
rights.
(b) Subject to the requirement of the Property Trustee obtaining a tax
opinion in certain circumstances set forth in Section 7.5(d) below, the Holders
of a Majority in Liquidation Amount of the Preferred Securities voting
separately as a class have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee, or
to direct the exercise of any trust or power conferred upon the Property Trustee
under the Declaration, including the right to direct the Property Trustee, as
Holder of the Debentures, to (i) exercise the remedies available to it under the
Indenture as a Holder of the Debentures; (ii) consent to any amendment or
modification of the Indenture or the Debentures where such consent shall be
required or (iii) waive any past default and its consequences that is waivable
under Section 513 of the Indenture; provided, however, that if an Indenture
Event of Default has occurred and is continuing, then the Holders of 25% of the
aggregate liquidation amount of the Preferred Securities may direct the Property
Trustee to declare the principal of and interest on the Debentures due and
payable; provided, further, that where a consent or action under the Indenture
would require the consent or act of the Holders of more than a majority of the
aggregate principal amount of Debentures affected thereby, only the Holders of
the percentage of the aggregate stated liquidation amount of the Preferred
Securities which is at least equal to the percentage required under the
Indenture may direct the Property Trustee to give such consent to take such
action.
(c) If the Property Trustee fails to enforce its rights under the
Debentures after a Holder of Preferred Securities has made a written request,
such Holder of Preferred Securities may, to the extent permitted by applicable
law, institute a legal proceeding directly against the Debenture Issuer to
enforce the Property Trustee's rights under the Indenture without first
instituting any legal proceeding against the Property Trustee or any other
person or entity. In addition, if a Trust Enforcement Event has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to make any interest, principal or other required payments when due under the
Indenture, then a Holder of Preferred Securities may directly institute a Direct
Action against the Debenture Issuer on or after the respective due date
specified in the Debentures.
(d) The Property Trustee shall notify all Holders of the Preferred
Securities of any notice of any Indenture Event of Default received from the
Debenture Issuer with respect to the Debentures. Such notice shall state that
such Indenture Event of Default 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 7.5(b)(i) and (ii) above unless the
Property Trustee has obtained an opinion of independent tax counsel to the
effect that the Trust will not be classified as an association or publicly
traded partnership taxable as a corporation for United States federal income tax
purposes as a result of such action.
(e) In the event the consent of the Property Trustee, as the Holder of the
Debentures, is required under the Indenture with respect to any amendment or
modification of the Indenture, the Property Trustee shall request the direction
of the Holders of the Securities with respect to such amendment or modification
and shall vote with respect to such amendment or modification as directed by not
less than 66-2/3% of the aggregate liquidation amount of the Securities voting
together as a single class; provided, however, that where a consent under the
Indenture would require the consent of the Holders of more than 66-2/3% of the
aggregate principal amount of the Debentures, 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 Securities. The Property Trustee
shall not take any such action in accordance with the directions of the Holders
of the Securities unless the Property Trustee has obtained an opinion of
independent tax counsel to the effect that the Trust will not be classified as
an association or publicly traded partnership taxable as a corporation for
United States federal income tax purposes as a result of such action.
(f) A waiver of an Indenture Event of Default with respect to the
Debentures will constitute a waiver of the corresponding Trust Enforcement
Event.
(g) Any required approval or direction of Holders of Preferred Securities
may be given at a separate meeting of Holders of Preferred Securities convened
for such purpose, at a meeting of all of the Holders of Securities or pursuant
to written consent. The Regular Trustees shall cause a notice of any meeting at
which Holders of 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 Preferred Securities. Each such notice shall
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 Preferred Securities shall be
required for the Trust to redeem and cancel Preferred Securities or distribute
Debentures in accordance with this Declaration and the terms of the Securities.
(i) Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Securities that are owned at such time by the Debenture Issuer, any Regular
Trustee or any entity directly or indirectly controlled by, or under direct or
indirect common control with, the Debenture Issuer or any Trustee, shall not be
entitled to vote or consent and shall, for purposes of such vote or consent, be
treated as if such Securities were not outstanding.
(j) Subject to Section 7.5(k), Holders of the Preferred Securities shall
have no rights to appoint or remove the Trustees, who may be appointed, removed
or replaced solely by the Common Securities Holder.
(k) If an Indenture Event of Default has occurred and is continuing, the
Trustees may be removed at such time only by a Majority in Liquidation Amount of
the Preferred Securities.
SECTION 7.6. Voting Rights of Common Securities.
----------------------------------------------------
(a) Except as provided under Section 6.1(b), this Section 7.6 or Section
11.1 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
Common Securities will have no voting rights.
(b) Subject to Section 7.5(k), the Holders of the Common Securities shall
be entitled, in accordance with Article VI of this 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 and only after all Trust Enforcement Events with
respect to the 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 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 this Declaration, including the
right to direct the Property Trustee, as Holder of the Debentures, to (i)
exercise the remedies available to it under the Indenture as a Holder of the
Debentures, (ii) consent to any amendment or modification of the Indenture or
the Debentures where such consent shall be required or (iii) waive any past
default and its consequences that is waivable under Section 513 of the
Indenture; provided, however, that where a consent or action under the Indenture
would require the consent or act of the Holders of more than a majority of the
aggregate principal amount of Debentures affected thereby, only the Holders of
the percentage of the aggregate stated liquidation amount of the Common
Securities which is at least equal to the percentage required under the
Indenture may direct the Property Trustee to have 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 7.6(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 be classified as other than a
grantor trust.
(d) If the Property Trustee fails to enforce its rights under the
Debentures after a Holder of Common Securities has made a written request, such
Holder of Common Securities may, to the extent permitted by applicable law,
directly institute a legal proceeding directly against the Debenture Issuer to
enforce the Property Trustee's rights under the Debentures without first
instituting any legal proceeding against the Property Trustee or any other
person or entity.
(e) A waiver of an Indenture Event of Default with respect to the
Debentures will constitute a waiver of the corresponding Trust Enforcement
Event.
(f) Any required approval or direction of Holders of Common Securities may
be given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Common Securities are entitled to vote, or of any matter on which
action by written consent of such Holders is to be taken, to be mailed to each
Holder of record of Common Securities. Each such notice will include a statement
setting forth 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.
(g) No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
Debentures in accordance with the Declaration and the terms of the Securities.
SECTION 7.7. Paying Agent.
------------------------------
In the event that any 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 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 the Holders. 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 Property Trustee shall initially act as Paying Agent for the
Securities. In the event the Property Trustee shall no longer be the Paying
Agent, the Regular Trustees shall appoint a successor (which shall be a bank or
trust company acceptable to the Debenture Issuer) to act as Paying Agent. The
Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written
notice to the Property Trustee and the Debenture Issuer.
SECTION 7.8. Listing.
-------------------------
The Sponsor shall use its best efforts to cause the Preferred
Securities to be listed for quotation on the New York Stock Exchange.
SECTION 7.9. Transfer of Securities.
----------------------------------------
(a) Securities may only be transferred, in whole or in part, in accordance
with the terms and conditions set forth in this Declaration and in the terms of
the Securities. Any transfer or purported transfer of any Security not made in
accordance with this Declaration shall be null and void.
(b) Subject to this Article 7, Preferred Securities shall be freely
transferable.
(c) The Trust shall cause to be kept at the Corporate Trust Office of the
Property Trustee a register (the register maintained in such office being herein
sometimes referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Trust shall provide for the
registration of Preferred Securities and of transfers of Preferred Securities.
The Property Trustee is hereby appointed "Security Registrar" for the purpose of
registering Preferred Securities and transfers of Preferred Securities as herein
provided.
(d) Upon surrender for registration of transfer of any Security at an
office or agency of the Trust designated for such purpose, the Trust shall
execute, and the Property Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of any
authorized denominations and of a like aggregate principal amount.
(e) At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denominations and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange, the Trust shall
execute, and in the case of Preferred Securities the Property Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
(f) Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Trust or the Property Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Trust and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
(g) No service charge shall be made for any registration of transfer or
exchange of Securities, but the Trust may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities.
(h) If the Securities are to be redeemed in part, the Trust shall not be
required (A) to issue, register the transfer of or exchange any Securities
during a period beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of any such Securities selected for
redemption under Section 7.4 and ending at the close of business on the day of
such mailing, or (B) to register the transfer or exchange of any Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Security being redeemed in part.
SECTION 7.10. 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 the Trustees, the Sponsor
and the Trust 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 7.10, the Regular Trustees may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
therewith. Any duplicate Certificate issued pursuant to this Section shall
constitute conclusive evidence of an ownership interest in the relevant
Securities, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
SECTION 7.11. Deemed Security Holders.
-----------------------------------------
The Trustees may treat the Person in whose name any
Certificate shall be registered on the register of the Trust as the sole holder
of such Certificate and of the Securities represented by such Certificate for
purposes of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 7.12. Global Securities.
-----------------------------------
The Preferred Securities may be issued in the form of one or
more Global Securities. If the Preferred Securities are to be issued in the form
of one or more Global Securities, then the Regular Trustee on behalf of the
Trust shall execute and the Property Trustee shall authenticate and deliver one
or more Global Securities that (i) shall represent and shall be denominated in
an amount equal to the aggregate liquidation amount of all of the Preferred
Securities to be issued in the form of Global Securities and not yet cancelled,
(ii) shall be registered in the name of the Depositary for such Global Security
or Preferred Securities or the nominee of such Depositary, and (iii) shall be
delivered by the Property Trustee to such Depositary or pursuant to such
Depositary's instructions. Global Securities shall bear a legend substantially
to the following effect:
"This Preferred Security is a Global Security within the
meaning of the Declaration hereinafter referred to and is registered in the name
of The Depository Trust Company, a New York corporation (the "Depositary"), or a
nominee of the Depositary. This Preferred Security is exchangeable for 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 Preferred Security (other than a transfer of this 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 Preferred Security Certificate is presented by an
authorized representative of the Depositary to KeySpan Trust __ or its agent for
registration of transfer, exchange or payment, and any Preferred Security
Certificate issued is registered in the name of Cede & Co. or such other name as
registered by an authorized representative of the Depositary (and any payment
hereon is made to Cede & Co. or to 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 since the
registered owner hereof, Cede & Co., has an interest herein."
Preferred Securities not represented by a Global Security
issued in exchange for all or a part of a Global Security pursuant to this
Section 7.12 shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Property Trustee. Upon
execution and authentication, the Property Trustee shall deliver such Preferred
Securities not represented by a Global Security to the Persons in whose names
such definitive Preferred Securities are so registered.
At such time as all interests in Global Securities have been
redeemed, repurchased or cancelled, such Global Securities shall be, upon
receipt thereof, cancelled by the Property Trustee in accordance with standing
procedures of the Depositary. At any time prior to such cancellation, if any
interest in Global Securities is exchanged for Preferred Securities not
represented by a Global Security, redeemed, cancelled or transferred to a
transferee who receives Preferred Securities not represented by a Global
Security therefor or any Preferred Security not represented by a Global Security
is exchanged or transferred for part of Global Securities, the principal amount
of such Global Securities shall, in accordance with the standing procedures of
the Depositary, be reduced or increased, as the case may be, and an endorsement
shall be made on such Global Securities by the Property Trustee to reflect such
reduction or increase.
The Trust and the Property Trustee may for all purposes,
including the making of payments due on the Preferred Securities, deal with the
Depositary as the authorized representative of the Holders for the purposes of
exercising the rights of Holders hereunder. The rights of the owner of any
beneficial interest in a Global Security shall be limited to those established
by law and agreements between such owners and depository participants; provided,
that no such agreement shall give any rights to any Person against the Trust or
the Property Trustee without the written consent of the parties so affected.
Multiple requests and directions from and votes of the Depositary as holder of
Preferred Securities in global form with respect to any particular matter shall
not be deemed inconsistent to the extent they do not represent an amount of
Preferred Securities in excess of those held in the name of the Depositary or
its nominee.
If at any time the Depositary for any Preferred Securities
represented by one or more Global Securities notifies the Trust that it is
unwilling or unable to continue as Depositary for such Preferred Securities or
if at any time the Depositary for such Preferred Securities shall no longer be
eligible under this Section 7.12, the Trust shall appoint a successor Depositary
with respect to such Preferred Securities. If a successor Depositary for such
Preferred Securities is not appointed by the Trust within 90 days after the
Trust receives such notice or becomes aware of such ineligibility, the Trust's
election that such Preferred Securities be represented by one or more Global
Securities shall no longer be effective and the Trust shall execute, and the
Property Trustee will authenticate and deliver, Preferred Securities in
definitive registered form, in any authorized denominations, in an aggregate
liquidation amount equal to the principal amount of the Global Security or
Preferred Securities representing such Preferred Securities in exchange for such
Global Security or Preferred Securities.
The Trust may at any time and in its sole discretion determine
that the Preferred Securities issued in the form of one or more Global
Securities shall no longer be represented by a Global Security or Preferred
Securities. In such event the Trust shall execute, and the Property Trustee,
shall authenticate and deliver, Preferred Securities in definitive registered
form, in any authorized denominations, in an aggregate liquidation amount equal
to the principal amount of the Global Security or Preferred Securities
representing such Preferred Securities, in exchange for such Global Security or
Preferred Securities.
Notwithstanding any other provisions of this Declaration
(other than the provisions set forth in Section 7.9), Global Securities may not
be transferred as a whole except 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 or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
Interests of beneficial owners in a Global Security may be
transferred or exchanged for Preferred Securities not represented by a Global
Security and Preferred Securities not represented by a Global Security may be
transferred or exchange for Global Securities in accordance with rules of the
Depositary and the provisions of Section 7.9.
ARTICLE 8
DISSOLUTION AND TERMINATION OF TRUST
------------------------------------
SECTION 8.1. Dissolution and Termination of Trust.
------------------------------------------------------
(a) The Trust shall dissolve upon the earliest of:
(i) the bankruptcy of the Holder of the Common Securities or the
Sponsor;
(ii) 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 obtaining the consent of the Holders of at least
a Majority in Liquidation Amount of the Securities to the filing of a
certificate of cancellation with respect to the Trust or the revocation of
the Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) the entry of a decree of judicial dissolution of the Sponsor or
the Trust;
(iv) the time when all of the Securities shall have been called for
redemption and the amounts then due shall have been paid to the Holders in
accordance with the terms of the Securities;
(v) upon the election of the Regular Trustees, following the
occurrence and continuation of a Special Event pursuant to which the Trust
shall have been dissolved in accordance with the terms of the Securities,
and all of the Debentures shall have been distributed to the Holders of
Securities in exchange for all of the Securities;
(vi) at the Sponsor's election by notice and direction to the Property
Trustee to distribute the Debentures to the Holders of the Securities in
exchange for all of the Securities; provided that the Sponsor will be
required to obtain an opinion of counsel that the distribution of the
Debentures will not be taxable to the Holders of the Preferred Securities
for United States federal income tax purposes; or
(vii) the time when all of the Regular Trustees and the Sponsor shall
have consented to dissolution of the Trust provided such action is taken
before the issuance of any Securities;
(b) As soon as is practicable after the occurrence of an event referred to
in Section 8.1(a) and upon completion of the winding up and liquidation of the
Trust, the Trustees shall terminate the Trust by filing a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 4.2 and Article 9 shall survive the
termination of the Trust.
SECTION 8.2. Liquidation Distribution Upon Dissolution of the Trust.
------------------------------------------------------------------------
(a) In the event of any voluntary or involuntary liquidation, dissolution,
or winding-up of the Trust (each a "Liquidation"), the Holders of the Securities
on the date of the Liquidation will be entitled to receive, out of the assets of
the Trust available for distribution to Holders of Securities after satisfaction
of the Trusts' liabilities to creditors, if any, distributions in cash or other
immediately available funds in an amount equal to the aggregate of the stated
liquidation amount of $__ per Security plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless, in connection with such Liquidation, Debentures in an
aggregate stated principal amount equal to the aggregate stated liquidation
amount of, with an interest rate identical to the distribution rate of, and
accrued and unpaid interest equal to accumulated and unpaid Distributions on,
such Securities shall be distributed on a Pro Rata basis to the Holders of the
Securities in exchange for such Securities.
(b) If, upon any such Liquidation, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Securities shall be paid on a Pro Rata basis. The Holders of the
Common Securities will be entitled to receive distributions upon any such
Liquidation Pro Rata with the Holders of the Preferred Securities except that if
an Indenture Event of Default has occurred and is continuing, the Preferred
Securities shall have a preference over the Common Securities with regard to
such distributions as provided in Section 7.1(b).
ARTICLE 9
LIMITATION OF LIABILITY OF
--------------------------
HOLDERS OF SECURITIES, DELAWARE TRUSTEES OR OTHERS
--------------------------------------------------
SECTION 9.1. Liability.
---------------------------
(a) Except as expressly set forth in this Declaration, the Guarantee and
the terms of the Securities, the Sponsor:
(i) shall not be personally liable for the return of any portion of
the capital contributions (or any return thereon) of the Holders of the
Securities which shall be made solely from assets of the Trust; and
(ii) shall not be required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust or otherwise.
(b) Pursuant to Section 3803(a) of the Business Trust Act, the Holder of
the Common Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware; provided, however,
the Holders of the Common Securities shall be liable for all of the debts and
obligations of the Trust (other than with respect to the Securities) to the
extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the Holders of
the Preferred Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 9.2. Exculpation.
-----------------------------
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Trust and upon such information, opinions, reports or
statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 9.3. Fiduciary Duty.
--------------------------------
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to an 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 any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a manner
that is, or provides terms that are, fair and reasonable to the Trust or
any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and factors
as it desires, including its own interests, and shall have no duty or
obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
Indemnification.
(iii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Debenture Issuer 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 Debenture Issuer
Indemnified Person against expenses (including attorney 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 Debenture Issuer
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.
(iv) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Debenture Issuer 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 Debenture
Issuer 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 Debenture Issuer Indemnified
Person shall have been adjudged to be liable to the Trust unless and only
to the extent that the Court of Chancery of Delaware or the court in which
such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for
such expenses which such Court of Chancery or such other court shall deem
proper.
(v) Any indemnification under paragraphs (i) and (ii) of this Section
9.4(a) (unless ordered by a court) shall be made by the Debenture Issuer
only as authorized in the specific case upon a determination that
indemnification of the Debenture Issuer 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 Common Security Holder of the Trust.
(vi) Expenses (including attorneys' fees) incurred by a Debenture
Issuer Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 9.4(a) shall be paid by the Debenture Issuer in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Debenture Issuer
Indemnified Person to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the Debenture
Issuer as authorized in this Section 9.4(a). Notwithstanding the foregoing,
no advance shall be made by the Debenture Issuer if a determination is
reasonably and promptly made (i) by the Regular Trustees by a majority vote
of a quorum of disinterested Regular Trustees, (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested Regular
Trustees so directs, by independent legal counsel in a written opinion or
(iii) the Common Security Holder of the Trust, that, based upon the facts
known to the Regular Trustees, counsel or the Common Security Holder at the
time such determination is made, such Debenture Issuer 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 Debenture Issuer 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 Common Security Holder reasonably determine
that such person deliberately breached his duty to the Trust or its Common
or Preferred Security Holders.
(vii) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 9.4(a) shall not
be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Debenture
Issuer or Preferred Security Holders of the Trust or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding such office. All rights to indemnification under this Section
9.4(a) (a) shall be deemed to be provided by a contract between the
Debenture Issuer and each Debenture Issuer Indemnified Person who serves in
such capacity at any time while this Section 9.4(a) is in effect. Any
repeal or modification of this Section 9.4(a) shall not affect any rights
or obligations then existing.
(viii) The Debenture Issuer or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Debenture Issuer
Indemnified Person against any liability asserted against him and incurred
by him in any such capacity, or arising out of his status as such, whether
or not the Debenture Issuer would have the power to indemnify him against
such liability under the provisions of this Section 9.4(a).
(ix) For purposes of this Section 9.4(a), references to "the Trust"
shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in
a consolidation or merger, so that any person who is or was a director,
trustee, officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director, trustee,
officer, employee or agent of another entity, shall stand in the same
position under the provisions of this Section 9.4(a) with respect to the
resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(x) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 9.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
Debenture Issuer Indemnified Person and shall inure to the benefit of the
heirs, executors and administrators of such a person. The obligation to
indemnify as set forth in this Section 9.4(a) shall survive the resignation
or removal of the Delaware Trustee or the Property Trustee or the
termination of this Declaration.
(d) The Debenture Issuer agrees to indemnify the (i) Property Trustee, (ii)
the Delaware Trustee, (iii) any Affiliate of the Property Trustee or the
Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Property Trustee or 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, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 9.4(b) shall
survive the resignation and removal of the Delaware Trustee or the Property
Trustee and the satisfaction and discharge of this Declaration. In addition, the
Debenture Issuer has agreed in the Indenture to pay the fees and expenses of the
Delaware Trustee and the Property Trustee.
SECTION 9.4. 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 activities of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the activities of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee or the Property Trustee shall be obligated to present any particular
investment or other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the Trust, and any
Covered Person, the Sponsor, the Delaware Trustee and the Property Trustee shall
have the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the Property Trustee
may engage or be interested in any financial or other transaction with the
Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee
or agent for, or act on any committee or body of holders of, securities or other
obligations of the Sponsor or its Affiliates.
ARTICLE 10
ACCOUNTING
----------
SECTION 10.1. Fiscal Year.
-----------------------------
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
SECTION 10.2. Certain Accounting Matters.
--------------------------------------------
(a) At all times during the existence of the Trust, the Regular Trustees
shall keep, or cause to be kept, full books of account, records and supporting
documents, which shall reflect in reasonable detail, each transaction of the
Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes. The books of account and the records
of the Trust shall be examined by and reported upon as of the end of each Fiscal
Year of the Trust by a firm of independent certified public accountants selected
by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to each
of the Holders of Securities, within 90 days after the end of each Fiscal Year
of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss.
(c) The Regular Trustees shall cause to be duly prepared and delivered to
each of the Holders of Securities, an annual United States federal income tax
information statement, required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall endeavor to deliver
all such statements within 30 days after the end of each Fiscal Year of the
Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed with the
appropriate taxing authority, an annual United States federal income tax return,
on a Form 1041 or such other form required by 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 10.3. Banking.
-------------------------
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; provided, however, that all payments of
funds in respect of the Debentures held by the 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 10.4. Withholding.
-----------------------------
The Trust and the Regular Trustees shall comply with all
withholding requirements under United States federal, state and local law. The
Trust shall request, and the Holders shall provide to the Trust, such forms or
certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably be
requested by the Trust to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Regular Trustees shall file
required forms with applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions. To the extent that the
Trust is required to withhold and pay over any amounts to any authority with
respect to distributions or allocations to any Holder, the amount withheld shall
be deemed to be a distribution in the amount of the withholding to the Holder.
In the event of any claimed over withholding, Holders shall be limited to an
action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.
ARTICLE 11
AMENDMENTS AND MEETINGS
-----------------------
SECTION 11.1. Amendments.
- ----------------------------
(a) Except as otherwise provided in this Declaration or by any applicable
terms of the Securities, this Declaration may only be amended by a written
instrument approved and executed by the Sponsor and (i) the Regular Trustees
(or, if there are more than two Regular Trustees, a majority of the Regular
Trustees) and (ii) the Property Trustee if the amendment affects the rights,
powers, duties, obligations or immunities of the Property Trustee; and (iii) by
the Delaware Trustee if the amendment affects the rights, powers, duties,
obligations or immunities of 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 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:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms
to, the terms of this Declaration (including the terms of
the Securities) and that all conditions precedent to the
execution and delivery of such amendment have been
satisfied; and
(B) an opinion of counsel (who may be counsel to the Sponsor or
the Trust) that such amendment is permitted by, and conforms
to, the terms of this Declaration (including the terms of
the Securities) and that all conditions precedent to the
execution and delivery of such amendment have been
satisfied; and
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to be classified as other than a grantor
trust for United States federal income tax purposes;
(B) reduce or otherwise adversely affect the powers of the
Property Trustee in contravention of the Trust Indenture
Act; or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act.
(c) If the Trust has issued any Securities that remain outstanding:
(i) any amendment that would (a) change the amount or timing of any
distribution of the Securities or otherwise adversely affect the amount of
any distribution required to be made in respect of the Securities as of a
specified date or (b) restrict the right of a Holder of Securities to
institute suit for the enforcement of any such payment on or after such
date, will entitle the Holders of such Securities, voting together as a
single class, to vote on such amendment or proposal and such amendment or
proposal shall not be effective except with the approval of each of the
Holders of the Securities affected thereby; and
(ii) any amendment that would (a) adversely affect the powers,
preferences or special rights of the Securities, whether by way of
amendment to this Declaration or otherwise or (b) result in the
dissolution, winding-up or termination of the Trust other than pursuant to
the terms of this Declaration, will entitle the holders of the Securities
voting together as a single class to vote on such amendment or proposal and
such amendment or proposal shall not be effective except with the approval
of 66 2/3% of the Securities affected thereby; provided that, if any
amendment or proposal referred to in clause (a) above would adversely
affect only the Preferred Securities or the Common Securities, then only
the affected class will be entitled to vote on such amendment or proposal
and such amendment or proposal.
(d) This Section 11.1 shall not be amended without the consent of all of
the Holders of the Securities.
(e) Article 4 shall not be amended without the consent of the Holders of a
Majority in Liquidation Amount of the Common Securities.
(f) The rights of the Holders of the Common Securities under Article 5 to
increase or decrease the number of, and appoint and remove Trustees shall not be
amended without the consent of the Holders of a Majority in Liquidation Amount
of the Common Securities.
(g) Notwithstanding Section 11.1(c), this Declaration may be amended
without the consent of the Holders of the Securities, if such amendment does not
adversely affect in any material respect the rights of the holders of the
Securities, to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that may
be defective or inconsistent with any other provision of this Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) conform to any change in Rule 3a-5 of the Investment Company Act
or written change in interpretation or application of Rule 3a-5 of the
Investment Company Act by any legislative body, court, government agency or
regulatory authority; or
(v) to modify, eliminate and add to any provision of this Declaration
to ensure that the Trust will be classified as a grantor trust for United
States federal income tax purposes at all times that any Securities are
outstanding or to ensure that the Trust will not be required to register as
an Investment Company under the Investment Company Act.
SECTION 11.2. Meetings of the Holders of Securities; Action by Written Consent.
- --------------------------------------------------------------------------------
(a) Meetings of the Holders of any class of Securities may be called at any
time by the Regular Trustees (or as provided in the terms of the Securities) to
consider and act on any matter on which Holders of such class of Securities are
entitled to act under the terms of this Declaration, the terms of the Securities
or the rules of any stock exchange on which the Preferred Securities are listed
or admitted for trading. The Regular Trustees shall call a meeting of the
Holders of such class if directed to do so by the Holders of at least 10% in
Liquidation Amount of such class of Securities. Such direction shall be given by
delivering to the Regular Trustees one or more calls in a writing stating that
the signing Holders of Securities wish to call a meeting and indicating the
general or specific purpose for which the meeting is to be called. Any Holders
of Securities calling a meeting shall specify in writing the Certificates held
by the Holders of Securities exercising the right to call a meeting and only
those Securities specified shall be counted for purposes of determining whether
the required percentage set forth in the second sentence of this paragraph has
been met.
(b) Except to the extent otherwise provided in the terms of the Securities,
the following provisions shall apply to meetings of Holders of Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more than
60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of Securities. Any action
that may be taken at a meeting of the Holders of Securities may be taken
without a meeting if a consent in writing setting forth the action so taken
is signed by the Holders of Securities owning not less than the minimum
amount of Securities in liquidation amount that would be necessary to
authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot submitted to the
Security Holders for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder of a Security may authorize any Person to act for it
by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration of
11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing such proxy. Except as otherwise provided herein, all matters
relating to the giving, voting or validity of proxies shall be governed by
the General Corporation Law of the State of Delaware relating to proxies,
and judicial interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders of the Securities were stockholders of a
Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be conducted
by the Regular Trustees or by such other Person that the Regular Trustees
may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of the
Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Preferred Securities are then listed for trading,
otherwise provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any meeting
at which any matter is to be voted on by any Holders of Securities, waiver
of any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
ARTICLE 12
REPRESENTATIONS OF PROPERTY TRUSTEE
-----------------------------------
AND DELAWARE TRUSTEE
--------------------
SECTION 12.1. Representations and Warranties of the 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 company duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation or
organization, with trust power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of, this Declaration;
(b) the Property Trustee satisfies the requirements set forth in Section
6.3(a);
(c) the execution, delivery and performance by the Property Trustee of this
Declaration have been duly authorized by all necessary corporate action on the
part of the Property Trustee. This Declaration has been duly executed and
delivered by the Property Trustee, and it constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(d) the execution, delivery and performance of this Declaration by the
Property Trustee do not conflict with or constitute a breach of the articles of
association or incorporation, as the case may be, or the by-laws (or other
similar organizational documents) of the Property Trustee; and
(e) no consent, approval or authorization of, or registration with or
notice to, any State or federal banking authority is required for the execution,
delivery or performance by the Property Trustee of this Declaration.
SECTION 12.2. Representations and Warranties of the 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 satisfies the requirements set forth in Section
6.2 and has the power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Declaration and, if it is not a
natural person, is duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation or organization;
(b) the Delaware Trustee has been authorized to perform its obligations
under the Certificate of Trust and this Declaration. This 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); and
(c) no consent, approval or authorization of, or registration with or
notice to, any State or federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee of this Declaration.
ARTICLE 13
MISCELLANEOUS
-------------
SECTION 13.1. Notices.
-------------------------
All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
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 Property Trustee, the Delaware Trustee and the Holders of the
Securities):
c/o KeySpan Corporation
One MetroTech Center
Brooklyn, New York 11201
Attention: Corporate Counsel
Telecopy No: (718) o
(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
Regular Trustees, the Property Trustee and the Holders of the Securities):
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
Attention: Corporate Trustee Administration
Telecopy No: ________________
(c) if given to the Property Trustee, at its Corporate Trust Office (or
such other address as the Property Trustee may give notice of to the Regular
Trustees, the Delaware Trustee and the Holders of the Securities).
(d) if given to the Holder of the Common Securities, at the mailing address
of the Sponsor set forth below (or such other address as the Holder of the
Common Securities may give notice of to the Property Trustee, the Delaware
Trustee and the Trust):
KeySpan Corporation
One MetroTech Center
Brooklyn, New York 11201
Attention: Corporate Counsel
Telecopy No: (718) o
(e) if given to any other Holder, at the address set forth on the register
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 13.2. Governing Law.
-------------------------------
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware.
SECTION 13.3. Intention of the Parties.
------------------------------------------
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted in a manner consistent with
such classification.
SECTION 13.4. Headings.
--------------------------
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 13.5. Successors and Assigns.
----------------------------------------
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 13.6. Partial Enforceability.
----------------------------------------
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 13.7. Counterparts.
------------------------------
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
IN WITNESS WHEREOF, the undersigned have caused these presents
to be executed as of the day and year first above written.
KEYSPAN CORPORATION
as Sponsor and as Common Securities Holder
BY:__________________________________
Name:
Title:
JPMORGAN CHASE BANK,
as Property Trustee
BY: __________________________________
Name:
Title:
CHASE MANHATTAN BANK USA NATIONAL ASSOCIATION, as
Delaware Trustee
BY: __________________________________
Name:
Title:
-----------------------------
Ronald S. Jendras, as Regular Trustee
-----------------------------
Richard A. Rapp, as Regular Trustee
-----------------------------
Michael J. Taunton, as Regular Trustee
EXHIBIT A
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL SECURITY, INSERT
THE FOLLOWING: This Preferred Security is a Global Security within the meaning
of the Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company, a New York corporation (the "Depositary"), or a
nominee of the Depositary. This Preferred Security is exchangeable for 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 Preferred Security (other than a transfer of this 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 Preferred Security Certificate is presented by an
authorized representative of the Depositary to the issuer or its agent for
registration of transfer, exchange or payment, and any Preferred Security
Certificate issued is registered in the name of Cede & Co. or such other name as
registered by an authorized representative of the Depositary (and any payment
hereon is made to Cede & Co. or to 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 since the
registered owner hereof, Cede & Co., has an interest herein.]
Certificate No. Number of Preferred Securities:
CUSIP No. ____
Certificate Evidencing Preferred Securities
of
KeySpan Trust __
____% Preferred Securities
(liquidation amount $__ per Preferred Security)
KeySpan 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 ____% Preferred Securities (liquidation amount $__ per Preferred
Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the register of the Trust, in person or by a duly authorized
attorney, upon surrender of this certificate duly endorsed and in proper form
for transfer as provided in the Declaration (as defined below). The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Preferred Securities represented hereby are issued and shall in all respects
be subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust, dated as of _____ __, ____ (as the same may be amended from time to
time (the "Declaration"), among KEYSPAN CORPORATION, as Sponsor, _____________,
_______________ and _________________, as Regular Trustees, JPMORGAN CHASE BANK
as Property Trustee, CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, as Delaware
Trustee and the holders, from time to time, of undivided beneficial ownership
interests in assets of the Trust. 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 Guarantee to the extent described therein. The Sponsor will
provide a copy of the Declaration, the Guarantee and the Indenture to a Holder
without charge upon written request to the Sponsor at its principal place of
business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal, state and local income tax purposes, the Debentures as indebtedness and
the Preferred Securities as evidence of undivided indirect beneficial ownership
interests in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this ___day of
_____, ____.
KEYSPAN TRUST __
By:______________________________
Name:
Title:
This is one of the Securities referred to in the
within-mentioned Declaration.
JPMORGAN CHASE BANK,
as Property Trustee
By______________________________
Name:
Title:
EXHIBIT B
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate No. Number of Common Securities: ____
Certificate Evidencing Common Securities
of
KeySpan Trust __
Common Securities
liquidation amount $__ per Common Security)
KeySpan Trust __, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that KEYSPAN
CORPORATION (the "Holder") is the registered owner of common securities of the
Trust representing an undivided beneficial ownership interest in the assets of
the Trust designated the ____% Common Securities (liquidation amount $__ per
Common Security) (the "Common Securities"). The Common Securities are not
transferable and any attempted transfer thereof shall be void. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Common Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust, dated as of _____ __, ____ (as the same may be amended from time to
time, the "Declaration"), among KEYSPAN CORPORATION, as Sponsor,
__________________, __________________ and __________________, as Regular
Trustees, JPMORGAN CHASE BANK, as Property Trustee, CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION, as Delaware Trustee and the holders, from time to time, of
undivided beneficial ownership interests in assets of the Trust. The Holder is
entitled to the benefits of the Guarantee to the extent described therein.
Capitalized terms used herein but not defined shall have the meaning given them
in the Declaration. The Sponsor will provide a copy of the Declaration, the
Guarantee and the Indenture to the Holder without charge upon written request to
the Sponsor 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.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Common
Securities as evidence of an undivided indirect beneficial ownership interest in
the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this ____ day of
_______, ____.
KEYSPAN TRUST __
By:____________________________________
Name:
Title: