EXHIBIT 10.11
AMENDED AND RESTATED DECLARATION OF TRUST
OF
CHANDLER CAPITAL TRUST II
Dated as of December 16, 2003
PAGE i
TABLE OF CONTENTS
Page
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ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1. Definitions. Unless the context otherwise requires:..........2
ARTICLE II
ORGANIZATION
SECTION 2.1. Name............................................................9
SECTION 2.2. Office..........................................................9
SECTION 2.3. Purpose.........................................................9
SECTION 2.4. Authority......................................................10
SECTION 2.5. Title to Property of the Trust.................................10
SECTION 2.6. Powers and Duties of the Trustees and the Administrators.......10
SECTION 2.7. Prohibition of Actions by the Trust and the Trustees...........15
SECTION 2.8. Powers and Duties of the Institutional Trustee.................16
SECTION 2.9. Certain Duties and Responsibilities of the Trustees and
the Administrators...........................................17
SECTION 2.10. Certain Rights of Institutional Trustee........................19
SECTION 2.11. Delaware Trustee...............................................21
SECTION 2.12. Execution of Documents.........................................21
SECTION 2.13. Not Responsible for Recitals or Issuance of Securities.........22
SECTION 2.14. Duration of Trust..............................................22
SECTION 2.15. Mergers........................................................22
ARTICLE III
SPONSOR
SECTION 3.1. Sponsor's Purchase of Common Securities........................24
SECTION 3.2. Responsibilities of the Sponsor................................24
ARTICLE IV
TRUSTEES AND ADMINISTRATORS
SECTION 4.1. Number of Trustees.............................................24
SECTION 4.2. Delaware Trustee...............................................25
SECTION 4.3. Institutional Trustee; Eligibility.............................25
SECTION 4.4. Administrators.................................................25
SECTION 4.5. Appointment, Removal and Resignation of the Trustees and the
Administrators..............................................26
SECTION 4.6. Vacancies Among Trustees.......................................28
SECTION 4.7. Effect of Vacancies............................................28
SECTION 4.8. Meetings of the Trustees and the Administrators................28
SECTION 4.9. Delegation of Power............................................28
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SECTION 4.10. Merger, Conversion, Consolidation or Succession to Business....29
ARTICLE V
DISTRIBUTIONS
SECTION 5.1. Distributions..................................................29
ARTICLE VI
ISSUANCE OF SECURITIES
SECTION 6.1. General Provisions Regarding Securities........................29
SECTION 6.2. Paying Agent, Transfer Agent, Calculation Agent and Registrar..30
SECTION 6.3. Form and Dating................................................31
SECTION 6.4. Mutilated, Destroyed, Lost or Stolen Certificates..............31
SECTION 6.5. Temporary Certificates.........................................32
SECTION 6.6. Cancellation...................................................32
SECTION 6.7. Rights of Holders; Waivers of Past Defaults....................32
ARTICLE VII
DISSOLUTION AND TERMINATION OF TRUST
SECTION 7.1. Dissolution and Termination of Trust...........................34
ARTICLE VIII
TRANSFER OF INTERESTS
SECTION 8.1. General........................................................35
SECTION 8.2. Transfer Procedures and Restrictions...........................36
SECTION 8.3. Deemed Security Holders........................................39
ARTICLE IX
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 9.1. Liability......................................................39
SECTION 9.2. Exculpation....................................................40
SECTION 9.3. Fiduciary Duty.................................................40
SECTION 9.4. Indemnification................................................41
SECTION 9.5. Outside Businesses.............................................44
SECTION 9.6. Compensation; Fee..............................................44
ARTICLE X
ACCOUNTING
SECTION 10.1. Fiscal Year....................................................45
SECTION 10.2. Certain Accounting Matters.....................................45
SECTION 10.3. Banking........................................................46
SECTION 10.4. Withholding....................................................46
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ARTICLE XI
AMENDMENTS AND MEETINGS
SECTION 11.1. Amendments.....................................................46
SECTION 11.2. Meetings of the Holders of the Securities; Action by Written
Consent.....................................................48
ARTICLE XII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND DELAWARE TRUSTEE
SECTION 12.1. Representations and Warranties of Institutional Trustee........50
SECTION 12.2. Representations and Warranties of Delaware Trustee.............50
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. Notices........................................................51
SECTION 13.2. Governing Law..................................................52
SECTION 13.3. Submission to Jurisdiction.....................................53
SECTION 13.4. Intention of the Parties.......................................53
SECTION 13.5. Headings.......................................................53
SECTION 13.6. Successors and Assigns.........................................53
SECTION 13.7. Partial Enforceability.........................................53
SECTION 13.8. Counterparts...................................................53
ANNEXES AND EXHIBITS
ANNEX I Terms of Capital Securities and Common Securities
EXHIBIT A-1 Form of Capital Security Certificate
EXHIBIT A-2 Form of Common Security Certificate
EXHIBIT B Form of Transferee Certificate to be Executed by Accredited
Investors
EXHIBIT C Form of Transferor Certificate to be Executed for QIBS
EXHIBIT D Form of Transferee Certificate to be Executed by U.S. Persons
EXHIBIT E Form of Officers' Certificate
PAGE C-1
AMENDED AND RESTATED DECLARATION OF TRUST
OF
CHANDLER CAPITAL TRUST II
DECEMBER 16, 2003
AMENDED AND RESTATED DECLARATION OF TRUST (as amended or supplemented from
time to time in accordance with the terms hereof, this "Declaration"), dated
and effective as of December 16, 2003, by the Trustees (as defined herein), the
Administrators (as defined herein), the Sponsor (as defined herein) and the
holders from time to time of undivided beneficial interests in the assets of
the Trust (as defined herein) to be issued pursuant to this Declaration.
WHEREAS, certain of the Trustees and the Sponsor established Chandler
Capital Trust II (the "Trust"), a statutory trust under the Statutory Trust Act
(as defined herein), pursuant to a Declaration of Trust, dated as of December
4, 2003 (the "Original Declaration"), and a Certificate of Trust filed with the
Secretary of State of the State of Delaware on December 4, 2003, for the sole
purpose of issuing and selling the Securities (as defined herein) representing
undivided beneficial interests in the assets of the Trust, investing the
proceeds thereof in the Debentures (as defined herein) of the Debenture Issuer
(as defined herein) and engaging in those activities necessary, advisable or
incidental thereto;
WHEREAS, as of the date hereof, no interests in the assets of the Trust
have been issued; and
WHEREAS, all of the Trustees, the Administrators and the Sponsor, by this
Declaration, amend and restate each and every term and provision of the
Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a statutory trust under the Statutory Trust Act and that this
Declaration constitutes the governing instrument of such statutory trust, and
that all assets contributed to the Trust will be held in trust for the benefit
of the holders, from time to time, of the Securities, subject to the provisions
of this Declaration, and, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties, intending to be legally bound hereby, amend
and restate in its entirety the Original Declaration and agree as follows:
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ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1. DEFINITIONS. Unless the context otherwise requires:
(a) capitalized terms used in this Declaration but not defined in the
preamble above or elsewhere herein have the respective meanings assigned to
them in this Section 1.1 or, if not defined in this Section 1.1 or elsewhere
herein, in the Indenture;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to this
Declaration and each Annex and Exhibit hereto, as modified, supplemented or
amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and Exhibits
to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act (as defined herein) has the
same meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Additional Interest" has the meaning set forth in Section 3.06 of the
Indenture.
"Administrative Action" has the meaning set forth in paragraph 4(a) of
Annex I.
"Administrators" means each of W. Brent LaGere, Mark T. Paden and Mark C.
Hart, solely in such Person's capacity as Administrator of the Trust continued
hereunder and not in such Person's individual capacity, or such Administrator's
successor in interest in such capacity, or any successor appointed as herein
provided.
"Affiliate" has the same meaning as given to that term in Rule 405 under
the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person.
"Bankruptcy Event" means, with respect to any Person:
(a) a court having jurisdiction in the premises enters a decree or order
for relief in respect of such Person in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appoints a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of such Person or for any substantial
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part of its property, or orders the winding-up or liquidation of its affairs,
and such decree, appointment or order remains unstayed and in effect for a
period of 90 consecutive days; or
(b) such Person commences a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect,
consents to the entry of an order for relief in an involuntary case under any
such law, or consents to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar
official of such Person or of any substantial part of its property, or makes
any general assignment for the benefit of creditors, or fails generally to pay
its debts as they become due.
"Business Day" means any day other than Saturday, Sunday or any other day
on which banking institutions in Wilmington, Delaware, The City of New York or
Chandler, Oklahoma are permitted or required by law or executive order to close.
"Calculation Agent" has the meaning set forth in Section 1.01 of the
Indenture.
"Capital Securities" has the meaning set forth in Section 6.1(a).
"Capital Security Certificate" means a definitive Certificate registered
in the name of the Holder representing a Capital Security substantially in the
form of Exhibit A-1.
"Certificate" means any certificate evidencing Securities.
"Certificate of Trust" means the certificate of trust filed with the
Secretary of State of the State of Delaware with respect to the Trust, as
amended and restated from time to time.
"Closing Date" has the meaning set forth in the Placement Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Commission" means the United States Securities and Exchange Commission.
"Common Securities" has the meaning set forth in Section 6.1(a).
"Common Security Certificate" means a definitive Certificate registered
in the name of the Holder representing a Common Security substantially in the
form of Exhibit A-2.
"Company Indemnified Person" means (a) any Administrator, (b) any
Affiliate of any Administrator, (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Administrator or
(d) any officer, employee or agent of the Trust or its Affiliates.
"Corporate Trust Office" means the office of the Institutional Trustee at
which at any particular time its corporate trust business shall be principally
administered, which at all times shall be located within the United States and
at the time of execution of this Declaration
PAGE 4
shall be Rodney Square North, 1100 North Market Street, Wilmington, DE
19890-0001, Attention: Corporate Trust Administration.
"Coupon Rate" has the meaning set forth in paragraph 2(a) of Annex I.
"Covered Person" means (a) any Administrator, officer, director,
shareholder, partner, member, representative, employee or agent of the Trust or
the Trust's Affiliates or (b) any Holder of Securities.
"Debenture Issuer" means Chandler (U.S.A.), Inc., an insurance holding
company incorporated in Oklahoma, in its capacity as issuer of the Debentures
under the Indenture, and any permitted successor under the Indenture.
"Debenture Trustee" means Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as trustee under the
Indenture until a successor is appointed thereunder, and thereafter means such
successor trustee.
"Debentures" means the Floating Rate Junior Subordinated Debt Securities
due 2034 to be issued by the Debenture Issuer under the Indenture.
"Default" means any event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.
"Deferred Interest" means any interest on the Debentures that would have
been overdue and unpaid for more than one Distribution Payment Date but for the
imposition of an Extension Period, and the interest that shall accrue (to the
extent that the payment of such interest is legally enforceable) on such
interest at the Coupon Rate applicable during such Extension Period, compounded
quarterly from the date on which such Deferred Interest would otherwise have
been due and payable until paid or made available for payment.
"Definitive Capital Securities" means any Capital Securities in definitive
form issued by the Trust.
"Delaware Trustee" has the meaning set forth in Section 4.2.
"Direct Action" has the meaning set forth in Section 2.8(e).
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 5.1.
"Distribution Payment Date" has the meaning set forth in paragraph 2(e) of
Annex I.
"Distribution Period" has the meaning set forth in paragraph 2(a) of
Annex I.
"Event of Default" means the occurrence of an Indenture Event of Default.
PAGE 5
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"Extension Period" has the meaning set forth in paragraph 2(e) of Annex I.
"Fiduciary Indemnified Person" shall mean each of the Institutional
Trustee (including in its individual capacity), the Delaware Trustee
(including in its individual capacity), any Affiliate of the Institutional
Trustee or the Delaware Trustee, and any officers, directors, shareholders,
members, partners, employees, representatives, custodians, nominees or agents
of the Institutional Trustee or the Delaware Trustee.
"Fiscal Year" has the meaning set forth in Section 10.1
"Guarantee" means the Guarantee Agreement, dated as of the Closing Date,
of the Sponsor (the "Guarantor") in respect of the Capital Securities.
"Holder" means a Person in whose name a Certificate representing a
Security is registered on the Securities Register maintained by or on behalf
of the Registrar, such Person being a beneficial owner within the meaning of
the Statutory Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"Indenture" means the Indenture, dated as of the Closing Date, between the
Debenture Issuer and the Debenture Trustee, and any indenture supplemental
thereto pursuant to which the Debentures are to be issued.
"Indenture Event of Default" means an "Event of Default" as defined in the
Indenture.
"Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 4.3.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in paragraph 4(a) of
Annex I.
"Legal Action" has the meaning set forth in Section 2.8(e).
"LIBOR" means the London Interbank Offered Rate for three-month U.S.
Dollar deposits in Europe as determined by the Calculation Agent according to
paragraph 2(b) of Annex I.
PAGE 6
"LIBOR Banking Day" has the meaning set forth in paragraph 2(b)(1) of
Annex I.
"LIBOR Business Day" has the meaning set forth in paragraph 2(b)(1) of
Annex I.
"LIBOR Determination Date" has the meaning set forth in paragraph 2(b)(1)
of Annex I.
"Liquidation" has the meaning set forth in paragraph 3 of Annex I.
"Liquidation Distribution" has the meaning set forth in paragraph 3 of
Annex I.
"Majority in liquidation amount of the Securities" means Holders of
outstanding Securities voting together as a single class or, as the context may
require, Holders of outstanding Capital 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 amount that
would be paid upon the redemption, liquidation or otherwise on the date upon
which the voting percentages are determined, plus unpaid Distributions accrued
thereon to such date) of all outstanding Securities of the relevant class.
"Maturity Date" has the meaning set forth in paragraph 4(a) of Annex I.
"Maturity Redemption Price" has the meaning set forth in paragraph 4(a) of
Annex I.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by two Authorized Officers of such Person or, in the case of a natural
Person, such Person. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Declaration shall
include:
(a) a statement that each Authorized Officer or Person, as the case may
be, 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 Authorized Officer or Person, as the case may
be, in rendering the Officers' Certificate;
(c) a statement that each Authorized Officer or Person, as the case may
be, has made such examination or investigation as, in his or her opinion, is
necessary to enable such Authorized Officer or Person, as the case may be, 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 Authorized Officer
or Person, as the case may be, such condition or covenant has been complied
with.
"Optional Redemption Date" has the meaning set forth in paragraph 4(a) of
Annex I.
PAGE 7
"Optional Redemption Price" has the meaning set forth in paragraph 4(a)
of Annex I.
"Paying Agent" has the meaning set forth in Section 6.2.
"Payment Amount" has the meaning set forth in Section 5.1.
"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.
"Placement Agreement" means the Placement Agreement relating to the
offering and sale of Capital Securities.
"PORTAL" has the meaning set forth in Section 2.6(a)(i).
"Property Account" has the meaning set forth in Section 2.8(c).
"Pro Rata" has the meaning set forth in paragraph 8 of Annex I.
"QIB" means a "qualified institutional buyer" as defined under Rule 144A.
"Quorum" means a majority of the Administrators or, if there are only two
Administrators, both of them.
"Redemption/Distribution Notice" has the meaning set forth in paragraph
4(e) of Annex I.
"Reference Banks" has the meaning set forth in paragraph 2(b)(2) of
Annex I.
"Registrar" has the meaning set forth in Section 6.2.
"Relevant Trustee" has the meaning set forth in Section 4.5(a).
"Resale Restriction Termination Date" means, with respect to any Capital
Security, the date which is the later of (i) two years (or such shorter period
of time as permitted by Rule 144(k) under the Securities Act) after the later
of (y) the date of original issuance of such Capital Security and (z) the last
date on which the Trust or any Affiliate of the Trust was the Holder of such
Capital Security (or any predecessor thereto) and (ii) such later date, if any,
as may be required by any subsequent change in applicable law.
"Responsible Officer" means, with respect to the Institutional Trustee,
any officer within the Corporate Trust Office of the Institutional Trustee with
direct responsibility for the administration of this Declaration, including any
vice-president, any assistant vice-president, any secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or other
officer of the Corporate Trust Office of the Institutional Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means,
PAGE 8
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of that officer's knowledge of and familiarity
with the particular subject.
"Restricted Securities Legend" has the meaning set forth in Section 8.2(c).
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act.
"Securities" means the Common Securities and the Capital Securities.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, or any successor legislation.
"Securities Register" has the meaning set forth in Section 6.2(a)
"Special Event" has the meaning set forth in paragraph 4(a) of Annex I.
"Special Redemption Date" has the meaning set forth in paragraph 4(a) of
Annex I.
"Special Redemption Price" has the meaning set forth in paragraph 4(a) of
Annex I.
"Sponsor" means Chandler (U.S.A.), Inc., an insurance holding company that
is incorporated in Oklahoma, or any permitted successor of the Debenture Issuer
under the Indenture, in its capacity as sponsor of the Trust.
"Statutory Trust Act" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code Section 3801 et seq., as it may be amended from time to time, or
any successor legislation.
"Successor Delaware Trustee" has the meaning set forth in Section 4.5(e).
"Successor Entity" has the meaning set forth in Section 2.15(b).
"Successor Institutional Trustee" has the meaning set forth in Section
4.5(b).
"Successor Securities" has the meaning set forth in Section 2.15(b).
"Super Majority" has the meaning set forth in paragraph 5(b) of Annex I.
"Tax Event" has the meaning set forth in paragraph 4(a) of Annex I.
"Telerate Page 3750" has the meaning set forth in paragraph 2(b)(1) of
Annex I.
PAGE 9
"10% in liquidation amount of the Securities" means Holders of outstanding
Securities voting together as a single class or, as the context may require,
Holders of outstanding Capital 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 upon the redemption, liquidation or otherwise on the date upon
which the voting percentages are determined, plus unpaid Distributions accrued
thereon to such date) of all outstanding Securities of the relevant class.
"Transfer Agent" has the meaning set forth in Section 6.2.
"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 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 in office in accordance
with the terms hereof, and all other Persons who may from time to time be duly
appointed, qualified and serving as Trustees in accordance with the provisions
hereof, and references herein to a Trustee or the Trustees shall refer to such
Person or Persons solely in their capacity as trustees hereunder.
"Trust Property" means (a) the Debentures, (b) any cash on deposit in, or
owing to, the Property Account and (c) all proceeds and rights in respect of
the foregoing and any other property and assets for the time being held or
deemed to be held by the Institutional Trustee pursuant to the trusts of this
Declaration.
"U.S. Person" means a United States Person as defined in Section
7701(a)(30) of the Code.
ARTICLE II
ORGANIZATION
SECTION 2.1. NAME. The Trust is named "Chandler Capital Trust II," as
such name may be modified from time to time by the Administrators following
written notice to the Institutional Trustee and the Holders of the Securities.
The Trust's activities may be conducted under the name of the Trust or any
other name deemed advisable by the Administrators.
SECTION 2.2. OFFICE. The address of the principal office of the Trust,
which shall be in a state of the United States or the District of Columbia, is
1010 Manvel Avenue, Chandler, Oklahoma 74834. On ten Business Days' written
notice to the Institutional Trustee and the Holders of the Securities, the
Administrators may designate another principal office, which shall be in a
state of the United States or the District of Columbia.
SECTION 2.3. PURPOSE. The exclusive purposes and functions of the Trust
are (a) to issue and sell the Securities representing undivided beneficial
interests in the assets of the
PAGE 10
Trust, (b) to invest the gross proceeds from such sale in the Debentures and
(c) except as otherwise limited herein, to engage in only those other
activities deemed necessary, advisable or incidental thereto by the
Institutional Trustee, including, without limitation, those activities
specified in this Declaration. The Trust shall not borrow money, issue debt
or reinvest proceeds derived from investments, pledge any of its assets, or
otherwise undertake (or permit to be undertaken) any activity that would
cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.
SECTION 2.4. AUTHORITY. Except as specifically provided in this
Declaration, the Institutional Trustee shall have exclusive and complete
authority to carry out the purposes of the Trust. An action taken by a Trustee
on behalf of the Trust and in accordance with such Trustee's 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. The Administrators shall have only
those ministerial duties set forth herein with respect to accomplishing the
purposes of the Trust and are not intended to be trustees or fiduciaries with
respect to the Trust or the Holders. The Institutional Trustee shall have the
right, but shall not be obligated except as provided in Section 2.6, to perform
those duties assigned to the Administrators.
SECTION 2.5. TITLE TO PROPERTY OF THE TRUST. Except as provided in
Section 2.8 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
interest in the assets of the Trust.
SECTION 2.6. POWERS AND DUTIES OF THE TRUSTEES AND THE ADMINISTRATORS.
(a) The Trustees and the Administrators shall conduct the affairs of the
Trust in accordance with the terms of this Declaration. Subject to the
limitations set forth in paragraph (b) of this Section, and in accordance with
the following provisions (i) and (ii), the Administrators and, at the direction
of the Administrators, the Trustees, shall have the authority to enter into all
transactions and agreements determined by the Administrators to be appropriate
in exercising the authority, express or implied, otherwise granted to the
Trustees or the Administrators, as the case may be, under this Declaration, and
to perform all acts in furtherance thereof, including without limitation, the
following:
(i) Each Administrator shall have the power, duty and authority,
and is hereby authorized, to act on behalf of the Trust with respect to
the following matters:
(A) the issuance and sale of the Securities;
(B) to cause the Trust to enter into, and to execute, deliver
and perform on behalf of the Trust, such agreements as may be
necessary or desirable in connection with the purposes and function
of the Trust, including agreements with the Paying Agent, a
subscription agreement for
PAGE 11
Debentures between the Trust and the
Sponsor, a subscription agreement for Capital Securities between the
Trust and the purchaser of the Capital Securities and a subscription
agreement for Common Securities between the Trust and the Sponsor;
(C) ensuring compliance with the Securities Act and
applicable securities or blue sky laws of states and other
jurisdictions;
(D) if and at such time determined solely by the Sponsor at
the request of the Holders, assisting in the designation of the
Capital Securities for trading in the Private Offering, Resales and
Trading through the Automatic Linkages ("PORTAL") system if available;
(E) the sending of notices (other than notices of default)
and other information regarding the Securities and the Debentures to
the Holders in accordance with this Declaration, including notice of
any notice received from the Debenture Issuer of its election to
defer payments of interest on the Debentures by extending the
interest payment period under the Indenture;
(F) the appointment of a Paying Agent, Transfer Agent and
Registrar in accordance with this Declaration;
(G) execution and delivery of the Securities in accordance
with this Declaration;
(H) execution and delivery of closing certificates pursuant
to the Placement Agreement and the application for a taxpayer
identification number;
(I) unless otherwise determined by the Holders of a Majority
in liquidation amount of the Securities or as otherwise required by
the Statutory Trust Act, to execute on behalf of the Trust (either
acting alone or together with any or all of the Administrators) any
documents that the Administrators have the power to execute pursuant
to this Declaration;
(J) the taking of any action as the Sponsor or an
Administrator may from time to time determine is necessary, advisable
or incidental to the foregoing to give effect to the terms of this
Declaration for the benefit of the Holders (without consideration of
the effect of any such action on any particular Holder);
(K) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established,
including Distributions, voting rights, redemptions and exchanges,
and to issue relevant notices to the Holders of Capital Securities
and Holders of Common Securities as to such actions and applicable
record dates;
PAGE 12
(L) to duly prepare and file on behalf of the Trust all
applicable tax returns and tax information reports that are required
to be filed with respect to the Trust;
(M) to negotiate the terms of, and the execution and delivery
of, the Placement Agreement providing for the sale of the Capital
Securities;
(N) to employ or otherwise engage employees, agents (who may
be designated as officers with titles), managers, contractors,
advisors, attorneys and consultants and pay reasonable compensation
for such services;
(O) to incur expenses that are necessary, advisable or
incidental to carry out any of the purposes of the Trust;
(P) to give the certificate required by Section 314(a)(4) of
the Trust Indenture Act to the Institutional Trustee, which
certificate may be executed by an Administrator; and
(Q) 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 trust
under the laws of each jurisdiction (other than the State of
Delaware) in which such existence is necessary to protect the limited
liability of the Holders of the Capital Securities or to enable the
Trust to effect the purposes for which the Trust was created.
(ii) As among the Trustees and the Administrators, the
Institutional Trustee shall have the power, duty and authority, and is
hereby authorized, to act on behalf of the Trust with respect to the
following matters:
(A) the establishment of the Property Account;
(B) the receipt of the Debentures;
(C) the collection of interest, principal and any other
payments made in respect of the Debentures in the Property Account;
(D) the distribution through the Paying Agent of amounts owed
to the Holders in respect of the Securities;
(E) the exercise of all of the rights, powers and privileges
of a holder of the Debentures;
(F) the sending of notices of default and other information
regarding the Securities and the Debentures to the Holders in
accordance with this Declaration;
PAGE 13
(G) the distribution of the Trust Property in accordance with
the terms of this Declaration;
(H) to the extent provided in this Declaration, the winding
up of the affairs of and liquidation of the Trust and the
preparation, execution and filing of the certificate of cancellation
with the Secretary of State of the State of Delaware;
(I) after any Event of Default (of which the Institutional
Trustee has knowledge (as provided in Section 2.10(m) hereof))
(PROVIDED, that such Event of Default is not by or with respect to
the Institutional Trustee), the taking of any action that the
Institutional Trustee may from time to time determine is necessary,
advisable or incidental for the foregoing to give effect to the terms
of this Declaration and protect and conserve the Trust Property for
the benefit of the Holders (without consideration of the effect of
any such action on any particular Holder);
(J) 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 trust
under the laws of the State of Delaware to protect the limited
liability of the Holders of the Capital Securities or to enable the
Trust to effect the purposes for which the Trust was created; and
(K) to undertake any actions set forth in Section 317(a) of
the Trust Indenture Act.
(iii) The Institutional Trustee shall have the power and authority,
and is hereby authorized, to act on behalf of the Trust with respect to
any of the duties, liabilities, powers or the authority of the
Administrators set forth in Section 2.6(a)(i)(E) and (F) herein but shall
not have a duty to do any such act unless specifically requested to do so
in writing by the Sponsor, and shall then be fully protected in acting
pursuant to such written request; and in the event of a conflict between
the action of the Administrators and the action of the Institutional
Trustee, the action of the Institutional Trustee shall prevail.
(b) So long as this Declaration remains in effect, the Trust (or the
Trustees or Administrators acting on behalf of the Trust) shall not undertake
any business, activities or transaction except as expressly provided herein
or contemplated hereby. In particular, neither the Trustees nor the
Administrators may cause the Trust to (i) acquire any investments or engage in
any activities not authorized by this Declaration, (ii) sell, assign, transfer,
exchange, mortgage, pledge, set-off or otherwise dispose of any of the Trust
Property or interests therein, including to Holders, except as expressly
provided herein, (iii) take any action that would cause (or in the case of
the Institutional Trustee, to the actual knowledge of a Responsible Officer
would cause) the Trust to fail or cease to qualify as a grantor trust for
United States federal income tax purposes, (iv) incur any indebtedness for
borrowed money or issue any other debt or (v) take or consent to any action
that would result in the placement of a lien on any of the Trust Property.
PAGE 14
The Institutional Trustee shall, at the sole cost and expense of the Trust
subject to reimbursement under Section 9.6(a), defend all claims and demands of
all Persons at any time claiming any lien on any of the Trust Property adverse
to the interest of the Trust or the Holders in their capacity as Holders.
(c) In connection with the issuance and sale of the Capital Securities,
the Sponsor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Sponsor in furtherance of the following prior to the date of this
Declaration are hereby ratified and confirmed in all respects):
(i) the taking of any action necessary to obtain an exemption from
the Securities Act;
(ii) the determination of the jurisdictions in which to take
appropriate action to qualify or register for sale all or part of the
Capital Securities and the determination of any and all such acts, other
than actions which must be taken by or on behalf of the Trust, and the
advisement of and direction to the Trustees of actions they must take on
behalf of the Trust, and the preparation for execution and filing of any
documents to be executed and filed by the Trust or on behalf of the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such jurisdictions in connection with the sale of
the Capital Securities; and
(iii) the taking of any other actions necessary or desirable to
carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the Administrators,
the Institutional Trustee and the Holders of a Majority in liquidation amount
of the Common Securities are authorized and directed to conduct the affairs of
the Trust and to operate the Trust so that (i) the Trust will not be deemed to
be an Investment Company required to be registered under the Investment Company
Act (in the case of the Institutional Trustee, to the actual knowledge of a
Responsible Officer), and (ii) the Trust will not fail to be classified as a
grantor trust for United States federal income tax purposes (in the case of the
Institutional Trustee, to the actual knowledge of a Responsible Officer) and
(iii) the Trust will not take any action inconsistent with the treatment of the
Debentures as indebtedness of the Debenture Issuer for United States federal
income tax purposes (in the case of the Institutional Trustee, to the actual
knowledge of a Responsible Officer). In this connection, the Institutional
Trustee, the Administrators and the Holders of a Majority in liquidation amount
of the Common Securities are authorized to take any action, not inconsistent
with applicable laws or this Declaration, as amended from time to time, that
each of the Institutional Trustee, the Administrators and such Holders
determine in their discretion to be necessary or desirable for such purposes,
even if such action adversely affects the interests of the Holders of the
Capital Securities.
(e) All expenses incurred by the Administrators or the Trustees pursuant
to this Section 2.6 shall be reimbursed by the Sponsor, and the Trustees shall
have no obligations with respect to such expenses.
PAGE 15
(f) The assets of the Trust shall consist of the Trust Property.
(g) Legal title to all Trust Property shall be vested at all times in
the Institutional Trustee (in its capacity as such) and shall be held and
administered by the Institutional Trustee for the benefit of the Trust in
accordance with this Declaration.
(h) If the Institutional Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Declaration and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Institutional Trustee or to such Holder, then and
in every such case the Sponsor, the Institutional Trustee and the Holders
shall, subject to any determination in such proceeding, be restored severally
and respectively to their former positions hereunder, and thereafter all rights
and remedies of the Institutional Trustee and the Holders shall continue as
though no such proceeding had been instituted.
SECTION 2.7. PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES.
The Trust shall not, and the Institutional Trustee and the Administrators
shall not, and the Administrators shall cause the Trust not to, engage in any
activity other than as required or authorized by this Declaration. In
particular, the Trust shall not, and the Institutional Trustee and the
Administrators shall not cause the Trust to:
(a) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of the
Securities pursuant to the terms of this Declaration and of the Securities;
(b) acquire any assets other than as expressly provided herein;
(c) possess Trust Property for other than a Trust purpose;
(d) make any loans or incur any indebtedness other than loans represented
by the Debentures;
(e) possess any power or otherwise act in such a way as to vary the Trust
Property or the terms of the Securities;
(f) issue any securities or other evidences of beneficial ownership of,
or beneficial interest in, the Trust other than the Securities; or
(g) other than as provided in this Declaration (including Annex I), (i)
direct the time, method and place of exercising any trust or power conferred
upon the Debenture Trustee with respect to the Debentures, (ii) waive any past
default that is waivable under the Indenture, (iii) exercise any right to
rescind or annul any declaration that the principal of all the Debentures shall
be due and payable, or (iv) consent to any amendment, modification or
termination of the Indenture or the Debentures where such consent shall be
required unless the Trust shall have received a written opinion of counsel
experienced in such matters to the effect that such amendment, modification or
termination will not cause the Trust to cease to be classified as a grantor
trust for United States federal income tax purposes.
PAGE 16
SECTION 2.8. POWERS AND DUTIES OF THE INSTITUTIONAL TRUSTEE.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Institutional Trustee in trust for the benefit of
the Trust. The right, title and interest of the Institutional Trustee to the
Debentures shall vest automatically in each Person who may hereafter be
appointed as Institutional Trustee in accordance with Section 4.5. Such
vesting and cessation of title shall be effective whether or not conveyancing
documents with regard to the Debentures have been executed and delivered.
(b) The Institutional Trustee shall not transfer its right, title and
interest in the Debentures to the Administrators or to the Delaware Trustee.
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Property Account") in the United States (as defined in
Treasury Regulations Section 301.7701-7), in the name of and under the
exclusive control of the Institutional Trustee, and maintained in the
Institutional Trustee's trust department, on behalf of the Holders of the
Securities and, upon the receipt of payments of funds made in respect of
the Debentures held by the Institutional Trustee, deposit such funds into
the Property Account and make payments to the Holders of the Capital
Securities and Holders of the Common Securities from the Property Account
in accordance with Section 5.1. Funds in the Property Account shall be
held uninvested until disbursed in accordance with this Declaration;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Capital Securities and the
Common Securities to the extent the Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by the
Administrators in accordance with the terms of the Securities, engage in
such ministerial activities as shall be necessary or appropriate to effect
the distribution of the Debentures to Holders of Securities upon the
occurrence of the circumstances specified therefor under the terms of the
Securities.
(d) The Institutional Trustee shall take all actions and perform such
duties as may be specifically required of the Institutional Trustee pursuant to
the terms of the Securities.
(e) The Institutional Trustee may bring or defend, pay, collect,
compromise, arbitrate, resort to legal action with respect to, or otherwise
adjust claims or demands of or against, the Trust (a "Legal Action") which
arise out of or in connection with an Event of Default of which a Responsible
Officer of the Institutional Trustee has actual knowledge or the Institutional
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act; PROVIDED, HOWEVER, that if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Debenture
Issuer to pay interest or premium, if any, on or principal of the Debentures on
the date such interest, premium, if any, or principal is otherwise payable (or
in the case of redemption, on the date of redemption), then a Holder of the
Capital Securities may directly institute a proceeding for enforcement of
payment to such Holder of the
PAGE 17
principal of or premium, if any, or interest on the Debentures having a
principal amount equal to the aggregate liquidation amount of the Capital
Securities of such Holder (a "Direct Action") on or after the respective due
date specified in the Debentures. In connection with such Direct Action, the
rights of the Holders of the Common Securities will be subrogated to the rights
of such Holder of the Capital Securities to the extent of any payment made by
the Debenture Issuer to such Holder of the Capital Securities in such Direct
Action; PROVIDED, HOWEVER, that a Holder of the Common Securities may exercise
such right of subrogation only if no Event of Default with respect to the
Capital Securities has occurred and is continuing.
(f) The Institutional Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds of
the liquidation distributed to the Holders of the Securities pursuant to
the terms of the Securities and this Declaration (including Annex I); or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 4.5.
(g) The Institutional Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a holder of the Debentures under the
Indenture and, if an Event of Default occurs and is continuing, the
Institutional Trustee may, 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 this Declaration (including Annex I) and the terms of the
Securities.
(h) The Institutional Trustee must exercise the powers set forth in this
Section 2.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 2.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust
set out in Section 2.3.
SECTION 2.9. CERTAIN DUTIES AND RESPONSIBILITIES OF THE TRUSTEES AND THE
ADMINISTRATORS.
(a) The Institutional Trustee, before the occurrence of any Event of
Default (of which the Institutional Trustee has knowledge (as provided in
Section 2.10(m) hereof)) and after the curing of all Events of Default 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 Institutional Trustee. In case an Event of Default (of
which the Institutional Trustee has knowledge (as provided in Section 2.10(m)
hereof)), has occurred (that has not been cured or waived pursuant to Section
6.7), the Institutional 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) The duties and responsibilities of the Trustees and the
Administrators shall be as provided by this Declaration and, in the case of
the Institutional Trustee, by the Trust Indenture Act. Notwithstanding the
foregoing, no provision of this Declaration shall require any Trustee or
Administrator to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers,
PAGE 18
if it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity satisfactory to it against such risk or liability is not
reasonably assured to it. Whether or not therein expressly so provided, every
provision of this Declaration relating to the conduct or affecting the
liability of or affording protection to the Trustees or the Administrators
shall be subject to the provisions of this Article. Nothing in this
Declaration shall be construed to release a Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct or bad faith. Nothing in this Declaration shall be construed to
release an Administrator from liability for its own gross negligent action, its
own gross negligent failure to act, or its own willful misconduct or bad faith.
To the extent that, at law or in equity, a Trustee or an Administrator has
duties and liabilities relating to the Trust or to the Holders, such Trustee
or Administrator shall not be liable to the Trust or to any Holder for such
Trustee's or Administrator's good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of the Administrators or the Trustees
otherwise existing at law or in equity, are agreed by the Sponsor and the
Holders to replace such other duties and liabilities of the Administrators or
the Trustees.
(c) All payments made by the Institutional Trustee or a Paying Agent in
respect of the Securities shall be made only from the revenue and proceeds from
the Trust Property and only to the extent that there shall be sufficient
revenue or proceeds from the Trust Property to enable the Institutional Trustee
or a Paying Agent to make payments in accordance with the terms hereof. Each
Holder, by its acceptance of a Security, agrees that it will look solely to the
revenue and proceeds from the Trust Property to the extent legally available
for distribution to it as herein provided and that the Trustees and the
Administrators are not personally liable to it for any amount distributable in
respect of any Security or for any other liability in respect of any Security.
This Section 2.9(c) does not limit the liability of the Trustees expressly set
forth elsewhere in this Declaration or, in the case of the Institutional
Trustee, in the Trust Indenture Act.
(d) No provision of this Declaration shall be construed to relieve the
Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct or bad faith with
respect to matters that are within the authority of the Institutional Trustee
under this Declaration, except that:
(i) the Institutional Trustee shall not be liable for any error or
judgment made in good faith by an Authorized Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(ii) the Institutional Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of a Majority in liquidation amount of
the Capital Securities or the Common Securities, as applicable, relating
to the time, method and place of conducting any proceeding for any remedy
available to the Institutional Trustee, or exercising any trust or power
conferred upon the Institutional Trustee under this Declaration;
PAGE 19
(iii) the Institutional 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 Institutional Trustee deals with similar property for its own
account, subject to the protections and limitations on liability afforded
to the Institutional Trustee under this Declaration and the Trust
Indenture Act;
(iv) the Institutional Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree in writing
with the Sponsor; and money held by the Institutional Trustee need not be
segregated from other funds held by it except in relation to the Property
Account maintained by the Institutional Trustee pursuant to Section
2.8(c)(i) and except to the extent otherwise required by law; and
(v) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Administrators or the Sponsor with their
respective duties under this Declaration, nor shall the Institutional
Trustee be liable for any default or misconduct of the Administrators or
the Sponsor.
SECTION 2.10. CERTAIN RIGHTS OF INSTITUTIONAL TRUSTEE. Subject to the
provisions of Section 2.9:
(a) the Institutional Trustee may conclusively rely and shall fully be
protected in acting or refraining from acting in good faith upon any
resolution, written opinion of counsel, certificate, written representation of
a Holder or transferee, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, appraisal, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties;
(b) if (i) in performing its duties under this Declaration, the
Institutional Trustee is required to decide between alternative courses of
action, (ii) in construing any of the provisions of this Declaration, the
Institutional Trustee finds the same ambiguous or inconsistent with any other
provisions contained herein, or (iii) the Institutional Trustee is unsure of
the application of any provision of this Declaration, then, except as to any
matter as to which the Holders of Capital Securities are entitled to vote under
the terms of this Declaration, the Institutional Trustee may deliver a notice
to the Sponsor requesting the Sponsor's opinion as to the course of action to
be taken and the Institutional Trustee shall take such action, or refrain from
taking such action, as the Institutional Trustee in its sole discretion shall
deem advisable and in the best interests of the Holders, in which event the
Institutional Trustee shall have no liability except for its own negligence,
willful misconduct or bad faith;
(c) any direction or act of the Sponsor or the Administrators
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(d) whenever in the administration of this Declaration, the Institutional
Trustee shall deem it desirable that a matter be proved or established before
undertaking,
PAGE 20
suffering or omitting any action hereunder, the Institutional Trustee (unless
other evidence is herein specifically prescribed) may, in the absence of bad
faith on its part, request and conclusively rely upon an Officers' Certificate
which, upon receipt of such request, shall be promptly delivered by the Sponsor
or the Administrators;
(e) the Institutional Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or reregistration thereof;
(f) the Institutional Trustee may consult with counsel of its selection
(which counsel may be counsel to the Sponsor or any of its Affiliates) and the
advice of such counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon and in accordance with such advice; the
Institutional Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of competent
jurisdiction;
(g) the Institutional Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Declaration at the request
or direction of any of the Holders pursuant to this Declaration, unless such
Holders shall have offered to the Institutional Trustee security or indemnity
reasonably satisfactory to it against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or direction;
PROVIDED, that nothing contained in this Section 2.10(g) shall be taken to
relieve the Institutional Trustee, upon the occurrence of an Event of Default
(of which the Institutional Trustee has knowledge (as provided in Section
2.10(m) hereof)) that has not been cured or waived, of its obligation to
exercise the rights and powers vested in it by this Declaration;
(h) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond, debenture, note or other evidence of indebtedness or other
paper or document, unless requested in writing to do so by one or more Holders,
but the Institutional Trustee may make such further inquiry or investigation
into such facts or matters as it may see fit;
(i) the Institutional Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents or attorneys and the Institutional Trustee shall not be responsible for
any misconduct or negligence on the part of, or for the supervision of, any
such agent or attorney appointed with due care by it hereunder;
(j) whenever in the administration of this Declaration the Institutional
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the
Institutional Trustee (i) may request instructions from the Holders of the
Common Securities and the Capital Securities, which instructions may be given
only by the Holders of the same proportion in liquidation amount of the Common
Securities and the Capital Securities as would be entitled to direct the
Institutional Trustee under the terms of the Common Securities and the Capital
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
PAGE 21
instructions are received, and (iii) shall be fully protected in acting in
accordance with such instructions;
(k) except as otherwise expressly provided in this Declaration, the
Institutional Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Declaration;
(l) when the Institutional Trustee incurs expenses or renders services in
connection with a Bankruptcy Event, 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;
(m) the Institutional Trustee shall not be charged with knowledge of an
Event of Default unless a Responsible Officer of the Institutional Trustee has
actual knowledge of such event or the Institutional Trustee receives written
notice of such event from any Holder, except that the Institutional Trustee
shall be deemed to have knowledge of any Event of Default pursuant to Sections
5.01(a) or 5.01(b) of the Indenture (other than an Event of Default resulting
from the default in the payment of Additional Interest if the Institutional
Trustee does not have actual knowledge or written notice that such payment is
due and payable);
(n) any action taken by the Institutional Trustee or its agents hereunder
shall bind the Trust and the Holders of the Securities, and the signature of
the Institutional Trustee or its agents alone shall be sufficient and effective
to perform any such action and no third party shall be required to inquire as
to the authority of the Institutional Trustee to so act or as to its compliance
with any of the terms and provisions of this Declaration, both of which shall
be conclusively evidenced by the Institutional Trustee's or its agent's taking
such action; and
(o) no provision of this Declaration shall be deemed to impose any duty
or obligation on the Institutional Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in
any jurisdiction in which it shall be illegal, or in which the Institutional
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts, or to exercise any such right, power, duty or
obligation, and no permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
SECTION 2.11. DELAWARE TRUSTEE. Notwithstanding any other provision of
this Declaration other than Section 4.2, the Delaware Trustee shall not be
entitled to exercise any powers, and the Delaware Trustee shall not have any of
the duties and responsibilities of any of the Trustees or the Administrators
specified in this Declaration (except as may be required under the Statutory
Trust Act). Except as set forth in Section 4.2, the Delaware Trustee shall be
a Trustee for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Statutory Trust Act.
SECTION 2.12. EXECUTION OF DOCUMENTS. Unless otherwise determined in
writing by the Institutional Trustee, and except as otherwise required by the
Statutory Trust Act, the Institutional Trustee, or any one or more of the
Administrators, as the case may be, is authorized to execute and deliver on
behalf of the Trust any documents, agreements, instruments
PAGE 22
or certificates that the Trustees or the Administrators, as the case may be,
have the power and authority to execute pursuant to Section 2.6.
SECTION 2.13. 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 Trust Property or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration, the Debentures or the Securities.
SECTION 2.14. DURATION OF TRUST. The Trust, unless dissolved pursuant to
the provisions of Article VII hereof, shall have existence for 5 years after
the Maturity Date.
SECTION 2.15. 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
Person, except as described in this Section 2.15 and except with respect to
the distribution of Debentures to Holders of Securities pursuant to Section
7.1(a)(iv) of this Declaration or Section 4 of Annex I.
(b) The Trust may, with the consent of the Administrators (which consent
will not be unreasonably withheld) and without the consent of the Institutional
Trustee, the Delaware Trustee or the Holders of the Capital Securities,
consolidate, amalgamate, merge with or into, or be replaced by, or convey,
transfer or lease its properties and assets as an entirety or substantially as
an entirety to a trust organized as such under the laws of any state; provided,
that:
(i) if the Trust is not the survivor, such successor entity (the
"Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Securities (the "Successor
Securities") so that the Successor Securities rank the same as the
Securities rank with respect to Distributions and payments upon
Liquidation, redemption and otherwise;
(ii) the Sponsor expressly appoints, as the holder of the
Debentures, a trustee of the Successor Entity that possesses the same
powers and duties as the Institutional Trustee;
(iii) the Capital Securities or any Successor Securities are listed
or quoted, or any Successor Securities will be listed or quoted upon
notification of issuance, on any national securities exchange or with
another organization on which the Capital Securities are then listed or
quoted, if any;
(iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the rating on the Capital
Securities or
PAGE 23
any Successor Securities to be downgraded or withdrawn by any nationally
recognized statistical rating organization, if the Capital Securities are
then rated;
(v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders of the Securities or any
Successor Securities in any material respect (other than with respect to
any dilution of such Holders' interests in the Successor Entity);
(vi) such Successor Entity, if any, has a purpose substantially
identical to that of the Trust;
(vii) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Trust has received a
written opinion of a nationally recognized independent counsel to the
Trust experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders of the Securities or any
Successor Securities in any material respect (other than with respect
to any dilution of such Holders' interests in the Successor Entity);
(B) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor the
Successor Entity will be required to register as an Investment
Company under the Investment Company Act; and
(C) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, 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 guarantees the obligations of the Successor
Entity under the Successor Securities to the same extent provided by the
Indenture, the Guarantee, the Debentures and this Declaration; and
(ix) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Institutional Trustee
shall have received an Officers' Certificate of the Administrators and
an opinion of counsel, each to the effect that all conditions precedent
of this paragraph (b) to such transaction have been satisfied.
(c) Notwithstanding Section 2.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by, or convey,
transfer or lease its properties and assets as an entirety or substantially as
an entirety to, any other Person or permit any other Person to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation,
PAGE 24
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.
ARTICLE III
SPONSOR
SECTION 3.1. SPONSOR'S PURCHASE OF COMMON SECURITIES. On the Closing
Date, the Sponsor will purchase all of the Common Securities issued by the
Trust, in an amount at least equal to 3% of the capital of the Trust, at the
same time as the Capital Securities are sold.
SECTION 3.2. RESPONSIBILITIES OF THE SPONSOR. In connection with the
issue and sale of the Capital Securities, the Sponsor shall have the exclusive
right and responsibility and sole decision to engage in, or direct the
Administrators to engage in, the following activities:
(a) to determine the jurisdictions in which to take appropriate action to
qualify or register for sale of all or part of the Capital 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, advisable or incidental thereto in order to comply with the
applicable laws of any such jurisdictions;
(b) to prepare for filing and request the Administrators to cause the
filing by the Trust, as may be appropriate, of an application to the PORTAL
system, for listing or quotation upon notice of issuance of any Capital
Securities, as requested by the Holders of not less than a Majority in
liquidation amount of the Capital Securities; and
(c) to negotiate the terms of and/or execute and deliver on behalf of the
Trust, the Placement Agreement and other related agreements providing for the
sale of the Capital Securities.
ARTICLE IV
TRUSTEES AND ADMINISTRATORS
SECTION 4.1. NUMBER OF TRUSTEES. The number of Trustees initially shall
be two, and:
(a) at any time before the issuance of any Securities, the Sponsor may,
by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the Holder of a Majority in liquidation
amount of the Common Securities voting as a class at a meeting of the Holder
of the Common Securities; PROVIDED, HOWEVER, that there shall be a Delaware
Trustee if required by Section 4.2; and there shall always be one Trustee who
shall be the Institutional Trustee, and such Trustee may also serve as Delaware
Trustee if it meets the applicable requirements, in which case Section 2.11
shall have no application to such entity in its capacity as Institutional
Trustee.
PAGE 25
SECTION 4.2. DELAWARE TRUSTEE. If required by the Statutory Trust Act,
one Trustee (the "Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware and a
U.S. Person at least 21 years of age; or
(b) if not a natural person, an entity which is organized under the laws
of the United States or any state thereof or the District of Columbia, has its
principal place of business in the State of Delaware, and otherwise meets the
requirements of applicable law, including Section 3807 of the Statutory Trust
Act.
The initial Delaware Trustee shall be Wilmington Trust Company.
SECTION 4.3. INSTITUTIONAL TRUSTEE; ELIGIBILITY.
(a) There shall at all times be one Trustee which shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) not offer or provide credit or credit enhancement to the
Trust; and
(iii) be a banking corporation or national association organized and
doing business under the laws of the United States of America or any state
thereof or of the District of Columbia and authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of
at least fifty million U.S. dollars ($50,000,000), and subject to
supervision or examination by federal, state or District of Columbia
authority. If such corporation or national association 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 4.3(a)(iii), the combined capital and surplus of
such corporation or national association 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 Institutional Trustee shall cease to be eligible
to so act under Section 4.3(a), the Institutional Trustee shall immediately
resign in the manner and with the effect set forth in Section 4.5.
(c) If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Institutional Trustee shall either eliminate such interest or resign, to the
extent and in the manner provided by, and subject to this Declaration.
(d) The initial Institutional Trustee shall be Wilmington Trust Company.
SECTION 4.4. ADMINISTRATORS. Each Administrator shall be a U.S. Person.
There shall at all times be at least one Administrator. Except where a
requirement for action by a specific number of Administrators is expressly
set forth in this Declaration and except with
PAGE 26
respect to any action the taking of which is the subject of a meeting of the
Administrators, any action required or permitted to be taken by the
Administrators may be taken by, and any power of the Administrators may be
exercised by, or with the consent of, any one such Administrator acting alone.
SECTION 4.5. APPOINTMENT, REMOVAL AND RESIGNATION OF THE TRUSTEES AND THE
ADMINISTRATORS.
(a) No resignation or removal of any Trustee (the "Relevant Trustee") and
no appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of this Section.
(b) Subject to Section 4.5(a), a Relevant Trustee may resign at any time
by giving written notice thereof to the Holders of the Securities and by
appointing a successor Relevant Trustee. Upon the resignation of the
Institutional Trustee, the Institutional Trustee shall appoint a successor by
requesting from at least three Persons meeting the eligibility requirements
their expenses and charges to serve as the successor Institutional Trustee on a
form provided by the Administrators, and selecting the Person who agrees to the
lowest expense and charges (the "Successor Institutional Trustee"). If the
instrument of acceptance by the successor Relevant Trustee required by this
Section shall not have been delivered to the Relevant Trustee within 60 days
after the giving of such notice of resignation or delivery of the instrument of
removal, the Relevant Trustee may petition, at the expense of the Trust, any
federal, state or District of Columbia court of competent jurisdiction for the
appointment of a successor Relevant Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a Relevant
Trustee. The Institutional Trustee shall have no liability for the selection
of such successor pursuant to this Section.
(c) Unless an Event of Default shall have occurred and be continuing, any
Trustee may be removed at any time by an act of the Holders of a Majority in
liquidation amount of the Common Securities. If any Trustee shall be so
removed, the Holders of the Common Securities, by act of the Holders of a
Majority in liquidation amount of the Common Securities delivered to the
Relevant Trustee, shall promptly appoint a successor Relevant Trustee, and such
successor Relevant Trustee shall comply with the applicable requirements of
this Section. If an Event of Default shall have occurred and be continuing,
the Institutional Trustee or the Delaware Trustee, or both of them, may be
removed by the act of the Holders of a Majority in liquidation amount of the
Capital Securities, delivered to the Relevant Trustee (in its individual
capacity and on behalf of the Trust). If any Trustee shall be so removed, the
Holders of Capital Securities, by act of the Holders of a Majority in
liquidation amount of the Capital Securities then outstanding delivered to
the Relevant Trustee, shall promptly appoint a successor Relevant Trustee or
Trustees, and such successor Relevant Trustee shall comply with the applicable
requirements of this Section. If no successor Relevant Trustee shall have been
so appointed by the Holders of a Majority in liquidation amount of the Capital
Securities and accepted appointment in the manner required by this Section
within 30 days after delivery of an instrument of removal, the Relevant Trustee
or any Holder who has been a Holder of the Securities for at least six months
may, on behalf of himself and all others similarly situated, petition any
federal, state or District of Columbia court of competent jurisdiction for the
appointment of a successor Relevant Trustee.
PAGE 27
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a successor Relevant Trustee or Trustees.
(d) The Institutional Trustee shall give notice of each resignation and
each removal of a Trustee and each appointment of a successor Trustee to all
Holders and to the Sponsor. Each notice shall include the name of the
successor Relevant Trustee and the address of its Corporate Trust Office if it
is the Institutional Trustee.
(e) Notwithstanding the foregoing or any other provision of this
Declaration, in the event a Delaware Trustee who is a natural person dies or is
adjudged by a court to have become incompetent or incapacitated, the vacancy
created by such death, incompetence or incapacity may be filled by the
Institutional Trustee following the procedures in this Section (with the
successor being a Person who satisfies the eligibility requirement for a
Delaware Trustee set forth in this Declaration) (the "Successor Delaware
Trustee").
(f) In case of the appointment hereunder of a successor Relevant Trustee,
the retiring Relevant Trustee and each successor Relevant Trustee with respect
to the Securities shall execute and deliver an amendment hereto wherein each
successor Relevant Trustee shall accept such appointment and which (a) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Securities and the Trust and (b) shall add to or change any of the provisions
of this Declaration as shall be necessary to provide for or facilitate the
administration of the Trust by more than one Relevant Trustee, it being
understood that nothing herein or in such amendment shall constitute such
Relevant Trustees co-trustees and upon the execution and delivery of such
amendment the resignation or removal of the retiring Relevant Trustee shall
become effective to the extent provided therein and each such successor
Relevant Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Relevant
Trustee; but, on request of the Trust or any successor Relevant Trustee, such
retiring Relevant Trustee shall duly assign, transfer and deliver to such
successor Relevant Trustee all Trust Property, all proceeds thereof and money
held by such retiring Relevant Trustee hereunder with respect to the Securities
and the Trust subject to the payment of all unpaid fees, expenses and
indemnities of such retiring Relevant Trustee.
(g) No Institutional Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
(h) The Holders of the Capital Securities will have no right to vote to
appoint, remove or replace the Administrators, which voting rights are vested
exclusively in the Holders of the Common Securities.
(i) Any Successor Delaware Trustee shall file an amendment to the
Certificate of Trust with the Secretary of State of the State of Delaware
identifying the name and principal place of business of such Delaware Trustee
in the State of Delaware.
PAGE 28
SECTION 4.6. VACANCIES AMONG TRUSTEES. If a Trustee ceases to hold
office for any reason and the number of Trustees is not reduced pursuant to
Section 4.1, or if the number of Trustees is increased pursuant to Section 4.1,
a vacancy shall occur. A resolution certifying the existence of such vacancy
by the Trustees or, if there are more than two, a majority of the Trustees
shall be conclusive evidence of the existence of such vacancy. The vacancy
shall be filled with a Trustee appointed in accordance with Section 4.5.
SECTION 4.7. 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 dissolve, terminate or
annul the Trust or terminate this Declaration. Whenever a vacancy in the
number of Trustees shall occur, until such vacancy is filled by the appointment
of a Trustee in accordance with Section 4.5, the Institutional Trustee shall
have all the powers granted to the Trustees and shall discharge all the duties
imposed upon the Trustees by this Declaration.
SECTION 4.8. MEETINGS OF THE TRUSTEES AND THE ADMINISTRATORS. Meetings
of the Trustees or the Administrators shall be held from time to time upon the
call of any Trustee or Administrator, as applicable. Regular meetings of the
Trustees and the Administrators, respectively, may be in person in the United
States or by telephone, at a place (if applicable) and time fixed by resolution
of the Trustees or the Administrators, as applicable. Notice of any in-person
meetings of the Trustees or the Administrators 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 Trustees or the Administrators or any committee
thereof shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of a Trustee or an Administrator, as the case may be, at a meeting
shall constitute a waiver of notice of such meeting except where a Trustee or
an Administrator, as the case may be, 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 Trustees or the Administrators, as the case may
be, may be taken at a meeting by vote of a majority of the Trustees or the
Administrators present (whether in person or by telephone) and eligible to vote
with respect to such matter; PROVIDED, that, in the case of the Administrators,
a Quorum is present, or without a meeting by the unanimous written consent of
the Trustees or the Administrators, as the case may be. Meetings of the
Trustees and the Administrators together shall be held from time to time upon
the call of any Trustee or Administrator.
SECTION 4.9. DELEGATION OF POWER. (a) Any Trustee or any Administrator,
as the case may be, may, by power of attorney consistent with applicable law,
delegate to any other natural person over the age of 21 that is a U.S. Person
his or her power for the purpose of executing any documents, instruments or
other writings contemplated in Section 2.6.
(b) The Trustees shall have power to delegate from time to time to such
of their number or to any officer of the Trust that is a U.S. Person, the doing
of such things and the execution of such instruments or other writings either
in the name of the Trust or the names of
PAGE 29
the Trustees or otherwise as the 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 4.10. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS. Any Person into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either
may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as
the case may be, shall be a party, or any Person succeeding to all or
substantially all the corporate trust business of the Institutional Trustee
or the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided such Person shall be otherwise qualified
and eligible under this Article and, PROVIDED, FURTHER, that such Person shall
file an amendment to the Certificate of Trust with the Secretary of State of
the State of Delaware as contemplated in Section 4.5(i).
ARTICLE V
DISTRIBUTIONS
SECTION 5.1. DISTRIBUTIONS. Holders shall receive Distributions in
accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Capital Securities and the Common Securities
in accordance with the preferences set forth in their respective terms. If and
to the extent that the Debenture Issuer makes a payment of interest (including
any Additional Interest or Deferred Interest) or premium, if any, on and/or
principal of the Debentures held by the Institutional Trustee (the amount of
any such payment being a "Payment Amount"), the Institutional Trustee shall and
is directed, to the extent funds are available in the Property Account for that
purpose, to make a distribution (a "Distribution") of the Payment Amount to
Holders. For the avoidance of doubt, funds in the Property Account shall not
be distributed to Holders to the extent of any taxes payable by the Trust, in
the case of withholding taxes, as determined by the Institutional Trustee or
any Paying Agent and, in the case of taxes other than withholding tax taxes,
as determined by the Administrators in a written notice to the Institutional
Trustee.
ARTICLE VI
ISSUANCE OF SECURITIES
SECTION 6.1. GENERAL PROVISIONS REGARDING SECURITIES.
(a) The Administrators shall on behalf of the Trust issue one series of
capital securities, evidenced by a certificate substantially in the form of
Exhibit A-1, representing undivided beneficial interests in the assets of the
Trust and having such terms as are set forth in Annex I (the "Capital
Securities"), and one series of common securities, evidenced by a certificate
substantially in the form of Exhibit A-2, representing undivided beneficial
interests in the assets of the Trust and having such terms as are set forth in
Annex I (the "Common Securities"). The Trust shall issue no securities or
other interests in the assets of the Trust other than the Capital Securities
and the Common Securities. The Capital Securities rank PARI PASSU with and
payment thereon shall be made Pro Rata with, the Common Securities except that,
where an Event of Default has occurred and is continuing, the rights of Holders
of the Common
PAGE 30
Securities to payment in respect of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights to
payment of the Holders of the Capital Securities.
(b) The Certificates shall be signed on behalf of the Trust by one or
more Administrators. Such signature shall be the facsimile or manual signature
of any Administrator. In case any Administrator of the Trust who shall have
signed any of the Securities shall cease to be such Administrator 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 Administrator. Any Certificate may be signed on
behalf of the Trust by such person who, at the actual date of execution of such
Certificate, shall be an Administrator of the Trust, although at the date of
the execution and delivery of the Declaration any such person was not such an
Administrator. A Capital Security shall not be valid until the Certificate
evidencing it is authenticated by the manual or facsimile signature of an
Authorized Officer of the Institutional Trustee. Such signature shall be
conclusive evidence that the Certificate evidencing such Capital Security has
been authenticated under this Declaration. Upon written order of the Trust
signed by one Administrator, the Institutional Trustee shall authenticate one
or more Certificates evidencing the Capital Securities for original issue. The
Institutional Trustee may appoint an authenticating agent that is a U.S. Person
acceptable to the Sponsor to authenticate Certificates evidencing Capital
Securities. A Common Security need not be so authenticated and shall be valid
upon execution by one or more Administrators.
(c) 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.
(d) 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, and each Holder thereof shall be entitled to the benefits
provided by this Declaration.
(e) Every Person, by virtue of having become a Holder 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
Guarantee.
SECTION 6.2. PAYING AGENT, TRANSFER AGENT, CALCULATION AGENT AND
REGISTRAR.
(a) The Trust shall maintain in Wilmington, Delaware (i) an office or
agency where the Securities may be presented for payment (the "Paying Agent")
and (ii) an office or agency where Securities may be presented for registration
of transfer or exchange (the "Transfer Agent"). The Trust shall keep or cause
to be kept at such office or agency a register (the "Securities Register") for
the purpose of registering Securities and transfers and exchanges of
Securities, such Securities Register to be held by a registrar (the
"Registrar"). The Administrators may appoint the Paying Agent, the Registrar
and the Transfer Agent, and may appoint one or more additional Paying Agents,
one or more co-Registrars, or one or more co-Transfer Agents in such other
locations as it shall determine. The term "Paying Agent" includes any
additional Paying Agent, the term "Registrar" includes any additional Registrar
or co-Registrar and the term "Transfer Agent" includes any additional Transfer
Agent or co-Transfer Agent. The Administrators may change any Paying Agent,
Transfer Agent or Registrar at any
PAGE 31
time without prior notice to any Holder. The Administrators shall notify the
Institutional Trustee of the name and address of any Paying Agent, Transfer
Agent and Registrar not a party to this Declaration. The Administrators hereby
initially appoint the Institutional Trustee to act as Paying Agent, Transfer
Agent and Registrar for the Capital Securities and the Common Securities at its
Corporate Trust Office. The Institutional Trustee or any of its Affiliates in
the United States may act as Paying Agent, Transfer Agent or Registrar.
(b) The Trust shall also appoint a Calculation Agent, which shall
determine the Coupon Rate in accordance with the terms of the Securities. The
Trust initially appoints the Institutional Trustee as Calculation Agent.
SECTION 6.3. FORM AND DATING.
(a) The Capital Securities shall be evidenced by one or more
Certificates, and the Institutional Trustee's certificate of authentication
thereon shall be, substantially in the form of Exhibit A-1, and the Common
Securities shall be evidenced by one or more Certificates substantially in the
form of Exhibit A-2, each of which is hereby incorporated in and expressly made
a part of this Declaration. Certificates may be typed, printed, lithographed
or engraved or may be produced in any other manner as is reasonably acceptable
to the Administrators, as conclusively evidenced by their execution thereof.
Certificates evidencing Securities may have letters, numbers, notations or
other marks of identification or designation and such legends or endorsements
required by law, stock exchange rule, agreements to which the Trust is subject,
if any, or usage (PROVIDED, that any such notation, legend or endorsement is
in a form acceptable to the Sponsor). The Trust at the direction of the
Sponsor shall furnish any such legend not contained in Exhibit A-1 to the
Institutional Trustee in writing. Each Capital Security Certificate shall be
dated the date of its authentication. The terms and provisions of the
Securities set forth in Annex I and the forms of Certificates set forth in
Exhibits A-1 and A-2 are part of the terms of this Declaration and to the
extent applicable, the Institutional Trustee, the Delaware Trustee, the
Administrators and the Sponsor, by their execution and delivery of this
Declaration, expressly agree to such terms and provisions and to be bound
thereby. Capital Securities will be issued only in blocks having an aggregate
liquidation amount of not less than $100,000.
(b) The Capital Securities are being offered and sold by the Trust
initially pursuant to the Placement Agreement in definitive form, registered
in the name of the Holder thereof, without coupons and with the Restricted
Securities Legend.
SECTION 6.4. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If (a)
any mutilated Certificate should be surrendered to the Registrar, or if the
Registrar shall receive evidence to its satisfaction of the destruction, loss
or theft of any Certificate and (b) the related Holder shall deliver to the
Registrar, the Administrators and the Institutional Trustee such security or
indemnity as may be reasonably required by them to keep each of them harmless;
then, in the absence of notice that such Certificate shall have been acquired
by a bona fide purchaser, an Administrator on behalf of the Trust shall execute
(and in the case of a Capital Security Certificate, the Institutional Trustee
shall authenticate) and deliver to such Holder, 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, the Registrar or the Administrators may require such Holder
to pay a sum sufficient
PAGE 32
to cover any tax or other governmental charge that may be imposed in connection
therewith. Any Certificate executed and delivered 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 6.5. TEMPORARY CERTIFICATES. Until definitive Certificates are
ready for delivery, the Administrators may prepare and execute on behalf of
the Trust and, in the case of Capital Security Certificates, the Institutional
Trustee shall authenticate, temporary Certificates. Temporary Certificates
shall be substantially in form of definitive Certificates but may have
variations that the Administrators consider appropriate for temporary
Certificates. Without unreasonable delay, the Administrators shall prepare
and execute on behalf of the Trust and, in the case of the Capital Security
Certificates, the Institutional Trustee shall authenticate definitive
Certificates in exchange for temporary Certificates.
SECTION 6.6. CANCELLATION. The Administrators at any time may deliver
Certificates evidencing Securities to the Institutional Trustee for
cancellation. The Registrar shall forward to the Institutional Trustee any
Certificates evidencing Securities surrendered to it for registration of
transfer, redemption or payment. The Institutional Trustee shall promptly
cancel all Certificates surrendered for registration of transfer, payment,
replacement or cancellation and shall dispose of such canceled Certificates as
the Administrators direct. The Administrators may not issue new Certificates
to replace Certificates evidencing Securities that have been paid or, except
for Certificates surrendered for purposes of the transfer or exchange of the
Securities evidenced thereby, that have been delivered to the Institutional
Trustee for cancellation.
SECTION 6.7. RIGHTS OF HOLDERS; WAIVERS OF PAST DEFAULTS.
(a) The legal title to the Trust Property is vested exclusively in the
Institutional Trustee (in its capacity as such) in accordance with Section 2.5,
and the Holders shall not have any right or title therein other than the
undivided beneficial interest in the assets of the Trust conferred by their
Securities and they shall have no right to call for any partition or division
of property, profits or rights of the Trust except as described below. The
Securities shall be personal property giving only the rights specifically set
forth therein and in this Declaration. The Securities shall have no, and the
issuance of the Securities shall not be subject to, preemptive or other similar
rights and when issued and delivered to Holders against payment of the purchase
price therefor, the Securities will be fully paid and nonassessable by the
Trust.
(b) For so long as any Capital Securities remain outstanding, if, upon an
Indenture Event of Default, the Debenture Trustee fails or the holders of not
less than 25% in principal amount of the outstanding Debentures fail to declare
the principal of all of the Debentures to be immediately due and payable, the
Holders of not less than a Majority in liquidation amount of the Capital
Securities then outstanding shall have the right to make such declaration by a
notice in writing to the Institutional Trustee, the Sponsor and the Debenture
Trustee.
(c) At any time after the acceleration of maturity of the Debentures has
been made and before a judgment or decree for payment of the money due has been
obtained by the
PAGE 33
Debenture Trustee as provided in the Indenture, if the Institutional Trustee,
subject to the provisions hereof, fails to annul any such acceleration and
waive such default, the Holders of a Majority in liquidation amount of the
Capital Securities, by written notice to the Institutional Trustee, the Sponsor
and the Debenture Trustee, may rescind and annul such acceleration and its
consequences if:
(i) the Sponsor has paid or deposited with the Debenture Trustee a
sum sufficient to pay
(A) All overdue installments of interest on all of the
Debentures;
(B) any accrued Deferred Interest on all of the Debentures;
(C) all payments on any Debentures that have become due
otherwise than by such acceleration and interest and Deferred
Interest thereon at the rate borne by the Debentures; and
(D) all sums paid or advanced by the Debenture Trustee under
the Indenture and the reasonable compensation, documented expenses,
disbursements and advances of the Debenture Trustee and the
Institutional Trustee, their agents and counsel; and
(ii) all Events of Default with respect to the Debentures, other
than the non-payment of the principal of or premium, if any, on the
Debentures that has become due solely by such acceleration, have been
cured or waived as provided in Section 5.07 of the Indenture.
(d) The Holders of a Majority in liquidation amount of the Capital
Securities may, on behalf of the Holders of all the Capital Securities, waive
any past Default or Event of Default, except a Default or Event of Default
arising from the non-payment of principal of or premium, if any, or interest
on the Debentures (unless such Default or Event of Default has been cured and
a sum sufficient to pay all matured installments of interest, premium and
principal due otherwise than by acceleration has been deposited with the
Debenture Trustee) or a Default or Event of Default in respect of a covenant
or provision that under the Indenture cannot be modified or amended without the
consent of the holder of each outstanding Debenture. No such rescission shall
affect any subsequent default or impair any right consequent thereon.
(e) Upon receipt by the Institutional Trustee of written notice declaring
such an acceleration, or rescission and annulment thereof, by Holders of any
part of the Capital Securities, a record date shall be established for
determining Holders of outstanding Capital Securities entitled to join in such
notice, which record date shall be at the close of business on the day the
Institutional Trustee receives such notice. The Holders on such record date,
or their duly designated proxies, and only such Persons, shall be entitled to
join in such notice, whether or not such Holders remain Holders after such
record date; PROVIDED, that, unless such declaration of acceleration, or
rescission and annulment, as the case may be, shall have become effective by
virtue of the requisite percentage having joined in such notice prior to the
day that is 90 days after such record date, such notice of declaration of
acceleration, or rescission and annulment, as the case may be, shall
automatically and without further action by any Holder be
PAGE 34
canceled and of no further effect. Nothing in this paragraph shall prevent
a Holder, or a proxy of a Holder, from giving, after expiration of such 90-day
period, a new written notice of declaration of acceleration, or rescission and
annulment thereof, as the case may be, that is identical to a written notice
that has been canceled pursuant to the proviso to the preceding sentence, in
which event a new record date shall be established pursuant to the provisions
of this Section.
(f) Except as otherwise provided in this Section, the Holders of a
Majority in liquidation amount of the Capital Securities may, on behalf of the
Holders of all the Capital Securities, waive any past Default or Event of
Default and its consequences. Upon such waiver, any such Default or Event of
Default shall cease to exist, and any Default or Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Declaration, but no such waiver shall extend to any subsequent or other Default
or Event of Default or impair any right consequent thereon.
ARTICLE VII
DISSOLUTION AND TERMINATION OF TRUST
SECTION 7.1. DISSOLUTION AND TERMINATION OF TRUST. (a) The Trust shall
dissolve on the first to occur of :
(i) unless earlier dissolved, on January 8, 2039, the expiration
of the term of the Trust;
(ii) a Bankruptcy Event with respect to the Sponsor, the Trust or
the Debenture Issuer;
(iii) (other than in connection with a merger, consolidation or
similar transaction permitted by the Indenture, this Declaration or the
Guarantee, as the case may be) the filing of a certificate of dissolution
or its equivalent with respect to the Sponsor or upon the revocation of
the charter of the Sponsor and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iv) the distribution of all of the Debentures to the Holders of
the Securities, upon exercise of the right of the Holders of all of the
outstanding Common Securities to dissolve the Trust as provided in Annex I
hereto;
(v) the entry of a decree of judicial dissolution of any Holder
of the Common Securities, the Sponsor, the Trust or the Debenture Issuer;
(vi) when all of the Securities are then subject to redemption and
the amounts necessary for redemption thereof shall have been paid to the
Holders in accordance with the terms of the Securities; or
(vii) before the issuance of any Securities, with the consent of all
of the Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event referred
to in Section 7.1(a), and after satisfaction of liabilities to creditors of
the Trust as required by
PAGE 35
applicable law, including Section 3808 of the Statutory Trust Act, and subject
to the terms set forth in Annex I, the Institutional Trustee 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 2.9 and Article IX shall survive the
termination of the Trust.
ARTICLE VIII
TRANSFER OF INTERESTS
SECTION 8.1. GENERAL. (a) Where a Holder of Capital Securities delivers
to the Registrar in accordance with this Declaration a request to register a
transfer of such Holder's Capital Securities or to exchange them for an equal
aggregate liquidation amount of Capital Securities represented by different
Certificates, the Registrar shall register the transfer or make the exchange if
the requirements specified in Article VIII for such transfer or exchange are
met. To facilitate registrations of transfers and exchanges, the Trust shall
execute and the Institutional Trustee shall authenticate Capital Security
Certificates at the Registrar's request.
(b) Upon issuance of the Common Securities, the Sponsor shall acquire and
retain beneficial and record ownership of the Common Securities and, for so
long as the Securities remain outstanding, the Sponsor shall maintain 100%
ownership of the Common Securities; PROVIDED, HOWEVER, that any permitted
successor of the Debenture Issuer under the Indenture may succeed to the
Sponsor's ownership of the Common Securities.
(c) Capital 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 Capital Securities. To the fullest extent permitted by
applicable law, any transfer or purported transfer of any Security not made in
accordance with this Declaration shall be null and void and will be deemed to
be of no legal effect whatsoever and any such purported transferee shall be
deemed not to be the Holder of such Capital Securities for any purpose,
including, but not limited to, the receipt of Distributions on such Capital
Securities, and such transferee shall be deemed to have no interest whatsoever
in such Capital Securities.
(d) The Registrar shall provide in the Securities Register for the
registration of Securities and of transfers of Securities, which will be
effected without charge but only upon payment (with such indemnity as the
Registrar may reasonably require) in respect of any tax or other governmental
charges that may be imposed in relation to it. Upon its receipt of the
documents required under this Section 8.1(d) for registration of transfer of
any Securities, the Registrar shall register in the Securities Register, in
the name of the designated transferee or transferees, the Securities being
transferred and thereupon, for all purposes of this Declaration, such transfer
shall be effective and such transferee or transferees shall be, and such
transferor shall no longer be, the Holder of the transferred Securities. Upon
the registration of transfer of a Security pursuant to the terms of this
Declaration in the name of the new Holder thereof, such Security shall
constitute the same Security as the Security so transferred and shall be
entitled to the same benefits under this Declaration as the Security so
transferred. The Registrar shall, and is authorized to, record and register in
the Securities Register the transfer of a Security upon the Registrar's receipt
of originals or copies (which may be by facsimile or other form of electronic
PAGE 36
transmission) of a written instrument of transfer in form reasonably
satisfactory to the Registrar duly executed by the Holder or such Holder's
attorney duly authorized in writing, accompanied, if such Security is being
transferred prior to the Resale Restriction Termination Date by a certificate
substantially in the form set forth as Exhibit B, C or D, as applicable,
hereto, executed by the transferor or transferee, as applicable; thereupon,
the Registrar is authorized to confirm in writing to the transferee and, if
requested, to the transferor of such Security that such transfer has been
registered in the Securities Register and that such transferee is the Holder
of such Security. The Certificate evidencing the Security so transferred, duly
endorsed by the transferor, shall be surrendered to the Registrar at the time
the transfer conditions specified in the immediately preceding sentence are
satisfied or within five (5) Business Days after the Registrar has registered
the transfer of such Security on the Securities Register, and promptly after
such surrender, the Trust shall execute and, in the case of a Capital Security
Certificate, the Institutional Trustee shall, and is authorized to,
authenticate a Certificate in the name of the transferee as the new Holder of
the Security evidenced thereby. Until the Certificate evidencing the Security
so transferred is surrendered to the Registrar, such Security may not be
transferred by such new Holder. Each Certificate surrendered in connection
with a registration of transfer shall be canceled by the Institutional Trustee
pursuant to Section 6.6. A transferee of a Security shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the
registration of such transfer in the Securities Register. Each such transferee
shall be deemed to have agreed to be bound by this Declaration.
(e) Neither the Trust nor the Registrar shall be required (i) to issue
Certificates representing Securities or register the transfer of, or exchange
any Securities during a period beginning at the opening of business 15 days
before the day of any selection of Securities for redemption and ending at the
close of business on the earliest date on which the relevant notice of
redemption is deemed to have been given to all Holders of the Securities to be
redeemed, or (ii) 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 8.2. TRANSFER PROCEDURES AND RESTRICTIONS.
(a) Prior to the Resale Restriction Termination Date, Certificates
evidencing Capital Securities shall bear the Restricted Securities Legend. The
Restricted Securities Legend on any Certificate evidencing outstanding Capital
Securities shall not be removed unless there is delivered to the Trust such
satisfactory evidence, which may include an opinion of counsel, as may be
reasonably required by the Trust, that neither the Restricted Securities Legend
nor the restrictions on transfer set forth therein are required to ensure that
transfers thereof comply with the provisions of the Securities Act or that such
Securities are not "restricted" within the meaning of Rule 144 under the
Securities Act. Upon provision of such satisfactory evidence, the
Institutional Trustee, at the written direction of the Trust, shall
authenticate and deliver Capital Securities Certificates that do not bear the
Restricted Securities Legend in exchange for the Capital Securities
Certificates bearing the Restricted Securities Legend.
(b) Prior to the Resale Restriction Termination Date, without the written
consent of the Sponsor, Capital Securities may only be transferred as follows:
(i) to a QIB if the instrument of transfer is accompanied by a certificate of
the transferor substantially in the form set forth as Exhibit C hereto or
(ii) to an "accredited investor" within the meaning of
PAGE 37
Rule 501(a)(1),(2),(3),(7) or (8) under the Securities Act if the instrument of
transfer is if accompanied by a certificate of the transferee substantially in
the form set forth as Exhibit B hereto; or (iii) to a non-"U.S. Person" in an
"offshore transaction" under, and within the meaning of, Regulation S under the
Securities Act if the instrument of transfer is accompanied by a certificate of
the transferee substantially in the form set forth as Exhibit D hereto. Each
certificate furnished pursuant to this Section 8.2(b) may be an original or a
copy (which may be furnished by facsimile or other form of electronic
transmission).
(c) The Capital Securities may not be transferred prior to the Resale
Restriction Termination Date except in compliance with restrictions on transfer
set forth in the legend set forth below (the "Restricted Securities Legend"),
and except as otherwise contemplated in Section 8.2(a), prior to the Resale
Restriction Termination Date, each Certificate evidencing outstanding Capital
Securities shall bear the Restricted Securities Legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY OR ANY
INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE
CASE MAY BE, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY
INTEREST OR PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (i)
TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) UNDER THE
SECURITIES ACT) AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND
(Z) THE LAST DATE ON WHICH THE TRUST OR ANY AFFILIATE (AS DEFINED IN RULE 405
UNDER THE SECURITIES ACT) OF THE TRUST WAS THE HOLDER OF THIS SECURITY OR SUCH
INTEREST OR PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (ii) SUCH LATER
DATE, IF ANY, AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW,
ONLY (A) TO THE DEBENTURE ISSUER OR THE TRUST, (B) PURSUANT TO RULE 144A UNDER
THE SECURITIES ACT ("RULE 144A"), TO A PERSON THE HOLDER REASONABLY BELIEVES IS
A "QUALIFIED INSTITUTIONAL BUYER," AS DEFINED IN RULE 144A, THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C)
PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (1),
(2), (3), (7) OR (8) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING
THIS SECURITY OR SUCH INTEREST OR PARTICIPATION FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH AN ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION
OF THE SECURITIES ACT, (D) PURSUANT TO OFFERS AND SALES TO NON-US PERSONS THAT
OCCUR OUTSIDE THE UNITED STATES PURSUANT TO
PAGE 38
REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE RIGHT OF THE DEBENTURE ISSUER AND THE TRUST PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER PURSUANT TO CLAUSE (C) OR (E) ABOVE TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM IN ACCORDANCE WITH THE AMENDED AND RESTATED DECLARATION OF TRUST, A
COPY OF WHICH MAY BE OBTAINED FROM THE DEBENTURE ISSUER OR THE TRUST. THE
HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS
ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, AGREES THAT IT WILL COMPLY
WITH THE FOREGOING RESTRICTIONS.
THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY
ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, ALSO AGREES, REPRESENTS
AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT
OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH A "PLAN"), OR AN
ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S
INVESTMENT IN THE ENTITY AND NO PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY
ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, UNLESS
SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER
U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60,
91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND
HOLDING OF THIS SECURITY OR SUCH INTEREST OR PARTICIPATION IS NOT PROHIBITED BY
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE
OR HOLDING. ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND
HOLDING HEREOF OR THEREOF, AS THE CASE MAY BE, THAT EITHER (i) IT IS NOT AN
EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO
WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING
ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY
USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE,
OR (ii) SUCH PURCHASE AND HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO
APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL DELIVER
TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
MAY BE REQUIRED BY THE
PAGE 39
AMENDED AND RESTATED DECLARATION OF TRUST TO CONFIRM THAT THE TRANSFER COMPLIES
WITH THE FOREGOING RESTRICTIONS.
THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING
A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 AND MULTIPLES OF $1,000 IN
EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF THIS SECURITY IN A BLOCK HAVING A
LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO
LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO
BE THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN FOR ANY
PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
SECURITY OR SUCH INTEREST OR PARTICIPATION, AND SUCH PURPORTED TRANSFEREE SHALL
BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN.
(d) Capital Securities may only be transferred in minimum blocks of
$100,000 aggregate liquidation amount (100 Capital Securities) and multiples of
$1,000 in excess thereof. Any attempted transfer of Capital Securities in a
block having an aggregate liquidation amount of less than $100,000 shall be
deemed to be void and of no legal effect whatsoever. Any such purported
transferee shall be deemed not to be a Holder of such Capital Securities for
any purpose, including, but not limited to, the receipt of Distributions on
such Capital Securities, and such purported transferee shall be deemed to have
no interest whatsoever in such Capital Securities.
SECTION 8.3. DEEMED SECURITY HOLDERS. The Trust, the Administrators, the
Trustees, the Paying Agent, the Transfer Agent or the Registrar may treat the
Person in whose name any Security shall be registered on the Securities
Register of the Trust as the sole Holder and owner of such Security 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 Security on the part of any other Person, whether or not
the Trust, the Administrators, the Trustees, the Paying Agent, the Transfer
Agent or the Registrar shall have actual or other notice thereof.
ARTICLE IX
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, 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 shall
not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of the
Securities any deficit upon dissolution of the Trust or otherwise.
PAGE 40
(b) The Holder of the Common Securities shall be liable for all of the
debts and obligations of the Trust (other than with respect to the Securities)
to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Statutory Trust Act, the Holders
of the 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, except as otherwise
specifically set forth herein.
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 (other than an
Administrator) shall be liable for any such loss, damage or claim incurred by
reason of such Indemnified Person's negligence, willful misconduct or bad faith
with respect to such acts or omissions and except that an Administrator shall
be liable for any such loss, damage or claim incurred by reason of such
Administrator's gross negligence, willful misconduct or bad faith 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, if selected by such Indemnified Person,
has been selected by such Indemnified Person with reasonable care by or on
behalf of the Trust, including information, opinions, reports or statements as
to the value and amount of the assets, liabilities, profits, losses or any
other facts pertinent to the existence and amount of assets from which
Distributions to Holders of Securities might properly be paid.
SECTION 9.3. FIDUCIARY DUTY. (a) To the extent that, at law or in
equity, an Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to any other Covered Person, an
Indemnified Person acting under this Declaration shall not be liable to the
Trust or to any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to the
extent that they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity (other than the duties imposed on the
Institutional Trustee under the Trust Indenture Act), are agreed by the parties
hereto to replace such other duties and liabilities of the Indemnified Person.
(b) 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
PAGE 41
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 9.4. INDEMNIFICATION. (a)
(i) The Sponsor shall indemnify, to the fullest extent permitted
by law, any 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 such Person is or was an Indemnified Person against expenses
(including attorneys' fees and expenses), judgments, fines and amounts
paid in settlement actually
and reasonably incurred by such Person in connection with such action,
suit or proceeding if such Person acted in good faith and in a manner such
Person 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 such 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 Indemnified Person did not
act in good faith and in a manner which such Person 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
such conduct was unlawful.
(ii) The Sponsor shall indemnify, to the fullest extent permitted
by law, any 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 such Person is or was an Indemnified Person against
expenses (including attorneys' fees and expenses) actually and reasonably
incurred by such Person in connection with the defense or settlement of
such action or suit if such Person acted in good faith and in a manner
such Person 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 Indemnified
Person shall have been adjudged to be liable to the Trust unless and only
to the extent that the Court of Chancery of Delaware or the court in which
such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances
of the case, such Person is fairly and reasonably entitled to indemnity
for such expenses which such Court of Chancery or such other court shall
deem proper.
(iii) To the extent that an Indemnified Person shall be successful
on the merits or otherwise (including dismissal of an action without
prejudice or the settlement of an action without admission of liability)
in defense of any action, suit or proceeding referred to in paragraphs
(i) and (ii) of this Section 9.4(a), or in defense of any claim, issue or
matter therein, such Person shall be indemnified, to
PAGE 42
the fullest extent permitted by law, against expenses (including
attorneys' fees and expenses) actually and reasonably incurred by such
Person in connection therewith.
(iv) Any indemnification of an Administrator under paragraphs
(i) and (ii) of this Section 9.4(a) (unless ordered by a court) shall be
made by the Sponsor only as authorized in the specific case upon a
determination that indemnification of the Indemnified Person is proper in
the circumstances because such Person has met the applicable standard of
conduct set forth in said paragraphs (i) and (ii). Such determination
shall be made (A) by the Administrators by a majority vote of a Quorum
consisting of such Administrators who were not parties to such action,
suit or proceeding, (B) if such a Quorum is not obtainable, or, even if
obtainable, if a Quorum of disinterested Administrators so directs, by
independent legal counsel in a written opinion, or (C) by the Common
Security Holder of the Trust.
(v) To the fullest extent permitted by law, expenses (including
attorneys' fees and expenses) incurred by an 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 Sponsor in advance of the final disposition of
such action, suit or proceeding upon receipt of an undertaking by or on
behalf of such Indemnified Person to repay such amount if it shall
ultimately be determined that such Person is not entitled to be
indemnified by the Sponsor as authorized in this Section 9.4(a).
Notwithstanding the foregoing, no advance shall be made by the Sponsor if
a determination is reasonably and promptly made (1) in the case of a
Company Indemnified Person (A) by the Administrators by a majority vote of
a Quorum of disinterested Administrators, (B) if such a Quorum is not
obtainable, or, even if obtainable, if a Quorum of disinterested
Administrators so directs, by independent legal counsel in a written
opinion or (C) by the Common Security Holder of the Trust, that, based
upon the facts known to the Administrators, counsel or the Common Security
Holder at the time such determination is made, such Indemnified Person
acted in bad faith or in a manner that such Person either believed to be
opposed to or did not believe to be in the best interests of the Trust,
or, with respect to any criminal proceeding, that such Indemnified Person
believed or had reasonable cause to believe such conduct was unlawful, or
(2) in the case of a Fiduciary Indemnified Person, by independent legal
counsel in a written opinion that, based upon the facts known to the
counsel at the time such determination is made, such Indemnified Person
acted in bad faith or in a manner that such Indemnified Person either
believed to be opposed to or did not believe to be in the best interests
of the Trust, or, with respect to any criminal proceeding, that such
Indemnified Person believed or had reasonable cause to believe such
conduct was unlawful. In no event shall any advance be made (i) to a
Company Indemnified Person in instances where the Administrators,
independent legal counsel or the Common Security Holder reasonably
determine that such Person deliberately breached such Person's duty to the
Trust or its Common or Capital Security Holders or (ii) to a Fiduciary
Indemnified Person in instances where independent legal counsel promptly
and reasonably determines in a written opinion that such
PAGE 43
Person deliberately breached such Person's duty to the Trust or its Common
or Capital Security Holders.
(b) The Sponsor shall indemnify, to the fullest extent permitted by
applicable law, each Indemnified Person from and against any and all loss,
damage, liability, tax (other than taxes based on the income of such
Indemnified Person), penalty, expense or claim of any kind or nature whatsoever
incurred by such Indemnified Person arising out of or in connection with or by
reason of the creation, administration or termination of the Trust, or any act
or omission of such Indemnified Person in good faith on behalf of the Trust and
in a manner such Indemnified Person reasonably believed to be within the scope
of authority conferred on such Indemnified Person by this Declaration, except
that no Indemnified Person shall be entitled to be indemnified in respect of
any loss, damage, liability, tax, penalty, expense or claim incurred by such
Indemnified Person by reason of negligence, willful misconduct or bad faith
with respect to such acts or omissions.
(c) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 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 Sponsor or Capital Security
Holders of the Trust or otherwise, both as to action in such Person's official
capacity and as to action in another capacity while holding such office. All
rights to indemnification under this Section shall be deemed to be provided by
a contract between the Sponsor and each Indemnified Person who serves in such
capacity at any time while this Section is in effect. Any repeal or
modification of this Section shall not affect any rights or obligations then
existing.
(d) The Sponsor or the Trust may purchase and maintain insurance on
behalf of any Person who is or was an Indemnified Person against any liability
asserted against such Person and incurred by such Person in any such capacity,
or arising out of such Person's status as such, whether or not the Sponsor
would have the power to indemnify such Person against such liability under the
provisions of this Section.
(e) For purposes of this Section, 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 with respect to the resulting or surviving entity as such Person would
have with respect to such constituent entity if its separate existence had
continued.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section shall, unless otherwise provided when
authorized or ratified, continue as to a Person who has ceased to be an
Indemnified Person and shall inure to the benefit of the heirs, executors and
administrators of such a Person.
(g) The provisions of this Section shall survive the termination of this
Declaration or the earlier resignation or removal of the Institutional Trustee.
The obligations of
PAGE 44
the Sponsor under this Section to compensate and indemnify the Trustees and to
pay or reimburse the Trustees for expenses, disbursements and advances shall
constitute additional indebtedness hereunder. Such additional indebtedness
shall be secured by a lien prior to that of the Securities upon all property
and funds held or collected by the Trustees as such, except funds held in trust
for the benefit of the Holders of particular Capital Securities, PROVIDED, that
the Sponsor is the Holder of the Common Securities.
SECTION 9.6 OUTSIDE BUSINESSES. Any Covered Person, the Sponsor, the
Delaware Trustee and the Institutional Trustee (subject to Section 4.3(c)) may
engage in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the
business of the Trust, and the Trust and the Holders of Securities shall have
no rights by virtue of this Declaration in and to such independent ventures or
the income or profits derived therefrom, and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed
wrongful or improper. None of any Covered Person, the Sponsor, the Delaware
Trustee or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such
opportunity is of a character that, if presented to the Trust, could be taken
by the Trust, and any Covered Person, the Sponsor, the Delaware Trustee and
the Institutional Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Covered Person, the Delaware
Trustee and the Institutional Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the
Sponsor, or may act as depositary for, trustee or agent for, or act on any
committee or body of holders of, securities or other obligations of the Sponsor
or its Affiliates.
SECTION 9.6 COMPENSATION; FEE. (a) The Sponsor agrees:
(i) to pay to the Trustees from time to time such compensation for
all services rendered by them hereunder as the parties shall agree in
writing from time to time (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust); and
(ii) except as otherwise expressly provided herein, to reimburse
each of the Trustees upon request for all reasonable, documented expenses,
disbursements and advances incurred or made by such Person in accordance
with any provision of this Declaration (including the reasonable
compensation and the expenses and disbursements of such Person's agents
and counsel), except any such expense, disbursement or advance
attributable to such Person's negligence, willful misconduct or bad faith.
(b) The provisions of this Section shall survive the dissolution of the
Trust and the termination of this Declaration and the removal or resignation of
any Trustee.
PAGE 45
ARTICLE X
ACCOUNTING
SECTION 10.1. FISCAL YEAR. The fiscal year (the "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
Administrators shall keep, or cause to be kept, at the principal office of
the Trust in the United States, as defined for purposes of Treasury
Regulations Section 301.7701-7, 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.
(b) The Sponsor shall cause the Administrators to deliver by
hardcopy or electronic transmission to each Holder of Securities: (1)
within 45 days after the end of each quarterly fiscal period other than
year end, (i) unaudited consolidated financial statements of the Sponsor
(including balance sheet and income statement) covering such period and
(ii) an Officer's Certificate of the Sponsor to the effect specified in
Exhibit D hereto; (2) within 60 days after the end of each year end, (i)
unaudited consolidated financial statements of the Sponsor (including
balance sheet and income statement) covering the related annual period and
(ii) an Officer's Certificate of the Sponsor to the effect specified in
Exhibit D hereto; (3) within the earlier of (y) 90 days after the end of
each year end and (z) such earlier number of days prescribed by the
Commission for the filing with it of a Form 10-K by companies subject to
the informational reporting requirements of the Exchange Act, (i) audited
consolidated financial statements of the Sponsor (including balance sheet
and income statement) covering the related annual period, (ii) the report
of the independent accountants with respect to such financial statements
and (iii) an Officer's Certificate of the Sponsor detailing any material
differences between the unaudited financial statements for such annual
period delivered pursuant to clause (2)(i) above and those delivered
pursuant to this clause; and (4) within 7 days after the filing thereof,
each Form 10-K and Form 10-Q that is prepared by the Sponsor in respect of
the Sponsor or the Trust and filed with the Commission in accordance with
the Exchange Act, if any; and (5) if the Sponsor is not then (y) subject
to Section 13 or 15(d) of the Exchange Act or (z) exempt from reporting
pursuant to Rule 12g3-2(b) thereunder, the information required to be
provided by Rule 144A(d)(4) under the Securities Act unless all of such
information has been previously delivered to Holders under clause (1),
(2) or (3) above.
(c) The Administrators shall cause to be duly prepared and delivered to
each of the Holders of Securities Form 1099 or such other 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 Administrators shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
PAGE 46
(d) The Administrators shall cause to be duly prepared in the United
States, as defined for purposes of Treasury Regulations Section 301.7701-7,
and filed 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 Administrators on behalf
of the Trust with any state or local taxing authority.
(e) So long as the only Holder of the Capital Securities is InCapS
Funding II, Ltd. or a trustee thereof, the Administrators will cause copies of
the annual financial statements of the Sponsor and/or Affiliates that are filed
with the insurance regulator in each jurisdiction in which the Sponsor or any
such Affiliate is incorporated to be delivered by hardcopy or electronic
transmission to the Holder promptly following their filing.
SECTION 10.3. BANKING. The Trust shall maintain one or more bank accounts
in the United States, as defined for purposes of Treasury Regulations Section
301.7701-7, in the name and for the sole benefit of the Trust; PROVIDED,
HOWEVER, that all payments of funds in respect of the Debentures held by the
Institutional Trustee shall be made directly to the Property Account and no
other funds of the Trust shall be deposited in the Property Account. The sole
signatories for such accounts (including the Property Account) shall be
designated by the Institutional Trustee.
SECTION 10.4. WITHHOLDING. The Institutional Trustee or any Paying Agent
and the Administrators shall comply with all withholding requirements under
United States federal, state and local law. The Institutional Trustee or any
Paying Agent shall request, and each Holder shall provide to the Institutional
Trustee or any Paying Agent, such forms or certificates as are necessary to
establish an exemption from withholding with respect to the Holder, and any
representations and forms as shall reasonably be requested by the Institutional
Trustee or any Paying Agent to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Administrators 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
Institutional Trustee or any Paying Agent 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 to the
Holder in the amount of the withholding. In the event of any claimed
overwithholding, Holders shall be limited to an action against the applicable
jurisdiction. If the amount required to be withheld was not withheld from
actual Distributions made, the Institutional Trustee or any Paying Agent may
reduce subsequent Distributions by the amount of such withholding.
ARTICLE XI
AMENDMENTS AND MEETINGS
SECTION 11.1. AMENDMENTS. (a) Except as otherwise provided in this
Declaration or by any applicable terms of the Securities, this Declaration may
only be amended by a written instrument approved and executed by
(i) the Institutional Trustee,
PAGE 47
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee,
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Administrators, the Administrators, and
(iv) the Holders of a Majority in liquidation amount of the Common
Securities.
(b) Notwithstanding any other provision of this Article XI, no amendment
shall be made, and any such purported amendment shall be void and ineffective:
(i) unless the Institutional Trustee shall have first received
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the Sponsor
or the Trust) that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the Securities)
and that all conditions precedent to the execution and delivery of
such amendment have been satisfied; or
(ii) if the result of such amendment would be to
(A) cause the Trust to cease to be classified for purposes of
United States federal income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act.
(c) Except as provided in Section 11.1(d), (e) or (g), no amendment shall
be made, and any such purported amendment shall be void and ineffective, unless
the Holders of a Majority in liquidation amount of the Capital Securities shall
have consented to such amendment.
(d) In addition to and notwithstanding any other provision in this
Declaration, without the consent of each affected Holder, this Declaration may
not be amended to (i) change the amount or timing of any Distribution on the
Securities or any redemption or liquidation provisions applicable to 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
(ii) restrict the right of a Holder to institute suit for the enforcement of
any Distributions or other amounts on or after their due date.
PAGE 48
(e) Sections 9.1(b) and 9.1(c) and this Section shall not be amended
without the consent of all of the Holders of the Securities.
(f) The rights of the Holders of the Capital Securities and Common
Securities, as applicable, under Article IV 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 Capital Securities
or Common Securities, as applicable.
(g) This Declaration may be amended by the Institutional Trustee and the
Holder of the Common Securities without the consent of the Holders of the
Capital 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; or
(iv) modify, eliminate or add to any provision of this Declaration
to such extent as may be necessary or desirable, including, without
limitation, to ensure that the Trust will be classified for United States
federal income tax purposes at all times as a grantor trust and will not
be required to register as an Investment Company under the Investment
Company Act (including without limitation to conform to any change in Rule
3a-5, Rule 3a-7 or any other applicable rule under the Investment Company
Act or written change in interpretation or application thereof by any
legislative body, court, government agency or regulatory authority);
PROVIDED, HOWEVER, that no such amendment contemplated in clause (i), (ii),
(iii) or (iv) shall adversely affect the powers, preferences, rights or
interests of Holders of Capital Securities.
SECTION 11.2. MEETINGS OF THE HOLDERS OF THE SECURITIES; ACTION BY WRITTEN
CONSENT.
(a) Meetings of the Holders of the Capital Securities or the Common
Securities may be called at any time by the Administrators (or as provided in
the terms of such Securities) to consider and act on any matter on which
Holders of such Securities are entitled to act under the terms of this
Declaration, the terms of such Securities or the rules of any stock exchange on
which the Capital Securities are listed or admitted for trading, if any. The
Administrators shall call a meeting of the Holders of such Securities if
directed to do so by the Holders of not less than 10% in liquidation amount of
such Securities. Such direction shall be given by delivering to the
Administrators one or more notices in a writing stating that the signing
Holders of such 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 the Securities exercising the right to call a meeting and only
those Securities represented by such Certificates shall be counted for purposes
of determining whether the required percentage set forth in the second sentence
of this paragraph has been met.
PAGE 49
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of the
Securities:
(i) Notice of any such meeting shall be given to all the Holders
of the 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 the Securities is permitted or
required under this Declaration or the rules of any stock exchange on
which the Capital Securities are listed or admitted for trading, if any,
such vote, consent or approval may be given at a meeting of the Holders of
the Securities. Any action that may be taken at a meeting of the Holders
of the Securities may be taken without a meeting if a consent in writing
setting forth the action so taken is signed by the Holders of the
Securities owning not less than the minimum liquidation amount of
Securities that would be necessary to authorize or take such action at a
meeting at which all Holders of the 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 the Securities entitled
to vote who have not consented in writing. The Administrators may specify
that any written ballot submitted to the Holders of the Securities for the
purpose of taking any action without a meeting shall be returned to the
Trust within the time specified by the Administrators.
(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 the
Securities executing it. Except as otherwise provided herein, all matters
relating to the giving, voting or validity of proxies shall be governed by
the General Corporation Law of the State of Delaware relating to proxies,
and judicial interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders of the Securities were stockholders of a
Delaware corporation. Each meeting of the Holders of the Securities shall
be conducted by the Administrators or by such other Person that the
Administrators may designate.
(iii) Unless the Statutory Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Capital Securities are then listed or admitted for
trading, if any, otherwise provides, the Administrators, 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 the
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; PROVIDED, HOWEVER, that each meeting shall be
conducted in the United States (as that term is defined in Treasury
Regulations Section 301.7701-7).
PAGE 50
ARTICLE XII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 12.1. REPRESENTATIONS AND WARRANTIES OF INSTITUTIONAL TRUSTEE.
The Trustee that acts as initial Institutional Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, and each
Successor Institutional Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Institutional Trustee's acceptance of its
appointment as Institutional Trustee, that:
(a) the Institutional Trustee is a banking corporation or national
association with trust powers, duly organized, validly existing and in good
standing under the laws of the State of Delaware or the United States of
America, respectively, 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 Institutional Trustee has a combined capital and surplus of at
least fifty million U.S. dollars ($50,000,000);
(c) the Institutional Trustee is not an Affiliate of the Sponsor, nor
does the Institutional Trustee offer or provide credit or credit enhancement
to the Trust;
(d) the execution, delivery and performance by the Institutional Trustee
of this Declaration has been duly authorized by all necessary action on the
part of the Institutional Trustee, and this Declaration has been duly executed
and delivered by the Institutional Trustee, and under Delaware law (excluding
any securities laws) constitutes a legal, valid and binding obligation of the
Institutional Trustee, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, reorganization, moratorium, insolvency and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of whether
considered in a proceeding in equity or at law);
(e) the execution, delivery and performance of this Declaration by the
Institutional Trustee does not conflict with or constitute a breach of the
charter or by-laws of the Institutional Trustee; and
(f) no consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority governing the trust powers
of the Institutional Trustee is required for the execution, delivery or
performance by the Institutional Trustee of this Declaration.
SECTION 12.2. REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE. The
Trustee that acts as initial Delaware Trustee represents and warrants to the
Trust and to the Sponsor at the date of this Declaration, and 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) if it is not a natural person, the Delaware Trustee is duly
organized, validly existing and in good standing under the laws of the State
of Delaware;
PAGE 51
(b) if it is not a natural person, the execution, delivery and
performance by the Delaware Trustee of this Declaration has been duly
authorized by all necessary corporate action on the part of the Delaware
Trustee, and this Declaration has been duly executed and delivered by the
Delaware Trustee, and under Delaware law (excluding any securities laws)
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 considered in a proceeding
in equity or at law);
(c) if it is not a natural person, the execution, delivery and
performance of this Declaration by the Delaware Trustee does not conflict with
or constitute a breach of the charter or by-laws of the Delaware Trustee;
(d) it has trust power and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this Declaration;
(e) no consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority governing the trust powers of
the Delaware Trustee is required for the execution, delivery or performance by
the Delaware Trustee of this Declaration; and
(f) the Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, it is an entity which has its
principal place of business in the State of Delaware and, in either case, a
Person that satisfies for the Trust the requirements of Section 3807 of the
Statutory Trust Act.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. NOTICES. All notices provided for in this Declaration shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied (which telecopy shall be followed by notice delivered or
mailed by first class mail) or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Administrators at the Trust's
mailing address set forth below (or such other address as the Trust may give
notice of to the Holders of the Securities):
Chandler Capital Trust II
c/o Chandler (U.S.A.), Inc.
1010 Manvel Avenue
Chandler, Oklahoma 74834
Attention: R. Patrick Gilmore
Telecopy: 405-258-4520
Telephone: 405-258-0804
(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
Holders of the Securities):
PAGE 52
Wilmington Trust Company
Rodney Square North
100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Telecopy: 302-651-8882
Telephone: 302-651-1000
(c) if given to the Institutional Trustee, at the Institutional Trustee's
mailing address set forth below (or such other address as the Institutional
Trustee may give notice of to the Holders of the Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Telecopy: 302-651-8882
Telephone: 302-651-1000
(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 Trust):
Chandler (U.S.A.), Inc.
1010 Manvel Avenue
Chandler, Oklahoma 74834
Attention: R. Patrick Gilmore
Telecopy: 405-258-4520
Telephone: 405-258-0804
(e) if given to any other Holder, at the address set forth on the books
and records of the Trust.
All such notices shall be deemed to have been given when received in person,
telecopied with receipt confirmed, or mailed by first class mail, postage
prepaid, except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the
date of such refusal or inability to deliver.
SECTION 13.2. GOVERNING LAW. This Declaration and the rights and
obligations of the parties hereunder shall be governed by and interpreted in
accordance with the law of the State of Delaware and all rights, obligations
and remedies shall be governed by such laws without regard to the principles
of conflict of laws of the State of Delaware or any other jurisdiction that
would call for the application of the law of any jurisdiction other than the
State of Delaware.
PAGE 53
SECTION 13.3. SUBMISSION TO JURISDICTION.
(a) Each of the parties hereto agrees that any suit, action or proceeding
arising out of or based upon this Declaration, or the transactions contemplated
hereby, may be instituted in any of the courts of the State of New York and the
United States District Courts, in each case located in the Borough of
Manhattan, City and State of New York, and further agrees to submit to the
jurisdiction of any competent court in the place of its corporate domicile in
respect of actions brought against it as a defendant. In addition, each such
party irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of such suit,
action or proceeding brought in any such court and irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum and irrevocably waives any right to which it
may be entitled on account of its place of corporate domicile. Each such party
hereby irrevocably waives any and all right to trial by jury in any legal
proceeding arising out of or relating to this Declaration or the transactions
contemplated hereby. Each such party agrees that final judgment in any
proceedings brought in such a court shall be conclusive and binding upon it and
may be enforced in any court to the jurisdiction of which it is subject by a
suit upon such judgment.
(b) Each of the Sponsor, the Trustees, the Administrators and the Holder
of the Common Securities irrevocably consents to the service of process on it
in any such suit, action or proceeding by the mailing thereof by registered or
certified mail, postage prepaid, to it at its address given in or pursuant to
Section 13.1 hereof.
(c) To the extent permitted by law, nothing herein contained shall
preclude any party from effecting service of process in any lawful manner or
from bringing any suit, action or proceeding in respect of this Declaration in
any other state, country or place.
SECTION 13.4. INTENTION OF THE PARTIES. It is the intention of the
parties hereto that the Trust be classified for United States federal income
tax purposes as a grantor trust. The provisions of this Declaration shall be
interpreted to further this intention of the parties.
SECTION 13.5. 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 13.6. 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 or not so expressed.
SECTION 13.7. 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 13.8. COUNTERPARTS. This Declaration may contain more than one
counterpart of the signature page and this Declaration may be executed by the
affixing of the
PAGE 54
signature of each of the Trustees and Administrators to any 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.
PAGE 55
IN WITNESS WHEREOF, the undersigned have caused this Declaration to be
duly executed as of the day and year first above written.
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By: /s/ Denise M. Geran
-------------------------
Denise M. Geran
Vice President
WILMINGTON TRUST COMPANY,
as Institutional Trustee
By: /s/ Denise M. Geran
-------------------------
Denise M. Geran
Vice President
CHANDLER (U.S.A.), INC.
as Sponsor
By: /s/ Mark T. Paden
-------------------------
Mark T. Paden
President
/s/ W. Brent LaGere
-----------------------------
W. Brent LaGere
Administrator
/s/ Mark T. Paden
-----------------------------
Mark T. Paden
Administrator
/s/ Mark C. Hart
-----------------------------
Mark C. Hart
Administrator
PAGE A-I-1
ANNEX I
TERMS OF
CAPITAL SECURITIES AND COMMON SECURITIES
Pursuant to Section 6.1 of the Amended and Restated Declaration of Trust,
dated as of December 16, 2003 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Capital Securities and the Common
Securities (collectively, the "Securities") are set out below (each capitalized
term used but not defined herein has the meaning set forth in the Declaration):
1. Designation and Number.
(a) Capital Securities. 7,000 Capital Securities of Chandler Capital
Trust II (the "Trust"), with an aggregate liquidation amount with respect to
the assets of the Trust of Seven Million Dollars ($7,000,000) and a liquidation
amount with respect to the assets of the Trust of $1,000 per Capital Security,
are hereby designated for the purposes of identification only as the
"InCapS (SM)" (the "Capital Securities"). The Capital Security Certificates
evidencing the Capital Securities shall be substantially in the form of
Exhibit A-1 to the Declaration, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice or
to conform to the rules of any stock exchange on which the Capital Securities
are listed, if any.
(b) Common Securities. 217 Common Securities of the Trust (the "Common
Securities") will be evidenced by Common Security Certificates substantially in
the form of Exhibit A-2 to the Declaration, with such changes and additions
thereto or deletions therefrom as may be required by ordinary usage, custom or
practice. In the absence of an Event of Default, the Common Securities will
have an aggregate liquidation amount with respect to the assets of the Trust of
Two Hundred Seventeen Thousand Dollars ($217,000) and a liquidation amount with
respect to the assets of the Trust of $1,000 per Common Security.
2. DISTRIBUTIONS. (a) Distributions payable on each Security will be
payable at a floating rate of interest per annum, which, with respect to any
Distribution Period (as defined herein), will be equal to LIBOR, as determined
on the LIBOR Determination Date for such Distribution Period, plus 4.10% (the
"Coupon Rate"); PROVIDED, that the Coupon Rate for any Distribution Period
prior to the Distribution Period commencing on the Distribution Payment Date
(as defined herein) in January 2009 may not exceed 12.5% per annum; PROVIDED,
FURTHER, that the Coupon Rate for any Distribution Period may not exceed the
Interest Rate (as defined in the Indenture) for the related Interest Period
(as defined in the Indenture). Distributions in arrears for more than one
Distribution Period will bear interest thereon, compounded quarterly, at the
applicable Coupon Rate for each Distribution Period thereafter (to the extent
permitted by applicable law). The term "Distributions", as used herein,
includes cash Distributions, any such compounded Distributions and any
Additional Interest payable on the Debentures unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect
of the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds legally available in the Property Account
therefor. The amount of Distributions payable
PAGE A-I-2
for any Distribution Period will be computed on the basis of a 360-day year and
the actual number of days elapsed in such Distribution Period.
The term "Distribution Period", as used herein, means (i) in the case of
the first Distribution Period, the period from, and including, the date of
original issuance of the Securities to, but excluding, the initial Distribution
Payment Date and (ii) thereafter, from, and including, the first day following
the end of the preceding Distribution Period to, but excluding, the applicable
Distribution Payment Date or, in the case of the last Distribution Period, the
related date of redemption.
(b) LIBOR shall be determined by the Calculation Agent for each
Distribution Period in accordance with the following provisions:
(1) On the second LIBOR Business Day (provided, that on such day
commercial banks are open for business (including dealings in foreign
currency deposits) in London (a "LIBOR Banking Day"), and otherwise the
next preceding LIBOR Business Day that is also a LIBOR Banking Day) prior
to January 15th, April 15th, July 15th or October 15th, as the case may
be, immediately succeeding the commencement of such Distribution Period
(or, in the case of the first Distribution Period, prior to December 16,
2003) (each such day, a "LIBOR Determination Date"), LIBOR shall equal the
rate, as obtained by the Calculation Agent, for three-month U.S. Dollar
deposits in Europe, which appears on Telerate (as defined in the
International Swaps and Derivatives Association, Inc. 2000 Interest Rate
and Currency Exchange Definitions) page 3750 or such other page as may
replace such page 3750, as of 11:00 a.m. (London time) on such LIBOR
Determination Date, as reported by Bloomberg Financial Markets Commodities
News or any successor service ("Telerate Page 3750"). "LIBOR Business
Day" means any day that is not a Saturday, Sunday or other day on which
commercial banking institutions in The City of New York or Wilmington,
Delaware are authorized or obligated by law or executive order to be
closed. If such rate is superseded on Telerate Page 3750 by a corrected
rate before 12:00 noon (London time) on such LIBOR Determination Date, the
corrected rate as so substituted will be LIBOR for such LIBOR
Determination Date.
(2) If, on such LIBOR Determination Date, such rate does not appear
on Telerate Page 3750, the Calculation Agent shall determine the
arithmetic mean of the offered quotations of the Reference Banks (as
defined below) to leading banks in the London interbank market for
three-month U.S. Dollar deposits in Europe (in an amount determined by the
Calculation Agent) by reference to requests for quotations as of
approximately 11:00 a.m. (London time) on such LIBOR Determination Date
made by the Calculation Agent to the Reference Banks. If, on such LIBOR
Determination Date, at least two of the Reference Banks provide such
quotations, LIBOR shall equal the arithmetic mean of such quotations. If,
on such LIBOR Determination Date, only one or none of the Reference Banks
provide such a quotation, LIBOR shall be deemed to be the arithmetic mean
of the offered quotations that at least two leading banks in The City of
New York (as selected by the Calculation Agent) are quoting on such
PAGE A-I-3
LIBOR Determination Date for three-month U.S. Dollar deposits in Europe at
approximately 11:00 a.m. (London time) (in an amount determined by the
Calculation Agent). As used herein, "Reference Banks" means four major
banks in the London interbank market selected by the Calculation Agent.
(3) If the Calculation Agent is required but is unable to determine
a rate in accordance with at least one of the procedures provided above,
LIBOR for such Distribution Period shall be LIBOR in effect for the
immediately preceding Distribution Period.
(c) All percentages resulting from any calculations on the Securities
will be rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point, with five one-millionths of a percentage point rounded upward
(e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)), and
all dollar amounts used in or resulting from such calculation will be rounded
to the nearest cent (with one-half cent being rounded upward).
(d) On each LIBOR Determination Date, the Calculation Agent shall notify,
in writing, the Sponsor and the Paying Agent of the applicable Coupon Rate that
applies to the related Distribution Period. The Calculation Agent shall, upon
the request of a Holder of any Securities, inform such Holder of the Coupon
Rate that applies to the related Distribution Period. All calculations made by
the Calculation Agent in the absence of manifest error shall be conclusive for
all purposes and binding on the Sponsor and the Holders of the Securities. The
Paying Agent shall be entitled to rely on information received from the
Calculation Agent or the Sponsor as to the applicable Coupon Rate. The Sponsor
shall, from time to time, provide any necessary information to the Paying Agent
relating to any original issue discount and interest on the Securities that is
included in any payment and reportable for taxable income calculation purposes.
(e) Distributions on the Securities will be cumulative, will accrue from
the date of original issuance, and will be payable, subject to extension of
Distribution Periods as described herein, quarterly in arrears on January 8th,
April 8th, July 8th and October 8th of each year, commencing on April 8, 2004
(each, a "Distribution Payment Date"). The Debenture Issuer has the right
under the Indenture to defer payments of interest on the Debentures by
extending the interest payment period for up to 20 consecutive quarterly
periods (each such extended interest payment period, together with all previous
and future consecutive extensions thereof, is referred to herein as an
"Extension Period") at any time and from time to time on the Debentures,
subject to the conditions described below and in the Indenture. No Extension
Period may end on a date other than a Distribution Payment Date or extend
beyond the Maturity Date, any Optional Redemption Date or the Special
Redemption Date, as the case may be (each such term as defined herein). During
any Extension Period, interest will continue to accrue on the Debentures, and
interest on such accrued interest (such accrued interest and interest thereon
referred to herein as "Deferred Interest") will accrue, at an annual rate equal
to the Coupon Rate applicable during such Extension Period, compounded
quarterly from the date such Deferred Interest would have been payable were it
not for the Extension Period, to the extent permitted by applicable law. At
the end of any Extension Period, the Debenture Issuer shall pay all Deferred
Interest then accrued and unpaid on the Debentures; PROVIDED, HOWEVER, that
during any Extension Period, the Debenture Issuer may not (i) declare or pay
any dividends or distributions
PAGE A-I-4
on, or redeem, purchase, acquire, or make a liquidation payment with respect
to, any of the Debenture Issuer's capital stock, (ii) make any payment of
principal or premium or interest on or repay, repurchase or redeem any debt
securities of the Debenture Issuer that rank in all respects PARI PASSU with
or junior in interest to the Debentures or (iii) make any payment under any
guarantees of the Debenture Issuer that rank in all respects PARI PASSU with or
junior in interest to the Guarantee (other than (a) repurchases, redemptions or
other acquisitions of shares of capital stock of the Debenture Issuer (A) in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of one or more employees, officers,
directors or consultants, (B) in connection with a dividend reinvestment or
stockholder stock purchase plan or (C) in connection with the issuance of
capital stock of the Debenture Issuer (or securities convertible into or
exercisable for such capital stock), as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as a
result of any exchange or conversion of any class or series of the Debenture
Issuer's capital stock (or any capital stock of a subsidiary of the Debenture
Issuer) for any class or series of the Debenture Issuer's capital stock or of
any class or series of the Debenture Issuer's indebtedness for any class or
series of the Debenture Issuer's capital stock, (c) the purchase of fractional
interests in shares of the Debenture Issuer's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, (d) any declaration of a dividend in connection with
any stockholder's rights plan, or the issuance of rights, stock or other
property under any stockholder's rights plan, or the redemption or repurchase
of rights pursuant thereto or (e) any dividend in the form of stock, warrants,
options or other rights where the dividend stock or the stock issuable upon
exercise of such warrants, options or other rights is the same stock as that on
which the dividend is being paid or ranks PARI PASSU with or junior in interest
to such stock. Prior to the termination of any Extension Period, the Debenture
Issuer may further extend such Extension Period, PROVIDED, that no Extension
Period (including all previous and further consecutive extensions that are part
of such Extension Period) shall exceed 20 consecutive quarterly periods. Upon
the termination of any Extension Period and upon the payment of all Deferred
Interest, the Debenture Issuer may commence a new Extension Period, subject to
the requirements herein and in the Indenture. No interest or Deferred Interest
(except any Additional Interest that may be due and payable) shall be due and
payable during an Extension Period, except at the end thereof, but Deferred
Interest shall accrue upon each installment of interest that would otherwise
have been due and payable during such Extension Period until such installment
is paid.
As a consequence of any Extension Period, Distributions will be deferred.
Notwithstanding any such deferral, Distributions will continue to accrue on the
Securities, and Distributions on such accrued Distributions will accrue, at the
Coupon Rate applicable during such Extension Period, compounded quarterly, to
the extent permitted by applicable law. If Distributions are deferred, the
Distributions due shall be paid on the date that such Extension Period
terminates to Holders of the Securities as they appear on the books and records
of the Trust on the regular record date immediately preceding the Distribution
Payment Date on which such Extension Period terminates to the extent that the
Trust has funds legally available for the payment of such Distributions in the
Property Account of the Trust.
The Trust's funds available for Distributions to the Holders of the
Securities will be limited to payments received from the Debenture Issuer. The
payment of Distributions out of moneys held by the Trust is guaranteed by the
Guarantor pursuant to the Guarantee.
PAGE A-I-5
(f) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Registrar on the
relevant regular record dates. The relevant "regular record dates" shall be
15 days before the relevant Distribution Payment Dates. 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, as the case may be, when due (taking into account any Extension
Period), will cease to be payable to the Person in whose name such Securities
are registered on the original relevant regular record date, and such
Distributions will instead be payable to the Person in whose name such
Securities are registered on the regular record date preceding the Distribution
Payment Date on which the related Extension Period terminates or, in the
absence of an Extension Period, a special record date therefor selected by the
Administrators.
(g) 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 (as defined herein) among the Holders of the Securities.
(h) If any Distribution Payment Date, other than any date of redemption,
falls on a day that is not a Business Day, then Distributions payable will be
paid on, and such Distribution Payment Date will be moved to, the next
succeeding Business Day, and additional Distributions will accrue for each day
that such payment is delayed as a result thereof.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION. In the event of the
voluntary or involuntary liquidation, dissolution, winding-up or termination
of the Trust (each, a "Liquidation"), the Holders of the Securities will be
entitled to receive out of the assets of the Trust legally available for
distribution to Holders of the Securities, after satisfaction of liabilities
to creditors of the Trust (to the extent not satisfied by the Debenture
Issuer), an amount in cash equal to the aggregate of the liquidation amount
of $1,000 per Security plus unpaid Distributions accrued thereon to the date
of payment (collectively, the "Liquidation Distribution"), unless: (i) the
Debentures have been redeemed in full in accordance with the terms thereof and
of the Indenture; or (ii) the Debentures in an aggregate principal amount equal
to the aggregate liquidation amount of such Securities and bearing accrued and
unpaid interest in an amount equal to the accrued and unpaid Distributions on
such Securities, after paying or making reasonable provision to pay all claims
and obligations of the Trust in accordance with Section 3808(e) of the
Statutory Trust Act, shall be distributed on a Pro Rata basis to the Holders of
the Securities in exchange for such Securities.
The Sponsor, as the Holder of all of the Common Securities, has the right
at any time, upon receipt by the Debenture Issuer and the Institutional Trustee
for the benefit of the Trust of an opinion of nationally recognized tax
counsel, which opinion may rely on private rulings of the Internal Revenue
Service or public rulings of the Internal Revenue Service, that Holders will
not recognize any gain or loss for United States Federal income tax purposes as
a result of the distribution of Debentures, to dissolve the Trust (including,
without limitation, upon the occurrence of a Tax Event or an Investment Company
Event, each as defined herein) and, after satisfaction of liabilities to
creditors of the Trust, cause the Debentures to be distributed to the Holders
of the Securities on a Pro Rata basis in accordance with the aggregate
liquidation amount thereof.
PAGE A-I-6
The Trust shall dissolve on the first to occur of (i) January 8, 2039, the
expiration of the term of the Trust, (ii) a Bankruptcy Event with respect to
the Sponsor, the Trust or the Debenture Issuer, (iii) (other than in connection
with a merger, consolidation or similar transaction permitted by the Indenture,
this Declaration or the Guarantee, as the case may be) the filing of a
certificate of dissolution or its equivalent with respect to the Sponsor or
upon the revocation of the charter of the Sponsor and the expiration of 90 days
after the date of revocation without a reinstatement thereof, (iv) the
distribution of all of the Debentures to the Holders of the Securities, upon
exercise of the right of the Holders of all of the outstanding Common
Securities to dissolve the Trust as described above, (v) the entry of a decree
of a judicial dissolution of any Holder of the Common Securities, the Sponsor,
the Trust or the Debenture Issuer, (vi) when all of the Securities are then
subject to redemption and the amounts necessary for redemption thereof shall
have been paid to the Holders in accordance with the terms of the Securities,
or (vii) before the issuance of any Securities, with the consent of all of the
Trustees and the Sponsor. As soon as practicable after the dissolution of the
Trust and upon completion of the winding up of the Trust, the Trust shall
terminate upon the filing of a certificate of cancellation with the Secretary
of State of the State of Delaware.
Notwithstanding the foregoing, if a Liquidation of the Trust occurs as
described in clause (i), (ii), (iii) or (v) in the immediately preceding
paragraph, the Trust shall be liquidated by the Institutional Trustee of the
Trust as expeditiously as such Trustee determines to be practical, by
distributing, after satisfaction of liabilities to creditors of the Trust (to
the extent not satisfied by the Debenture Issuer) as provided by applicable
law , to the Holders of the Securities, the Debentures on a Pro Rata basis,
unless such distribution is determined by the Institutional Trustee not to be
practical, in which event such Holders will be entitled to receive on a Pro
Rata basis, out of the assets of the Trust legally available for distribution
to the Holders of the Securities, after satisfaction of liabilities to
creditors of the Trust (to the extent not satisfied by the Debenture Issuer),
an amount in cash equal to the Liquidation Distribution. A Liquidation of the
Trust pursuant to clause (iv) of the immediately preceding paragraph shall
occur if the Institutional Trustee determines that such Liquidation is
practical, by distributing, after satisfaction of liabilities to creditors of
the Trust (to the extent not satisfied by the Debenture Issuer), to the Holders
of the Securities on a Pro Rata basis, the Debentures, and such distribution
occurs.
If, upon any Liquidation of the Trust, 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 to the Holders of the Securities
on a Pro Rata basis, except that if an Event of Default has occurred and is
continuing, then the Capital Securities shall have a preference over the Common
Securities with regard to such amounts.
Upon any Liquidation of the Trust involving a distribution of the
Debentures, if at the time of such Liquidation, the Capital Securities were
rated by at least one nationally-recognized statistical rating organization,
the Debenture Issuer will use its reasonable best efforts to obtain from at
least one such or other rating organization a rating for the Debentures.
After the date for any distribution of the Debentures upon any Liquidation
of the Trust, (i) the Securities of the Trust will be deemed to be no longer
outstanding, (ii) any
PAGE A-I-7
certificates representing the Capital Securities will be deemed to represent
undivided beneficial interests in such of the Debentures as have an aggregate
principal amount equal to the aggregate liquidation amount of such Capital
Securities and bearing accrued and unpaid interest equal to accrued and unpaid
Distributions on such Capital Securities until such certificates are presented
to the Debenture Issuer or its agent for transfer or reissuance (and until such
certificates are so surrendered, no payments shall be made to Holders of
Securities in respect of any payments due and payable under the Debentures) and
(iii) all rights of Holders of Securities shall cease, except the right of such
Holders to receive Debentures upon surrender of certificates representing such
Securities.
4. REDEMPTION AND DISTRIBUTION.
(a) The Debentures will mature on January 8, 2034 (the "Maturity Date")
at an amount in cash equal to 100% of the principal amount thereof plus unpaid
interest accrued thereon to such date (the "Maturity Redemption Price"). The
Debentures may be redeemed by the Debenture Issuer, at its option, in whole or
in part, on any Distribution Payment Date on or after January 8, 2009 (each, an
"Optional Redemption Date"), at the Optional Redemption Price, upon not less
than 30 nor more than 60 days' prior written notice to holders of such
Debentures. In addition, upon the occurrence and continuation of a Tax Event
or an Investment Company Event, the Debentures may be redeemed by the Debenture
Issuer, at its option, in whole but not in part, at any time within 90 days
following the occurrence of such Tax Event or Investment Company Event, as the
case may be (the "Special Redemption Date"), at the Special Redemption Price,
upon not less than 30 nor more than 60 days' prior written notice to holders of
the Debentures so long as such Tax Event or Investment Company Event, as the
case may be, is continuing. Additional interest may also be payable by the
Debenture Issuer in connection with such Tax Event or Investment Company Event
as specified in Section 10.02 of the Indenture. Any such interest received by
the Trust will be distributed promptly to Holders of the Securities on a Pro
Rata basis.
"Tax Event" means the receipt by the Debenture Issuer and the Trust of an
opinion of counsel experienced in such matters to the effect that, as a result
of any amendment to or change (including any announced prospective change) in
the laws or any regulations thereunder of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement (including any private letter ruling,
technical advice memorandum, regulatory procedure, notice or announcement) (an
"Administrative Action") or judicial decision interpreting or applying such
laws or regulations, regardless of whether such Administrative Action or
judicial decision is issued to or in connection with a proceeding involving
the Debenture Issuer or the Trust and whether or not subject to review or
appeal, which amendment, clarification, change, Administrative Action or
decision is enacted, promulgated or announced, in each case on or after the
date of original issuance of the Debentures, 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 United States federal income tax with respect
to income received or accrued on the Debentures; (ii) if the Debenture Issuer
is organized and existing under the laws of the United States or any state
thereof or the District of Columbia, 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
PAGE A-I-8
such opinion, subject to or otherwise required to pay or required to withhold
from Distributions, more than a de minimis amount of other taxes (including
withholding taxes), duties, assessments or other governmental charges.
"Investment Company Event" means the receipt by the Debenture Issuer and
the Trust of an opinion of counsel experienced in such matters to the effect
that, as a result of a change in law or regulation or written change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority, there is more than an
insubstantial risk that the Trust is or, within 90 days of the date of such
opinion will be, considered an Investment Company that is required to be
registered under the Investment Company Act, which change or prospective change
becomes effective or would become effective, as the case may be, on or after
the date of the original issuance of the Debentures.
"Optional Redemption Price" means an amount in cash equal to 100% of the
principal amount of the Debentures being redeemed plus unpaid interest accrued
on such Debentures to the related Optional Redemption Date.
"Special Event" means either a Tax Event or an Investment Company Event,
or both.
"Special Redemption Price" means, with respect to the redemption of this
Debenture following a Special Event, an amount in cash equal to 104.75% of the
principal amount of Debentures to be redeemed prior to January 8, 2005 and
thereafter equal to the percentage of the principal amount of the Debentures
that is specified below for the Special Redemption Date plus, in each case,
interest accrued thereon to the Special Redemption Date:
SPECIAL REDEMPTION DURING THE 12-MONTH
--------------------------------------
PERIOD BEGINNING JANUARY 8, PERCENTAGE OF PRINCIPAL AMOUNT
--------------------------- ------------------------------
2005 103.80%
2006 102.85%
2007 101.90%
2008 100.95%
2009 and thereafter 100.00%
(b) Upon any repayment of the Debentures at maturity or in whole or in
part upon redemption (other than following the distribution of the Debentures
to the Holders of the Securities), the proceeds from such repayment shall
concurrently be applied to redeem Pro Rata, at a redemption price corresponding
to the applicable Maturity Redemption Price, Optional Redemption Price or
Special Redemption Price for the Debentures, as the case may be, Securities
having an aggregate liquidation amount equal to the aggregate principal amount
of the Debentures so repaid; PROVIDED, HOWEVER, that Holders of such Securities
shall be given not less
PAGE A-I-9
than 30 nor more than 60 days' prior written notice of such redemption (other
than a redemption resulting from the maturity of the Debentures on the Maturity
Date).
(c) If fewer than all the outstanding Securities are to be so redeemed,
the Common Securities and the Capital Securities will be redeemed Pro Rata and
the Capital Securities to be redeemed will be as described in Section 4(e)(ii)
below.
(d) The Trust may not redeem fewer than all the outstanding Capital
Securities unless all accrued and unpaid Distributions have been paid on all
Capital Securities for all Distribution Periods terminating on or before the
related date of redemption.
(e) Redemption or Distribution Procedures.
(i) Written notice of any redemption of, or written notice of
distribution of the Debentures in exchange for, the Securities (a
"Redemption/Distribution Notice") 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 of redemption or exchange thereof
which, in the case of a redemption, will be the date of 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
4(e)(i), 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 such Securities. Each Redemption/Distribution Notice shall
be addressed to the Holders of such Securities at the address of each such
Holder appearing on the books and records of the Registrar. No defect in
the Redemption/Distribution Notice or in the mailing thereof with respect
to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Capital
Securities are to be redeemed, the Capital Securities to be redeemed shall
be redeemed Pro Rata from each Holder.
(iii) If the Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are redeemed or repaid as set out in this Section (which notice
will be irrevocable), then, PROVIDED, that the Institutional Trustee has a
sufficient amount of cash in connection with the related redemption or
maturity of the Debentures, the Institutional Trustee will pay the price
payable upon redemption of the Securities to the Holders of such
Securities by check mailed to the address of each such Holder appearing on
the books and records of the Trust on the related date of redemption. If a
Redemption/Distribution Notice shall have been given and funds deposited as
required, then immediately prior to the close of business on the date of
such deposit, Distributions will cease to accrue on the Securities so
subject to redemption and all rights of Holders of such Securities so
subject to redemption will cease, except the right of the Holders of such
Securities to receive the applicable price specified in Section 4(a), but
without interest on such price. If any date of redemption of the
Securities falls on a day that is not a Business Day, then payment of all
amounts payable on such date will be made on the next succeeding Business
Day, and
PAGE A-I-10
no additional Distributions will accrue in respect of such payment on such
next succeeding Business Day. If any amount payable upon redemption of the
Securities is improperly withheld or refused and not paid either by the
Trust, the Debenture Issuer or the Sponsor as guarantor pursuant to the
Guarantee, Distributions on such Securities will continue to accrue at the
Coupon Rate applicable from the date of redemption to the actual date of
payment, in which case the actual payment date will be considered the date
of redemption for purposes of calculating the price payable upon
redemption of the Securities.
The Trust shall not be required to (i) issue, register the transfer
of or exchange any Security during a period beginning at the opening of
business 15 days before any selection for redemption of the Securities and
ending at the close of business on the earliest date on which the relevant
notice of redemption is deemed to have been given to all Holders of the
Securities to be so redeemed or (ii) register the transfer of or exchange
any Securities so selected for redemption, in whole or in part, except for
the unredeemed portion of any Securities being redeemed in part.
(iv) Redemption/Distribution Notices shall be sent by the
Administrators on behalf of the Trust (A) in respect of the Capital
Securities, to the Holders thereof, and (B) in respect of the Common
Securities, to the Holder thereof.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), and provided,
that the acquiror is not the Holder of the Common Securities or the
obligor under the Indenture, the Sponsor or any of its subsidiaries may at
any time and from time to time purchase outstanding Capital Securities by
tender, in the open market or by private agreement.
5. VOTING RIGHTS - CAPITAL SECURITIES. (a) Except as provided under
Sections 5(b) and 7 and as otherwise required by law and the Declaration, the
Holders of the Capital Securities will have no voting rights. The
Administrators are required to call a meeting of the Holders of the Capital
Securities if directed to do so by Holders of not less than 10% in liquidation
amount of the Capital Securities.
(b) Subject to the requirements of obtaining a tax opinion by the
Institutional Trustee in certain circumstances set forth in the last sentence
of this paragraph, the Holders of a Majority in liquidation amount of the
Capital 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 Institutional Trustee, or exercising any trust or power conferred upon
the Institutional Trustee under the Declaration, including (i) directing the
time, method, place of conducting any proceeding for any remedy available to
the Debenture Trustee, or exercising any trust or power conferred on the
Debenture Trustee with respect to the Debentures, (ii) waiving any past default
and its consequences that are waivable under the Indenture, (iii) exercising
any right to rescind or annul an acceleration of the principal of all the
Debentures or (iv) consenting on behalf of all the Holders of the Capital
Securities to any amendment, modification or termination of the Indenture or
the Debentures where such consent shall be required; PROVIDED, HOWEVER, that,
where a consent or action under the Indenture would require the consent or act
of the holders of greater than a simple majority in principal amount of
Debentures (a "Super
PAGE A-I-11
Majority") affected thereby, the Institutional Trustee may only give such
consent or take such action at the written direction of the Holders of not less
than the proportion in liquidation amount of the Capital Securities outstanding
which the relevant Super Majority represents of the aggregate principal amount
of the Debentures outstanding. If the Institutional Trustee fails to enforce
its rights under the Debentures after the Holders of a Majority or Super
Majority, as the case may be, in liquidation amount of such Capital Securities
have so directed the Institutional Trustee, to the fullest extent permitted by
law, a Holder of the Capital Securities may institute a legal proceeding
directly against the Debenture Issuer to enforce the Institutional Trustee's
rights under the Debentures without first instituting any legal proceeding
against the Institutional Trustee or any other person or entity.
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Debenture
Issuer to pay interest or premium, if any, on or principal of the Debentures on
the date such interest, premium, if any, or principal is payable (or in the
case of redemption, the date of redemption), then a Holder of the Capital
Securities may directly institute a proceeding for enforcement of payment, on
or after the respective due dates specified in the Debentures, to such Holder
directly of the principal of or premium, if any, or interest on the Debentures
having an aggregate principal amount equal to the aggregate liquidation amount
of the Capital Securities of such Holder. Except with respect to directing
the time, method and place of conducting a proceeding for a remedy, the
Institutional Trustee shall not take any of the actions described in clause
(i), (ii), (iii) or (iv) above unless the Institutional Trustee has obtained
an opinion of tax counsel to the effect that, as a result of such action, the
Trust will not be classified as other than a grantor trust for United States
federal income tax purposes.
The Institutional Trustee shall notify all Holders of the Capital
Securities of any Default actually known to the Institutional Trustee with
respect to the Debentures unless (x) such Default has been cured prior to the
giving of such notice or (y) the Institutional Trustee determines in good faith
that the withholding of such notice is in the interest of the Holders of such
Capital Securities, except, in the case of clause (y), where the Default
relates to the payment of principal of or premium, if any, or interest on any
of the Debentures. Such notice shall state that such Indenture Event of
Default also constitutes an Event of Default hereunder.
A waiver of an Indenture Event of Default will constitute a waiver of the
corresponding Event of Default hereunder. Any required approval or direction
of Holders of the Capital Securities may be given at a separate meeting of
Holders of the Capital Securities convened for such purpose, at a meeting of
all of the Holders of the Securities in the Trust or pursuant to written
consent. The Institutional Trustee will cause a notice of any meeting at which
Holders of the Capital 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 the Capital 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. No vote or consent
of the Holders of the Capital Securities will be required for the Trust to
redeem and cancel Capital Securities or to distribute the Debentures in
accordance with the Declaration and the terms of the Securities.
PAGE A-I-12
Notwithstanding that Holders of the Capital Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Capital Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not entitle the Holder thereof to vote or consent and shall, for
purposes of such vote or consent, be treated as if such Capital Securities were
not outstanding.
In no event will Holders of the Capital Securities have the right to vote
to appoint, remove or replace the Administrators, which voting rights are
vested exclusively in the Sponsor as the Holder of all of the Common Securities
of the Trust. Under certain circumstances as more fully described in the
Declaration, Holders of Capital Securities have the right to vote to appoint,
remove or replace the Institutional Trustee and the Delaware Trustee.
6. VOTING RIGHTS - COMMON SECURITIES. (a) Except as provided under
Sections 6(b), 6(c) and 7 and as otherwise required by law and the Declaration,
the Holder of the Common Securities will have no voting rights.
(b) The Holder of the Common Securities is entitled, in accordance with
Article IV of the Declaration, to vote to appoint, remove or replace any
Administrators.
(c) Subject to Section 6.7 of the Declaration and only after each Event
of Default (if any) with respect to the Capital Securities has been cured,
waived or otherwise eliminated and subject to the requirements of the second
to last sentence of this paragraph, the Holder of the Common Securities, voting
separately as a class, may direct the time, method, and place of conducting any
proceeding for any remedy available to the Institutional Trustee, or exercising
any trust or power conferred upon the Institutional Trustee under the
Declaration, including (i) directing the time, method, place of conducting any
proceeding for any remedy available to the Debenture Trustee, or exercising any
trust or power conferred on the Debenture Trustee with respect to the
Debentures, (ii) waiving any past default and its consequences that are
waivable under the Indenture, or (iii) exercising any right to rescind or annul
an acceleration of the principal of all the Debentures. Notwithstanding this
Section 6(c), the Institutional Trustee shall not revoke any action previously
authorized or approved by a vote or consent of the Holders of the Capital
Securities. Other than with respect to directing the time, method and place of
conducting any proceeding for any remedy available to the Institutional Trustee
or the Debenture Trustee as set forth above, the Institutional Trustee shall
not take any action described in clause (i), (ii) or (iii) above, unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action. If the
Institutional Trustee fails to enforce its rights under the Declaration, to the
fullest extent permitted by law, the Holder of the Common Securities may
institute a legal proceeding directly against any Person to enforce the
Institutional Trustee's rights under the Declaration, without first instituting
a legal proceeding against the Institutional Trustee or any other Person.
Any approval or direction of the Holder of the Common Securities may be
given at a separate meeting of Holders of the Common Securities convened for
such purpose, at a meeting of all of the Holders of the Securities in the Trust
or pursuant to written consent. The Administrators will cause a notice of any
meeting at which the Holder of the Common Securities is entitled to vote, or of
any matter upon which action by written consent of such Holder is to be
PAGE A-I-13
taken, to be mailed to the Holder of the Common Securities. Each such notice
will include a statement setting forth (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 Holder is entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holder of the Common Securities will be required
for the Trust to redeem and cancel Common Securities or to distribute the
Debentures in accordance with the Declaration and the terms of the Securities.
7. AMENDMENTS TO DECLARATION AND INDENTURE. In addition to any
requirements under Section 11.1 of the Declaration, if any proposed amendment
to the Declaration provides for, or the Trustees otherwise propose to effect,
(i) any action that would adversely affect the powers, preferences or special
rights of the Securities, whether by way of amendment to the Declaration or
otherwise, or (ii) the Liquidation of the Trust, other than as described in
Section 7.1 of the Declaration, then the Holders of outstanding Securities,
voting together as a single class, will be entitled to vote on such amendment
or proposal and such amendment or proposal shall not be effective except with
the approval of the Holders of a Majority in liquidation amount of the
Securities affected thereby; PROVIDED, HOWEVER, if any amendment or proposal
referred to in clause (i) above would adversely affect only the Capital
Securities or only the Common Securities, then only Holders of the affected
Securities will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of the
Holders of a Majority in liquidation amount of such Securities.
(a) In the event the consent of the Institutional Trustee, as the holder
of the Debentures, is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the Debentures,
the Institutional Trustee shall request the written direction of the Holders
of the Securities with respect to such amendment, modification or termination
and shall vote with respect to such amendment, modification, or termination as
directed by a Majority in liquidation amount of the Securities voting together
as a single class; PROVIDED, HOWEVER, that where a consent under the Indenture
would require a Super Majority, the Institutional Trustee may only give such
consent at the written direction of the Holders of not less than the proportion
in liquidation amount of the Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding.
(b) Notwithstanding the foregoing, no amendment or modification may be
made to the Declaration if such amendment or modification would (i) cause the
Trust to be classified for purposes of United States federal income taxation
as other than a grantor trust, (ii) reduce or otherwise adversely affect the
powers of the Institutional Trustee or (iii) cause the Trust to be deemed an
Investment Company which is required to be registered under the Investment
Company Act.
(c) Notwithstanding any provision of the Declaration, the right of any
Holder of the Capital Securities to receive payment of Distributions and
payments upon redemption, Liquidation or otherwise, on or after their
respective due dates, or to institute a suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or
PAGE A-I-14
affected without the consent of such Holder. For the protection and
enforcement of the foregoing provision, each and every Holder of the Capital
Securities shall be entitled to such relief as can be given either at law or
equity.
8. PRO RATA. A reference in these terms of the Securities to any
payment, distribution or treatment as being "Pro Rata" shall mean pro rata to
each Holder of the 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 unless, in relation to a
payment, an Event of Default has occurred and is continuing, in which case any
funds available to make such payment shall be paid first to each Holder of the
Capital Securities Pro Rata according to the aggregate liquidation amount of
the Capital Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Capital Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Capital Securities, to
each Holder of the Common Securities Pro Rata according to the aggregate
liquidation amount of the Common Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Common Securities
outstanding.
9. RANKING. The Capital Securities rank pari passu with, and payment
thereon shall be made Pro Rata with, the Common Securities except that, where
an Event of Default has occurred and is continuing, the rights of Holders of
the Common Securities to receive payment of Distributions and payments upon
Liquidation, redemption and otherwise are subordinated to the rights of the
Holders of the Capital Securities with the result that no payment of any
Distribution on, or any amount payable upon the redemption of, any Common
Security, and no payment to the Holder of any Common Security on account of the
Liquidation of the Trust, shall be made unless payment in full in cash of (i)
all accrued and unpaid Distributions on all outstanding Capital Securities for
all Distribution Periods terminating on or prior thereto, (ii) all amounts
payable upon Capital Securities then subject to redemption and (iii) all
amounts payable upon Capital Securities in the event of the Liquidation of the
Trust, in each case, shall have been made or provided for, and all funds
immediately available to the Institutional Trustee shall first be applied to
the payment in full in cash of the amounts specified in clause (i), (ii) and
(iii) above that are then due and payable.
10. ACCEPTANCE OF GUARANTEE AND INDENTURE. Each Holder of the Capital
Securities and the Common Securities, by the acceptance of such Securities,
agrees to the provisions of the Guarantee and the Indenture, including the
subordination provisions therein.
11. NO PREEMPTIVE RIGHTS. The Holders of the Securities shall have no,
and the issuance of the Securities is not subject to, preemptive or similar
rights to subscribe for any additional securities.
12. MISCELLANEOUS. These terms constitute a part of the Declaration. The
Sponsor will provide a copy of the Declaration, the Guarantee and the Indenture
to a Holder without charge on written request to the Sponsor at its principal
place of business.
PAGE A-1-1
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY OR ANY
INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE
CASE MAY BE, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY
INTEREST OR PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (i)
TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) UNDER THE
SECURITIES ACT) AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND
(Z) THE LAST DATE ON WHICH THE TRUST OR ANY AFFILIATE (AS DEFINED IN RULE 405
UNDER THE SECURITIES ACT) OF THE TRUST WAS THE HOLDER OF THIS SECURITY OR SUCH
INTEREST OR PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (ii) SUCH LATER
DATE, IF ANY, AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW,
ONLY (A) TO THE DEBENTURE ISSUER OR THE TRUST, (B) PURSUANT TO RULE 144A UNDER
THE SECURITIES ACT ("RULE 144A"), TO A PERSON THE HOLDER REASONABLY BELIEVES IS
A "QUALIFIED INSTITUTIONAL BUYER," AS DEFINED IN RULE 144A, THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C)
PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (1),
(2), (3), (7) OR (8) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING
THIS SECURITY OR SUCH INTEREST OR PARTICIPATION FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH AN ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION
OF THE SECURITIES ACT, (D) PURSUANT TO OFFERS AND SALES TO NON-US PERSONS THAT
OCCUR OUTSIDE THE UNITED STATES PURSUANT TO REGULATION S UNDER THE SECURITIES
ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE DEBENTURE
ISSUER AND THE TRUST PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSE (C) OR (E) ABOVE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN
ACCORDANCE WITH THE AMENDED AND RESTATED DECLARATION OF TRUST, A COPY OF WHICH
MAY BE OBTAINED FROM THE
PAGE A-1-2
DEBENTURE ISSUER OR THE TRUST. THE HOLDER OF THIS SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE,
AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.
THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY
ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, ALSO AGREES, REPRESENTS
AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT
OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH A "PLAN"), OR AN
ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S
INVESTMENT IN THE ENTITY AND NO PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY
ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, UNLESS
SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER
U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60,
91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND
HOLDING OF THIS SECURITY OR SUCH INTEREST OR PARTICIPATION IS NOT PROHIBITED BY
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE
OR HOLDING. ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND
HOLDING HEREOF OR THEREOF, AS THE CASE MAY BE, THAT EITHER (i) IT IS NOT AN
EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO
WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING
ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY
USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE,
OR (ii) SUCH PURCHASE AND HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO
APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL DELIVER
TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
MAY BE REQUIRED BY THE AMENDED AND RESTATED DECLARATION OF TRUST TO CONFIRM
THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING
A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 AND MULTIPLES OF $1,000 IN
EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF THIS SECURITY IN A BLOCK HAVING A
LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO
LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO
BE THE HOLDER OF
PAGE A-1-3
THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN FOR ANY PURPOSE,
INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS SECURITY
OR SUCH INTEREST OR PARTICIPATION, AND SUCH PURPORTED TRANSFEREE SHALL BE
DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN.
PAGE A-1-4
Certificate Number [_____] Number of Capital Securities [_____]
Certificate Evidencing Capital Securities
of
Chandler Capital Trust II
Capital Securities
(liquidation amount $1,000 per Capital Security)
Chandler Capital Trust II, a statutory trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that [_____________] is the
registered owner (the "Holder") of [______________] capital securities of the
Trust representing undivided beneficial interests in the assets of the Trust,
designated as InCapS (SM) (liquidation amount $1,000 per Capital Security) (the
"Capital Securities"). Subject to the Declaration (as defined below), the
Capital Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this Certificate
duly endorsed and in proper form for transfer. The Capital Securities
represented hereby are issued pursuant to, and the designation, rights,
privileges, restrictions, preferences and other terms and provisions of the
Capital Securities shall in all respects be subject to, the provisions of the
Amended and Restated Declaration of Trust of the Trust, dated as of December
16, 2003, among W. Brent LaGere, Mark T. Paden and Mark C. Hart, as
Administrators, Wilmington Trust Company, as Delaware Trustee, Wilmington Trust
Company, as Institutional Trustee, Chandler (U.S.A.), Inc., as Sponsor, and the
holders from time to time of undivided beneficial interests in the assets of
the Trust, including the designation of the terms of the Capital Securities as
set forth in Annex I to the Declaration, as the same may be amended from time
to time (the "Declaration"). Capitalized terms used herein but not defined
shall have the meaning given them in the Declaration. The Holder is entitled
to the benefits of the Guarantee and the Indenture to the extent provided
therein. 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.
By acceptance of this Certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance of this Certificate, the Holder agrees to treat, for United
States federal income tax purposes, the Debentures as indebtedness and the
Capital Securities as evidence of undivided beneficial ownership in the
Debentures.
This Certificate and the Capital Securities evidenced hereby are governed
by, and shall be construed in accordance with, the laws of the State of
Delaware, without regard to principles of conflict of laws.
PAGE A-1-5
IN WITNESS WHEREOF, the Trust has duly executed this Certificate.
CHANDLER CAPITAL TRUST II
By:
-----------------------------------
Name:
Title: Administrator
Dated:
--------------------------------
CERTIFICATE OF AUTHENTICATION
This Certificate represents Capital Securities referred to in the
within-mentioned Declaration.
WILMINGTON TRUST
COMPANY,
not in its individual capacity but
solely as the Institutional Trustee
By:
-----------------------------------
Authorized Officer
Dated:
--------------------------------
PAGE A-1-6
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be payable at a
floating rate of interest per annum, which, with respect to any Distribution
Period, will be equal to LIBOR, as determined on the LIBOR Determination Date
for such Distribution Period, plus 4.10% (the "Coupon Rate"); PROVIDED, that
the Coupon Rate for any Distribution Period prior to the Distribution Period
commencing on the Distribution Payment Date (as defined below) in January 2009
may not exceed 12.5% per annum; PROVIDED, FURTHER, that the Coupon Rate for
any Distribution Period may not exceed the Interest Rate (as defined in the
Indenture) for the related Interest Period (as defined in the Indenture).
Distributions in arrears for more than one Distribution Period will bear
interest thereon, compounded quarterly, at the applicable Coupon Rate for
each Distribution Period thereafter (to the extent permitted by applicable
law). The term "Distributions", as used herein, includes cash Distributions,
any such compounded Distributions and any Additional Interest payable on the
Debentures, unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
legally available in the Property Account therefor. The amount of
Distributions payable for any Distribution Period will be computed on the basis
of a 360-day year and the actual number of days elapsed in such Distribution
Period.
Except as otherwise described below, Distributions on the Capital
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears on January 8th, April 8th, July 8th
and October 8th of each year, commencing on April 8, 2004 (each, a
"Distribution Payment Date"), subject to the Business Day convention specified
in the Declaration. The Debenture Issuer has the right under the Indenture to
defer payments of interest on the Debentures by extending the interest payment
period for up to 20 consecutive quarterly periods (each such extended interest
payment period, together with all previous and future consecutive extensions
thereof, is referred to herein as an "Extension Period") at any time and from
time to time on the Debentures, subject to the conditions described below and
in the Declaration and the Indenture. No Extension Period may end on a date
other than a Distribution Payment Date or extend beyond the Maturity Date, any
Optional Redemption Date or the Special Redemption Date, as the case may be.
During any Extension Period, interest will continue to accrue on the
Debentures, and interest on such accrued interest (such accrued interest and
interest thereon referred to herein as "Deferred Interest") will accrue, at an
annual rate equal to the Coupon Rate applicable during such Extension Period,
compounded quarterly from the date such Deferred Interest would have been
payable were it not for the Extension Period, to the extent permitted by
applicable law. At the end of any Extension Period, the Debenture Issuer shall
pay all Deferred Interest then accrued and unpaid on the Debentures; PROVIDED,
HOWEVER, that prior to the termination of any Extension Period, the Debenture
Issuer may further extend such Extension Period, PROVIDED, that no Extension
Period (including all previous and further consecutive extensions that are part
of such Extension Period) shall exceed 20 consecutive quarterly periods. Upon
the termination of any Extension Period and upon the payment of all Deferred
Interest, the Debenture Issuer may commence a new Extension Period, subject to
the requirements set forth herein and in the Declaration and the Indenture. No
interest or Deferred Interest (except any Additional Interest that may be due
and payable) shall be due and payable during an Extension Period, except at the
end thereof, but Deferred Interest shall accrue upon
PAGE A-1-7
each installment of interest that would otherwise have been due and payable
during such Extension Period until such installment is paid.
As a consequence of any Extension Period, Distributions will be deferred.
If Distributions are deferred, the Distributions due shall be paid on the date
that the related Extension Period terminates to Holders of the Capital
Securities as they appear on the books and records of the Trust on the regular
record date immediately preceding the Distribution Payment Date on which such
Extension Period terminates to the extent that the Trust has funds legally
available for the payment of such Distributions in the Property Account of the
Trust.
The Capital Securities shall be redeemable, and shall be entitled to the
Liquidation Distribution, as provided in the Declaration.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers the Capital
Securities evidenced by this Capital Security Certificate to:
- ---------------------------------
- ---------------------------------
- ---------------------------------
(Insert assignee's social security or tax identification number)
- ---------------------------------
- ---------------------------------
- ---------------------------------
(Insert address and zip code of assignee),
and irrevocably appoints _______________________________________________as
agent to transfer the Capital Securities evidenced by this Capital Security
Certificate on the books of the Trust. The agent may substitute another to
act for it, him or her.
Date:__________________
Signature:__________________
(Sign exactly as your name appears on the other side of this Capital
Security Certificate)
Signature Guarantee: 1 ____________________________
<FN>
- ------------------------------------
1 Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union, meeting the
requirements of the Security registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Security registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
PAGE A-2-1
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE
SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION.
EXCEPT AS SET FORTH IN SECTION 8.1(b) OF THE DECLARATION (AS DEFINED
BELOW), THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED.
PAGE A-2-2
Certificate Number [_____] Number of Common Securities [____]
Certificate Evidencing Common Securities
of
Chandler Capital Trust II
Chandler Capital Trust II, a statutory trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that Chandler (U.S.A.), Inc.
is the registered owner (the "Holder") of [______________] common securities of
the Trust representing undivided beneficial interests in the assets of the
Trust (liquidation amount $1,000 per Common Security)(the "Common Securities").
The Common Securities represented hereby are issued pursuant to, and the
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities shall in all respects be subject to, the
provisions of the Amended and Restated Declaration of Trust of the Trust, dated
as of December 16, 2003, among W. Brent LaGere, Mark T. Paden and Mark C. Hart,
as Administrators, Wilmington Trust Company, as Delaware Trustee, Wilmington
Trust Company, as Institutional Trustee, the Holder, as Sponsor, and the
holders from time to time of undivided beneficial interests in the assets of
the Trust, including the designation of the terms of the Common Securities as
set forth in Annex I to the Declaration, as the same may be amended from time
to time (the "Declaration"). Capitalized terms used herein but not defined
shall have the meaning given them in the Declaration. The Sponsor will provide
a copy of the Declaration and the Indenture to the Holder without charge upon
written request to the Sponsor at its principal place of business.
As set forth in the Declaration, when an Event of Default has occurred and
is continuing, the rights of the Holder of Common Securities to payment in
respect of Distributions and payments upon Liquidation, redemption or otherwise
are subordinated to the rights of payment of holders of the Capital Securities.
By acceptance of this Certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance of this Certificate, the Holder agrees to treat, for United
States federal income tax purposes, the Debentures as indebtedness and the
Common Securities as evidence of undivided beneficial ownership in the
Debentures.
This Certificate and the Common Securities evidenced hereby are governed
by, and shall be construed in accordance with, the laws of the State of
Delaware, without regard to principles of conflict of laws.
PAGE A-2-3
IN WITNESS WHEREOF, the Trust has executed this Certificate this ___ day
of ____, 2003.
CHANDLER CAPITAL TRUST II
By:
---------------------------------
Name:
Title: Administrator
PAGE A-2-4
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be identical in amount
to the Distributions payable on each Capital Security, which is at a floating
rate of interest per annum, which, with respect to any Distribution Period,
will be equal to LIBOR, as determined on the LIBOR Determination Date for such
Distribution Period, plus 4.10% (the "Coupon Rate"); PROVIDED, that the Coupon
Rate for any Distribution Period prior to the Distribution Period commencing on
the Distribution Payment Date (as defined below) in January 2009 may not exceed
12.5% per annum; PROVIDED, FURTHER, that the Coupon Rate for any Distribution
Period may not exceed the Interest Rate (as defined in the Indenture) for the
related Interest Period (as defined in the Indenture). Distributions in
arrears for more than one Distribution Period will bear interest thereon,
compounded quarterly, at the applicable Coupon Rate for each Distribution
Period thereafter (to the extent permitted by applicable law). The term
"Distributions", as used herein, includes cash Distributions, any such
compounded Distributions and any Additional Interest payable on the Debentures,
unless otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the Institutional
Trustee and to the extent the Institutional Trustee has funds legally available
in the Property Account therefor. The amount of Distributions payable for any
Distribution Period will be computed on the basis of a 360-day year and the
actual number of days elapsed in such Distribution Period.
Except as otherwise described below, Distributions on the Common
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears on January 8th, April 8th, July 8th
and October 8th of each year, commencing on April 8, 2004 (each, a
"Distribution Payment Date"), subject to the Business Day convention specified
in the Declaration. The Debenture Issuer has the right under the Indenture to
defer payments of interest on the Debentures by extending the interest payment
period for up to 20 consecutive quarterly periods (each such extended interest
payment period, together with all previous and future consecutive extensions
thereof, is referred to herein as an "Extension Period") at any time and from
time to time on the Debentures, subject to the conditions described below and
in the Declaration and the Indenture. No Extension Period may end on a date
other than a Distribution Payment Date or extend beyond the Maturity Date, any
Optional Redemption Date or the Special Redemption Date, as the case may be.
During any Extension Period, interest will continue to accrue on the
Debentures, and interest on such accrued interest (such accrued interest and
interest thereon referred to herein as "Deferred Interest") will accrue, at an
annual rate equal to the Coupon Rate applicable during such Extension Period,
compounded quarterly from the date such Deferred Interest would have been
payable were it not for the Extension Period, to the extent permitted by
applicable law. At the end of any Extension Period, the Debenture Issuer shall
pay all Deferred Interest then accrued and unpaid on the Debentures; PROVIDED,
HOWEVER, that prior to the termination of any Extension Period, the Debenture
Issuer may further extend such Extension Period, PROVIDED, that no Extension
Period (including all previous and further consecutive extensions that are part
of such Extension Period) shall exceed 20 consecutive quarterly periods. Upon
the termination of any Extension Period and upon the payment of all Deferred
Interest, the Debenture Issuer may commence a new Extension Period, subject to
the requirements set forth herein and in the Declaration and the Indenture. No
interest or Deferred Interest (except any Additional Interest that may be due
and payable) shall be due and payable during an Extension Period, except at the
end thereof, but Deferred Interest shall accrue upon
PAGE A-2-5
each installment of interest that would otherwise have been due and payable
during such Extension Period until such installment is paid.
As a consequence of any Extension Period, Distributions will be deferred.
If Distributions are deferred, the Distributions due shall be paid on the date
that the related Extension Period terminates to Holders of the Securities as
they appear on the books and records of the Trust on the regular record date
immediately preceding the Distribution Payment Date on which such Extension
Period terminates to the extent that the Trust has funds legally available for
the payment of such Distributions in the Property Account of the Trust.
The Common Securities shall be redeemable, and shall be entitled to the
Liquidation Distribution, as provided in the Declaration.
PAGE A-2-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers the Common
Securities evidenced by this Common Security Certificate to:
____________________________
____________________________
____________________________
(Insert assignee's social security or tax identification number)
____________________________
____________________________
____________________________
(Insert address and zip code of assignee),
and irrevocably appoints ___________________ as agent to transfer the Common
Securities evidenced by this Common Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date:____________________
Signature:________________________
(Sign exactly as your name appears on the other side of this Common
Security Certificate)
Signature Guarantee: 1 ________________________
<FN>
________________________
1 Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union, meeting the
requirements of the Security registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Security registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
PAGE B-1
EXHIBIT B
FORM OF TRANSFEREE CERTIFICATE
TO BE EXECUTED BY ACCREDITED INVESTORS
__________, [ ]
Chandler (U.S.A.), Inc.
Chandler Capital Trust II
1010 Manvel Avenue
Chandler, Oklahoma 74834
Re: Purchase of [SPECIFY] liquidation amount of InCapS (SM)
(THE "CAPITAL SECURITIES") OF CHANDLER CAPITAL TRUST II (THE "TRUST")
Ladies and Gentlemen:
In connection with our purchase of the Capital Securities, we confirm that:
1. We understand that the Capital Securities of the Trust have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
and may not be offered or sold except as permitted in the following sentence.
We agree on our own behalf and on behalf of any investor account for which we
are purchasing the Capital Securities that, if we decide to offer, sell or
otherwise transfer any such Capital Securities prior to the date which is the
later of (i) two years (or such shorter period of time as permitted by Rule
144(k) under the Securities Act) after the later of (Y) the date of original
issuance of the Capital Securities and (Z) the last date on which the Trust or
any Affiliate (as defined in Rule 405 under the Securities Act) of the Trust
was the holder of any such Capital Securities (or any predecessor thereto) and
(ii) such later date, if any, as may be required by any subsequent change in
applicable law (the "Resale Restriction Termination Date"), then such offer,
sale or other transfer will be made only (a) to the Company or the Trust, (b)
pursuant to Rule 144A under the Securities Act, to a person we reasonably
believe is a qualified institutional buyer under Rule 144A (a "QIB"), that
purchases for its own account or for the account of a QIB and to whom notice
is given that the transfer is being made in reliance on Rule 144A, (c) pursuant
to an exemption from registration, to an "accredited investor" within the
meaning of subparagraph (a) (1), (2), (3), (7) or (8) of Rule 501 under the
Securities Act that is acquiring any such Capital Securities for its own
account or for the account of such an accredited investor for investment
purposes and not with a view to, or for offer or sale in connection with, any
distribution thereof in violation of the Securities Act, (d) pursuant to offers
and sales to a non-U.S. Person that occur outside the United States pursuant to
Regulation S under the Securities Act, or (e) pursuant to another available
exemption from the registration requirements of the Securities Act, and in each
of the foregoing cases in accordance with any applicable state securities laws
and any requirements of law that govern the disposition of our property. If
any resale or other transfer of the Capital Securities is proposed to be made
pursuant to clause (c) above, the transferor shall deliver a letter from the
transferee substantially in the form of this letter to the Institutional
Trustee as Transfer Agent, which shall provide as applicable, among other
things, that the transferee is an accredited investor within the meaning of
subparagraph (a)(1), (2), (3), (7) or (8) of Rule 501 under the
PAGE B-2
Securities Act that is acquiring such Capital Securities for investment
purposes and not for any distribution in violation of the Securities Act.
In addition, if any resale or other transfer of the Capital Securities is
proposed to be made pursuant to clause (d) above, the transferor shall deliver
a letter from the transferee substantially in the form of Exhibit D to this
Declaration, which shall provide that the transferee is not a "U.S. person"
(as such term is defined in Rule 902 of the Securities Act), is not acquiring
the Capital Securities for the account or benefit of any U.S person and the
offer and sale of the Capital Securities to the transferee constitutes an
"offshore transaction" under Regulation S under the Securities Act. We
acknowledge on our behalf and on behalf of any investor account for which we
are purchasing Capital Securities that the Company and the Trust reserve the
right prior to any offer, sale or other transfer pursuant to clause (c) or
(e) to require the delivery of any opinion of counsel, certifications
and/or other information satisfactory to Chandler (U.S.A.), Inc. (the
"Company") and the Trust. We understand that the certificates for any
Capital Securities that we receive prior to the Resale Restriction Termination
Date will bear a legend substantially to the effect of the foregoing.
2. We are an accredited investor within the meaning of subparagraph (a)
(1), (2), (3), (7) or (8) of Rule 501 under the Securities Act purchasing for
our own account or for the account of such an accredited investor, and we are
acquiring the Capital Securities for investment purposes and not with view to,
or for offer or sale in connection with, any distribution in violation of the
Securities Act, and we have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of our
investment in the Capital Securities, and we and any account for which we are
acting are each able to bear the economic risks of our or its investment.
3. We are acquiring the Capital Securities purchased by us for our own
account (or for one or more accounts as to each of which we exercise sole
investment discretion and have authority to make, and do make, the statements
contained in this letter) and not with a view to any distribution of the
Capital Securities in violation of the Securities Act, subject, nevertheless,
to the understanding that the disposition of our property will at all times be
and remain within our control.
4. In the event that we purchase any Capital Securities, we will acquire
such Capital Securities having an aggregate liquidation amount of not less than
$100,000 for our own account and for each separate account for which we are
acting.
5. We acknowledge that we either (A) are not a fiduciary of a pension,
profit-sharing or other employee benefit plan or arrangement subject to the
Employee Retirement Income Security Act of 1974, as amended or to Section 4975
of the Internal Revenue Code of 1986, as amended (a "Plan"), or an entity whose
assets include "plan assets" by reason of any Plan's investment in the entity
and are not purchasing the Capital Securities on behalf of or with "plan
assets" by reason of any Plan's investment in the entity and are not purchasing
the Capital Securities on behalf of or with "plan assets" of any Plan or (B)
are eligible for the exemptive relief available under one or more of the
following prohibited transaction class exemptions ("PTCEs") issued by the U.S.
Department of Labor: PTCE 96-23, 95-60, 91-38, 90-1 or 84-14.
PAGE B-3
6. We acknowledge that each Plan, by its purchase of the Capital
Securities, will be deemed to have directed the Trust to invest in the junior
subordinated debt securities of the Company, and to have consented to the
appointment of the institutional trustee of the Trust.
7. We acknowledge that the Company, the Trust and others will rely upon
the truth and accuracy of the foregoing acknowledgments, representations,
warranties and agreements and agree that if any of our acknowledgments,
representations, warranties and agreements are no longer accurate, we shall
promptly notify the applicable Placement Agent. If we are acquiring any
Capital Securities as a fiduciary or agent for one or more investor accounts,
we represent that we have sole discretion with respect to each such investor
account and that we have full power to make the foregoing acknowledgments,
representations and agreements on behalf of each such investor account.
You are entitled to rely upon this letter and are irrevocably authorized
to produce this letter or a copy thereof to any interested party in any
administrative or legal proceeding or other inquiry with respect to matters
covered hereby.
______________________________
(Name of Purchaser)
By:__________________________
Date:_________________________
Upon transfer, the Capital Securities should be registered in the name of
the new beneficial owner as follows.
Name:_______________________
Address:______________________
Taxpayer ID Number:_____________________
PAGE C-1
EXHIBIT C
FORM OF TRANSFEROR CERTIFICATE
TO BE EXECUTED FOR QIBs
__________, [ ]
Chandler (U.S.A.), Inc.
Chandler Capital Trust II
1010 Manvel Avenue
Chandler, Oklahoma 74834
Re: Purchase of [SPECIFY] liquidation amount of InCapS (SM)
(THE "CAPITAL SECURITIES") OF CHANDLER CAPITAL TRUST II (THE "TRUST")
Reference is hereby made to the Amended and Restated Declaration of Trust
of Chandler Capital Trust II, dated as of December 16, 2003 (the
"Declaration"), among W. Brent LaGere, Mark T. Paden and Mark C. Hart, as
Administrators, Wilmington Trust Company, as Delaware Trustee, Wilmington Trust
Company, as Institutional Trustee, Chandler (U.S.A.), Inc., as Sponsor, and the
holders from time to time of undivided beneficial interests in the assets of
the Trust. Capitalized terms used but not defined herein shall have the
meanings given them in the Declaration.
This letter relates to $[_______________] aggregate liquidation amount of
Capital Securities which are held in the name of [name of transferor] (the
"Transferor").
In accordance with Section 8.2(b) of the Declaration, the Transferor does
hereby certify that such Capital Securities are being transferred in accordance
with (i) the transfer restrictions set forth in the Capital Securities and (ii)
Rule 144A under the Securities Act ("Rule 144A"), to a transferee that the
Transferor reasonably believes is purchasing the Capital Securities for its own
account or an account with respect to which the transferee exercises sole
investment discretion and the transferee and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A, in a transaction meeting
the requirements of Rule 144A and in accordance with applicable securities laws
of any state of the United States or any other jurisdiction.
You are entitled to rely upon this letter and are irrevocably authorized
to produce this letter or a copy thereof to any interested party in any
administrative or legal proceeding or other inquiry with respect to matters
covered hereby.
_________________________
(Name of Transferor)
By:__________________________
Name:_____________________
Title:____________________
Date:_____________________
PAGE D-1
EXHIBIT D
FORM OF TRANSFEREE CERTIFICATE
TO BE EXECUTED BY NON-U.S. PERSONS
_______________, [___]
Chandler (U.S.A.), Inc.
Chandler Capital Trust II
1010 Manvel Avenue
Chandler, Oklahoma 74834
Re: Purchase of $[SPECIFY] liquidation amount of InCapS (SM)
(THE "CAPITAL SECURITIES") OF CHANDLER CAPITAL TRUST II (THE "TRUST")
Reference is hereby made to the Amended and Restated Declaration of Trust
of Chandler Capital Trust II, dated as of December 16, 2003 (the
"Declaration"), among W. Brent LaGere, Mark T. Paden and Mark C. Hart, as
Administrators, Wilmington Trust Company, as Delaware Trustee, Wilmington Trust
Company as Institutional Trustee, Chandler (U.S.A.), Inc., as Sponsor, and the
holders from time to time of undivided beneficial interests in the assets of
the Trust. Capitalized terms used but not defined herein shall have the
meanings given them in the Declaration.
This letter relates to $[________________] aggregate liquidation amount of
Capital Securities which are held in the name of [name of transferor].
In accordance with Section 8.2(b) of the Declaration, we do hereby certify
that (i) we are not a "U.S. person" (as such term is defined in Rule 902 under
the Securities Act), (ii) we are not acquiring the Capital Securities for the
account or benefit of any U.S. person, and (iii) the offer and sale of Capital
Securities to us constitutes an "offshore transaction" under Regulation S under
the Securities Act.
You are entitled to rely upon this letter and are irrevocably authorized
to produce this letter or a copy thereof to any interested party in any
administrative or legal proceeding or other inquiry with respect to matters
covered hereby.
_______________________________________
(Name of Transferee)
By:____________________________________
Name:
Title:
Date:_______________________________
PAGE E-1
EXHIBIT E
FORM OF OFFICERS' CERTIFICATE
QUARTERLY FINANCIAL REPORT
TO: Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
PLEASE COMPLETE FOR EACH INSURANCE SUBSIDIARY
Name of Insurance Company: _________________________________
Date of Report: ___________
Current A.M. Best Insurer's Financial Strength Rating: ___________
Please provide the following information for the most recent quarterly period
ended
Quarter: March 31 __ June 30 __ September 30 __ December 31 __ Year: 20____
Most Recently Reported NAIC Risk Based Capital Ratio _________%
Total Policyholders' Surplus $________
Ratio of Consolidated Debt and Preferred Stock
to Total Policyholders' Surplus _________%
Total Admitted Assets $________
Ratio of NAIC Class 1 & 2 Rated Investments
to Total Fixed Income Investments _________%
Ratio of NAIC Class 1 & 2 Rated Investments to
Total Investments _________%
Return on Policyholders' Surplus for the Trailing Twelve Month Period _________%
For Property & Casualty Companies:
PAGE D-2
Expense Ratio _________%
Loss and LAE Ratio _________%
Combined Ratio _________%
Net Premiums Written (trailing twelve month period)
to Policyholders' Surplus _________%
PAGE D-3
CERTIFICATION
The undersigned hereby certifies that he/she has duly executed the
attached Quarterly Financial Report, dated ______, __, for and on behalf of
____________, that he/she is the _______________ of such Company, and that
he/she has authority to execute and file such instrument. The undersigned
further certifies that he/she is familiar with such instrument and that the
facts therein set forth are true to the best of his/her knowledge, information
and belief.
Name: _________________________________
PAGE D-4
LEGEND
NAIC RISK BASED CAPITAL RATIO-P&C (TOTAL ADJUSTED CAPITAL (AS DEFINED IN THE
NAIC RBC INSTRUCTIONS FOR P&C INSURERS)
/AUTHORIZED CONTROL LEVEL RISK-BASED
CAPITAL)
NAIC RISK BASED CAPITAL RATIO-LIFE (TOTAL ADJUSTED CAPITAL (AS DEFINED IN THE
NAIC RBC INSTRUCTIONS FOR LIFE INSURERS)
/AUTHORIZED CONTROL LEVEL RISK-BASED
CAPITAL)
TOTAL CAPITAL AND SURPLUS-LIFE COMMON CAPITAL STOCK + PREFERRED CAPITAL
STOCK + AGGREGATE WRITE-INS FOR OTHER THAN
SPECIAL SURPLUS FUNDS + SURPLUS NOTES +
GROSS PAID-IN AND CONTRIBUTED SURPLUS +
AGGREGATE WRITE-INS FOR SPECIAL SURPLUS
FUNDS + UNASSIGNED FUNDS (SURPLUS) + ASSET
VALUATION RESERVE - TREASURY STOCK
TOTAL CAPITAL AND SURPLUS-P&C AGGREGATE WRITE-INS FOR SPECIAL SURPLUS
FUNDS + COMMON CAPITAL STOCK + PREFERRED
CAPITAL STOCK + AGGREGATE WRITE-INS FOR
OTHER THAN SPECIAL SURPLUS FUNDS + SURPLUS
NOTES +GROSS PAID-IN AND CONTRIBUTED
SURPLUS + UNASSIGNED FUNDS (SURPLUS) -
TREASURY STOCK
TOTAL ADMITTED ASSETS TOTAL ADMITTED ASSETS AS DETERMINED IN
ACCORDANCE WITH STATUTORY ACCOUNTING
PRINCIPLES
RETURN ON POLICYHOLDERS' SURPLUS NET INCOME/POLICYHOLDERS' SURPLUS FOR THE
FOR THE TRAILING TWELVE MONTH TRAILING TWELVE MONTH PERIOD
PERIOD
EXPENSE RATIO OTHER UNDERWRITING EXPENSES INCURRED/NET
PREMIUMS EARNED
LOSS AND LAE RATIO (LOSSES INCURRED + LOSS EXPENSES
INCURRED)/NET PREMIUMS EARNED
COMBINED RATIO EXPENSE RATIO + LOSS AND LAE RATIO
NET PREMIUMS WRITTEN (TRAILING NET PREMIUMS WRITTEN OF THE TRAILING TWELVE
TWELVE MONTH PERIOD) TO MONTH PERIOD/POLICYHOLDERS' SURPLUS
POLICYHOLDERS' SURPLUS