Amended and Restated
Trust Agreement for PSEG Funding Trust II
among
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
(as Depositor)
WACHOVIA BANK, NATIONAL ASSOCIATION
(as Property Trustee)
WACHOVIA TRUST COMPANY, NATIONAL ASSOCIATION
(as Delaware Trustee)
and
THE ADMINISTRATIVE TRUSTEE NAMED HEREIN
Dated as of
December 17, 2002
PSEG Funding Trust II
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939
Trust Indenture Trust Agreement
Act Section Section
- -------------- ---------------
ss.310(a)(1)............................................................7.07
(a)(2)............................................................7.07
(a)(3)............................................................7.09
(a)(4).....................................................2.07(a)(ii)
(b)...............................................................7.08
ss.311(a)...............................................................7.13
(b)...............................................................7.13
ss.312(a)...............................................................5.07
(b)...............................................................5.07
(c)...............................................................5.07
ss.313(a)...............................................................7.14
(b)...............................................................7.14
(c)...............................................................7.14
(d)...............................................................7.14
ss.314(a)...............................................................7.15
(b).....................................................Not Applicable
(c)(1)......................................................7.16, 7.17
(c)(2)......................................................7.16, 7.17
(c)(3)..................................................Not Applicable
(d).....................................................Not Applicable
(e).............................................................. 7.17
ss.315(a)....................................................7.01(a), 7.03(a)
(b)........................................................7.02, 10.08
(c)............................................................7.01(a)
(d).........................................................7.01, 7.03
(e).....................................................Not Applicable
ss.316(a).....................................................Not Applicable
(a)(1)(A)...............................................Not Applicable
(a)(1)(B)...............................................Not Applicable
(a)(2)..................................................Not Applicable
(b).....................................................Not Applicable
(c).....................................................Not Applicable
ss.317(a)(1)..................................................Not Applicable
(a)(2)..................................................Not Applicable
(b)...............................................................5.09
ss.318(a)..............................................................10.10
- ----------
Note: This reconciliation and tie sheet shall not, for any purpose, be
deemed to be a part of the Trust Agreement.
i
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINED TERMS
Section 1.01 Definitions........................................................1
ARTICLE II
CONTINUATION OF THE TRUST
Section 2.01 Name...............................................................8
Section 2.02 Office of the Delaware Trustee; Principal Place of Business........8
Section 2.03 Initial Contribution of Trust Property; Expenses of the Trust......8
Section 2.04 Issuance of the Trust Securities...................................9
Section 2.05 Purchase of Debentures.............................................9
Section 2.06 Declaration of Trust..............................................10
Section 2.07 Authorization to Enter into Certain Transactions..................10
Section 2.08 Assets of Trust...................................................13
Section 2.09 Title to Trust Property...........................................13
ARTICLE III
PAYMENT ACCOUNT
Section 3.01 Payment Account...................................................13
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
Section 4.01 Distributions.....................................................14
Section 4.02 Redemption........................................................15
Section 4.03 Subordination of Common Securities................................16
Section 4.04 Payment Procedures................................................17
Section 4.05 Tax Returns and Reports...........................................17
Section 4.06 Payments under Indenture..........................................17
ARTICLE V
TRUST SECURITIES CERTIFICATES
Section 5.01 Initial Ownership.................................................17
Section 5.02 The Trust Securities Certificates.................................18
Section 5.03 Delivery of Trust Securities Certificates.........................18
Section 5.04 Registration of Transfer and Exchange of Preferred Securities
Certificates......................................................18
Section 5.05 Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates......................................................19
Section 5.06 Persons Deemed Securityholders....................................19
ii
Section 5.07 Access to List of Securityholders' Names and Addresses............19
Section 5.08 Maintenance of Office or Agency...................................20
Section 5.09 Appointment of Paying Agent.......................................20
Section 5.10 No Transfer of Common Securities by Depositor.....................20
Section 5.11 Book-Entry Preferred Securities Certificates; Common Securities
Certificate.......................................................21
Section 5.12 Definitive Preferred Securities Certificates......................21
Section 5.13 Rights of Securityholders.........................................21
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
Section 6.01 Limitations on Voting Rights......................................22
Section 6.02 Notice of Meetings................................................22
Section 6.03 Meetings of Holders of the Preferred Securities...................23
Section 6.04 Voting Rights.....................................................23
Section 6.05 Proxies, etc......................................................23
Section 6.06 Securityholder Action by Written Consent..........................23
Section 6.07 Record Date for Voting and Other Purposes.........................23
Section 6.08 Acts of Securityholders...........................................24
Section 6.09 Inspection of Records.............................................25
ARTICLE VII
THE TRUSTEES
Section 7.01 Certain Duties and Responsibilities...............................25
Section 7.02 Notice of Defaults; Direct Action by Securityholders..............25
Section 7.03 Certain Rights of Property Trustee................................26
Section 7.04 Not Responsible for Recitals or Issuance of Securities............28
Section 7.05 May Hold Securities...............................................28
Section 7.06 Compensation; Indemnity; Fees.....................................28
Section 7.07 Corporate Property Trustee Required; Eligibility of Trustees......29
Section 7.08 Conflicting Interests.............................................29
Section 7.09 Co-Trustees and Separate Trustee..................................29
Section 7.10 Resignation and Removal; Appointment of Successor.................31
Section 7.11 Acceptance of Appointment by Successor............................32
Section 7.12 Merger, Conversion, Consolidation or Succession to Business.......32
Section 7.13 Preferential Collection of Claims Against Depositor or Trust......32
Section 7.14 Reports by Property Trustee.......................................33
Section 7.15 Reports to the Property Trustee...................................33
Section 7.16 Evidence of Compliance with Conditions Precedent..................33
Section 7.17 Statements Required in Officers' Certificate and Opinion of
Counsel...........................................................33
Section 7.18 Number of Trustees................................................34
Section 7.19 Delegation of Power...............................................34
Section 7.20 Voting............................................................35
iii
ARTICLE VIII
DISSOLUTION AND LIQUIDATION
Section 8.01 Dissolution Upon Expiration Date..................................35
Section 8.02 Early Termination.................................................35
Section 8.03 Termination.......................................................35
Section 8.04 Winding Up........................................................35
ARTICLE IX
MERGERS, ETC.
Section 9.01 Mergers, Consolidations, Amalgamations or Replacements of the
Trust.............................................................37
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Limitation of Rights of Securityholders...........................38
Section 10.02 Amendment.........................................................38
Section 10.03 Severability......................................................39
Section 10.04 Governing Law.....................................................39
Section 10.05 Payments Due on Non-Business Day..................................39
Section 10.06 Successors and Assigns............................................40
Section 10.07 Headings..........................................................40
Section 10.08 Reports, Notices and Demands......................................40
Section 10.09 Agreement Not to Petition.........................................40
Section 10.10 Trust Indenture Act; Conflict with Trust Indenture Act............41
Section 10.11 Characterization..................................................41
Section 10.12 Acceptance of Terms of Trust Agreement, Guarantee and Indenture...41
EXHIBIT A Certificate of Trust.............................................A-1
EXHIBIT B Certificate Evidencing Common Securities.........................B-1
EXHIBIT C Certificate Evidencing Preferred Securities......................C-1
iv
AMENDED AND RESTATED TRUST AGREEMENT of PSEG Funding Trust II (the
"Trust"), dated as of December 17, 2002, among (i) Public Service Enterprise
Group Incorporated, a New Jersey corporation (the "Depositor"), (ii) Wachovia
Bank, National Association (formerly known as First Union National Bank), a
banking association organized under the laws of the United States, as trustee
(the "Property Trustee"), (iii) Wachovia Trust Company, National Association
(formerly known as First Union Trust Company, National Association), a banking
association organized under the laws of the United States, whose address in
Delaware is One Rodney Square, 920 King Street, Suite 102, Wilmington, Delaware
19801, as Delaware trustee (the "Delaware Trustee"), (iv) Mark G. Kahrer, an
individual whose address is c/o Public Service Enterprise Group Incorporated, 80
Park Plaza, P.O. Box 1171, Newark, New Jersey 07101 (the "Administrative
Trustee") (the Property Trustee, the Delaware Trustee and the Administrative
Trustee are referred to collectively as the "Trustees"), and (v) the several
Holders, as hereinafter defined.
WITNESSETH:
WHEREAS, the Depositor, the Delaware Trustee and the Administrative
Trustee have heretofore duly declared and established a statutory trust pursuant
to the Delaware Statutory Trust Act by entering into a Trust Agreement, dated as
of July 31, 2002 (the "Original Trust Agreement"), and by executing and filing
with the Secretary of State of the State of Delaware a Certificate of Trust on
August 1, 2002, a form of which is attached hereto as Exhibit A; and
WHEREAS, the Depositor, the Property Trustee, the Delaware Trustee
and the Administrative Trustee desire to amend and restate the Original Trust
Agreement in its entirety as set forth herein to provide for, among other
things, (i) the issuance of the Common Securities, as hereinafter defined, by
the Trust to the Depositor, (ii) the issuance and sale of the Preferred
Securities, as hereinafter defined, by the Trust pursuant to the Underwriting
Agreement, as hereinafter defined, and (iii) the acquisition by the Trust from
the Depositor of the Debentures, as hereinafter defined.
NOW, THEREFORE, in consideration of the agreements and obligations
set forth herein and for other good and valuable consideration, the sufficiency
of which is hereby acknowledged, each party, for the benefit of the other party
and for the benefit of the Securityholders, as hereinafter defined, hereby
amends and restates the Original Trust Agreement in its entirety and agrees as
follows:
ARTICLE I
Defined Terms
Section 1.01 Definitions. For all purposes of this Trust Agreement, except
as otherwise expressly provided or unless the context otherwise requires:
(a) each term defined in this Article I has the meaning assigned to
it in this Article I and includes the plural as well as the singular;
(b) each of the other terms used herein that is defined in the Trust
Indenture Act, either directly or by reference therein, has the meaning assigned
to it therein;
1
(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Trust Agreement; and
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.08.
"Administrative Trustee" means the individual identified as the
"Administrative Trustee" in the preamble to this Trust Agreement, solely in
his/her capacity as Administrative Trustee of the Trust and not in his/her
individual capacity, or such Administrative Trustee's successor in interest in
such capacity, or any successor trustee appointed as herein provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Bankruptcy Event" means, with respect to any Person, the occurrence of
any of the following events:
(a) Such Person, pursuant to or within the meaning of any Bankruptcy
Law:
(i) commences a voluntary case or proceeding;
(ii) consents to the entry of an order for relief against it
in an involuntary case or proceeding;
(iii) consents to the appointment of a Custodian, as
hereinafter defined, of it or for all or substantially all of its property, and
such Custodian is not discharged within 60 days;
(iv) makes a general assignment for the benefit of its
creditors; or
(v) admits in writing its inability to pay its debts generally
as they become due; or
(b) A court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against such Person in an involuntary case
or proceeding;
2
(ii) appoints a Custodian of such Person for all or
substantially all of its properties;
(iii) orders the liquidation of such Person;
(iv) and in each case the order or decree remains unstayed and
in effect for 60 days.
"Bankruptcy Laws" means Title 11 of the United States Code, or similar
federal or state law for the relief of debtors. "Custodian" means any receiver,
trustee, assignee, liquidator, sequestrator, custodian or similar official under
any Bankruptcy Law.
"Board Resolution" means (i) a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Depositor to have been duly adopted
by the Depositor's Board of Directors or a committee established thereby and to
be in full force and effect on the date of such certification or (ii) a
certificate signed by the authorized officer or officers of the Depositor to
whom the Depositor's Board of Directors or a committee established thereby has
delegated its authority, and in each case, delivered to the Trustees.
"Book-Entry Preferred Securities Certificates" means certificates
representing Preferred Securities issued in global, fully registered form with
the Clearing Agency as described in Section 5.11.
"Business Day" means a day other than (a) a Saturday or Sunday, or (b) a
day on which banking institutions in The City of New York or the State of New
Jersey are required by law or executive order to remain closed.
"Certificate Depository Agreement" means the agreement among the Trust,
the Property Trustee and The Depository Trust Company, as the initial Clearing
Agency, dated as of the Closing Date, relating to the Book-Entry Preferred
Securities Certificates, as the same may be amended and supplemented from time
to time.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder. The Depository Trust Company
will be the initial Clearing Agency.
"Closing Date" means the Time of Delivery as defined in the Underwriting
Agreement, which date is also the date of execution and delivery of this Trust
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
or, if at any time after the execution of this Trust Agreement such Commission
is not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
3
"Common Security" means an undivided beneficial interest in the assets of
the Trust, having a Liquidation Amount of $25 and having the terms provided
therefor in this Trust Agreement, any Annex hereto and the certificate
representing such interest, including the right to receive Distributions and a
Liquidation Distribution as provided herein.
"Common Securities Certificate" means a certificate evidencing ownership
of Common Securities, substantially in the form attached hereto as Exhibit B.
"Corporate Trust Office" means the principal corporate trust office of the
Property Trustee located in the State of New Jersey which at the date hereof is
21 South Street, Morristown, New Jersey 07960.
"Creditor" has the meaning specified in Section 2.03.
"Debenture Event of Default" means an "Event of Default" as defined in the
Indenture with respect to the Debentures.
"Debenture Redemption Date" means "Redemption Date" as defined in the
Indenture with respect to the Debentures.
"Debenture Trustee" means Wachovia Bank, National Association, a banking
association organized under the laws of the United States, in its capacity as
trustee under the Indenture, or any successor thereto, appointed in accordance
with the terms and provisions of the Indenture.
"Debentures" means the Depositor's 8.75% Deferrable Interest Junior
Subordinated Debentures, Series D, issued pursuant to the Indenture.
"Definitive Preferred Securities Certificates" means certificates
representing Preferred Securities issued in certificated, fully registered form
as described in Section 5.12.
"Delaware Statutory Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C.ss.3801, et seq., as it may be amended from time to
time.
"Delaware Trustee" means the entity identified as the "Delaware Trustee"
in the preamble to this Trust Agreement solely in its capacity as Delaware
Trustee of the Trust and not in its individual capacity, or its successor in
interest in such capacity, or any successor trustee appointed as herein
provided.
"Depositor" has the meaning specified in the preamble to this Trust
Agreement.
"Distribution Date" has the meaning specified in Section 4.01(a).
"Distributions" means amounts payable in respect of the Trust Securities
as provided in Section 4.01.
"Event of Default" means the occurrence of a Debenture Event of Default
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary
4
or be effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body).
"Expiration Date" has the meaning specified in Section 8.01.
"Extension Period" means the period or periods in which pursuant to the
Indenture payments of interest on the Debentures are deferred by extending the
interest payment periods thereof.
"Guarantee" means the Guarantee Agreement executed and delivered by the
Depositor to Wachovia Bank, National Association, a banking association
organized under the laws of the United States, as trustee thereunder,
contemporaneously with the execution and delivery of this Trust Agreement, for
the benefit of the Holders of the Preferred Securities, as amended from time to
time.
"Indenture" means the Indenture, dated as of December 17, 2002, between
the Depositor and the Debenture Trustee, as trustee thereunder, as amended or
supplemented from time to time.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust Securities,
Trust Securities having an aggregate Liquidation Amount equal to the aggregate
principal amount of Debentures to be repaid in accordance with the Indenture and
(b) with respect to a distribution of Debentures to Holders of Trust Securities
in connection with a dissolution of the Trust, Debentures having an aggregate
principal amount equal to the aggregate Liquidation Amount of the Trust
Securities in exchange for which such Debentures are distributed.
"Liquidation Amount" means the liquidation amount of $25 per Trust
Security.
"Liquidation Date" means the date on which Debentures are to be
distributed to Holders of Trust Securities in connection with a dissolution of
the Trust pursuant to Section 8.04(a).
"Liquidation Distribution" has the meaning specified in Section 8.04(d).
"1940 Act" means the Investment Company Act of 1940, as amended.
"Officers' Certificate" means a certificate signed by two of the following
persons: the Chairman, the President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Depositor.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Trust, the Property Trustee or the Depositor or an Affiliate of
the Depositor, but not an employee of any thereof, and who shall be acceptable
to the Property Trustee.
5
"Original Trust Agreement" has the meaning specified in the recitals to
this Trust Agreement.
"Outstanding", when used with respect to Trust Securities, means, as of
the date of determination, all Trust Securities represented by Trust Securities
Certificates theretofore executed and delivered under this Trust Agreement,
except:
(a) Trust Securities represented by Trust Securities Certificates
theretofore cancelled by the Administrative Trustee or delivered to the
Administrative Trustee for cancellation;
(b) Trust Securities for whose redemption money in the necessary
amount has been theretofore deposited with the Property Trustee or any Paying
Agent for the Holders of such Trust Securities; provided that, if such Trust
Securities are to be redeemed, notice of such redemption has been duly given
pursuant to this Trust Agreement;
(c) Trust Securities which have been paid or Trust Securities
represented by Trust Securities Certificates in exchange for or in lieu of which
other Trust Securities Certificates have been executed and delivered pursuant to
Section 5.05, other than any such Trust Securities Certificates in respect of
which there shall have been presented to the Property Trustee proof satisfactory
to it that such Trust Securities Certificates are held by a protected purchaser;
and
(d) as provided in Section 8.04(c);
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Preferred Securities owned by the Depositor, any Trustee or any Affiliate of the
Depositor or any Trustee shall be disregarded and deemed not to be Outstanding,
except that (a) in determining whether any Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Preferred Securities which such Trustee actually knows to be so
owned shall be so disregarded and (b) the foregoing shall not apply at any time
when all of the Outstanding Preferred Securities are owned by the Depositor, one
or more of the Trustees and/or any such Affiliate. Preferred Securities so owned
which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Administrative Trustee the
pledgee's right so to act with respect to such Preferred Securities and that the
pledgee is not the Depositor or any Affiliate of the Depositor.
"Paying Agent" means the Property Trustee and any co-paying agent
appointed pursuant to Section 5.09.
"Payment Account" means a segregated non-interest-bearing corporate trust
account maintained by the Property Trustee in its trust department for the
benefit of the Securityholders in which all amounts paid to the Property Trustee
in respect of the Debentures or the Guarantee will be held and from which the
Property Trustee or such other Paying Agent shall make payments to the
Securityholders in accordance with Article 4.
6
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.
"Preferred Security" means a Preferred Security issued by the Trust, and
having an undivided beneficial interest in the assets of the Trust, having a
Liquidation Amount of $25 and having terms provided therefor in this Trust
Agreement, any Annex hereto and the certificate representing such interest,
including the right to receive Distributions and a Liquidation Distribution as
provided herein.
"Preferred Securities Certificate" means a certificate evidencing
ownership of one or more Preferred Securities, substantially in the form
attached hereto as Exhibit C.
"Property Trustee" means the commercial bank or trust company identified
as the "Property Trustee" in the preamble to this Trust Agreement solely in its
capacity as Property Trustee of the Trust and not in its individual capacity, or
its successor in interest in such capacity, or any successor property trustee
appointed as herein provided.
"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; it being understood that each Debenture Redemption Date and the
stated maturity date of the Debentures shall be a Redemption Date for a Like
Amount of Trust Securities.
"Redemption Price" means, with respect to any Trust Security, 100% of the
Liquidation Amount of such Trust Security, upon maturity of the Debentures or
earlier redemption, in each case, plus accumulated and unpaid Distributions
thereon to the Redemption Date.
"Responsible Officer" means, when used with respect to the Property
Trustee, any vice president, assistant vice president, senior trust officer,
trust officer, assistant trust officer or other officer associated with the
corporate trust department of the Property Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of such person's knowledge of
and familiarity with the particular subject.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.04.
"Securityholder" or "Holder" means a Person in whose name a Trust Security
or Securities is registered in the Securities Register; any such Person is a
beneficial owner within the meaning of the Delaware Statutory Trust Act.
"Successor Securities" has the meaning specified in Section 9.01.
"Trust" means the Delaware statutory trust continued hereby and identified
on the cover page to this Trust Agreement.
7
"Trust Agreement" means this Amended and Restated Trust Agreement, as the
same may be modified, amended or supplemented in accordance with the applicable
provisions hereof, including all exhibits hereto, including, for all purposes of
this Trust Agreement and any such modification, amendment or supplement, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this Trust Agreement and any such modification, amendment or supplement,
respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this Trust Agreement was executed; provided, however, that
in the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trust Property" means (a) the Debentures, (b) any cash on deposit in, or
owing to, the Payment Account and (c) all proceeds and rights in respect of the
foregoing and any other property and assets for the time being held or deemed to
be held by the Property Trustee pursuant to the trusts of this Trust Agreement.
"Trust Security" means any one of the Common Securities or the Preferred
Securities.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.
"Underwriting Agreement" means the Underwriting Agreement, dated December
11, 2002, among the Trust, the Depositor and the Underwriters named therein.
ARTICLE II
Continuation of the Trust
Section 2.01 Name. The Trust created and continued hereby shall be known
as "PSEG Funding Trust II" as such name may be modified from time to time by the
Administrative Trustee following written notice to the Holders of Trust
Securities and the other Trustees, in which name the Trustees may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and sue and be sued.
Section 2.02 Office of the Delaware Trustee; Principal Place of Business.
The address of the Delaware Trustee in the State of Delaware is One Rodney
Square, 920 King Street, Suite 102, Wilmington, Delaware 19801 or such other
address in the State of Delaware as the Delaware Trustee may designate by
written notice to the Securityholders and the Depositor. The principal place of
business of the Trust is 80 Park Plaza, Newark, New Jersey 07101.
Section 2.03 Initial Contribution of Trust Property; Expenses of the
Trust.
(a) The Property Trustee acknowledges receipt in trust from the
Depositor in connection with the Original Trust Agreement of the sum of $10,
which constituted the initial Trust Property.
8
(b) The Depositor shall be responsible for and shall pay for all
obligations (other than with respect to the Trust Securities) and all costs and
expenses of the Trust (including, but not limited to, costs and expenses
relating to the organization of the Trust, the issuance and sale of the
Preferred Securities, the fees and expenses (including reasonable counsel fees
and expenses) of the Trustees as provided in Section 7.06, the costs and
expenses of accountants, attorneys, statistical or bookkeeping services,
expenses for printing and engraving and computing or accounting equipment,
Paying Agent(s), Securities Registrar, duplication, travel and telephone and
other telecommunications expenses and costs and expenses incurred in connection
with the disposition of Trust assets).
(c) The Depositor will pay any and all taxes (other than United
States withholding taxes attributable to the Trust or its assets) and all
liabilities, costs and expenses with respect to such taxes of the Trust.
(d) The Depositor's obligations under this Section 2.03 shall be for
the benefit of, and shall be enforceable by, the Property Trustee and any Person
to whom any such obligations, costs, expenses and taxes are owed (a "Creditor")
whether or not such Creditor has received notice hereof. The Property Trustee
and any such Creditor may enforce the Depositor's obligations under this Section
2.03 directly against the Depositor and the Depositor irrevocably waives any
right or remedy to require that the Property Trustee or any such Creditor take
any action against the Trust or any other Person before proceeding against the
Depositor. The Depositor agrees to execute such additional agreements as may be
necessary or desirable in order to give full effect to the provisions of this
Section 2.03.
(e) The Depositor shall make no claim upon the Trust Property for
the payment of such expenses.
Section 2.04 Issuance of the Trust Securities. The Depositor, on behalf of
the Trust and pursuant to the Original Trust Agreement, executed and delivered
the Underwriting Agreement. Contemporaneously with the execution and delivery of
this Trust Agreement, the Administrative Trustee, on behalf of the Trust, shall
execute in accordance with Section 5.02 and deliver to the Underwriters named in
the Underwriting Agreement one or more Book-Entry Preferred Securities
Certificates, registered in the name of the nominee of the initial Clearing
Agency, representing 7,200,000 Preferred Securities having an aggregate
Liquidation Amount of $180,000,000, against receipt by the Property Trustee of
the aggregate purchase price of such Preferred Securities of $180,000,000, which
amount the Administrative Trustee shall promptly deliver to the Property
Trustee. Contemporaneously therewith, the Administrative Trustee, on behalf of
the Trust, shall execute in accordance with Section 5.02 and deliver to the
Depositor a Common Securities Certificate, registered in the name of the
Depositor, representing 222,681 Common Securities having an aggregate
Liquidation Amount of $5,567,025, and in satisfaction of the purchase price of
such Common Securities the Depositor shall deliver to the Property Trustee the
sum of $5,567,025. The Trust Securities may have such additional or different
terms specified in an Annex hereto.
Section 2.05 Purchase of Debentures. Contemporaneously with the execution
and delivery of this Trust Agreement (i) the Administrative Trustee, on behalf
of the Trust, shall purchase $185,567,025 aggregate principal amount of
Debentures from the Depositor, registered
9
in the name of the Trust and (ii) in satisfaction of the purchase price for such
Debentures, the Property Trustee, on behalf of the Trust, shall deliver to the
Depositor the sum of $185,567,025.
Section 2.06 Declaration of Trust. The exclusive purposes and functions of
the Trust are (a) to issue and sell Trust Securities and use the proceeds from
such sale to acquire the Debentures and to hold, transfer, sell and otherwise
dispose of the Debentures in accordance with this Trust Agreement, (b) to
maintain the status of the Trust as a grantor trust for United States Federal
income tax purposes, and (c) except as otherwise limited herein, to engage in
only those activities necessary, convenient or incidental thereto. The Depositor
hereby appoints the Trustees as trustees of the Trust, to have all the rights,
powers and duties to the extent set forth herein, and the Trustees hereby accept
such appointment. The Property Trustee hereby declares that it will hold the
Trust Property in trust upon and subject to the conditions set forth herein for
the benefit of the Securityholders. The Administrative Trustee shall have all
rights, powers and duties set forth herein. The Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities of the Property Trustee or the Administrative
Trustee set forth herein. The Delaware Trustee shall be one of the Trustees of
the Trust for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Delaware Statutory Trust Act.
Section 2.07 Authorization to Enter into Certain Transactions.
(a) The Trustees shall conduct the affairs of the Trust in accordance with
the terms of this Trust Agreement. Subject to the limitations set forth in
paragraph (b) of this Section, and in accordance with the following provisions
(i) and (ii), the Trustees shall have the authority to enter into all
transactions and agreements determined by the Trustees to be appropriate in
exercising the authority, express or implied, otherwise granted to the Trustees
under this Trust Agreement, and to perform all acts in furtherance thereof,
including without limitation, the following:
(i) As among the Trustees, the Administrative Trustee shall have the
power and authority to act on behalf of the Trust with respect to the following
matters:
(A) executing and delivering the Trust Securities on behalf of
the Trust;
(B) causing the Trust to enter into, and executing, delivering
and performing on behalf of the Trust, the Certificate Depository Agreement and
such other agreements as may be necessary or desirable in connection with the
purposes and function of the Trust, including the appointment of a successor
depositary;
(C) assisting in registering the Preferred Securities under
the Securities Act of 1933, as amended, and under state securities or blue sky
laws, and qualifying this Trust Agreement as a trust indenture under the Trust
Indenture Act;
(D) assisting in the listing of the Preferred Securities upon
such securities exchange or exchanges as the Depositor shall determine and the
registration of the Preferred Securities under the Securities Exchange Act of
1934, as amended, and the
10
preparation and filing of all periodic and other reports and other documents
pursuant to the foregoing;
(E) to the extent provided in this Trust Agreement,
dissolving, liquidating and terminating the Trust in accordance with the terms
of this Trust Agreement, and preparing, executing and filing the certificate of
cancellation with the Secretary of State of the State of Delaware, if necessary;
(F) sending notices or assisting the Property Trustee in
sending notices and other information regarding the Trust Securities and the
Debentures to Securityholders in accordance with this Trust Agreement; and
(G) taking any action incidental to the foregoing as the
Administrative Trustee may from time to time determine is necessary or advisable
to give effect to the terms of this Trust Agreement for the benefit of the
Securityholders (without consideration of the effect of any such action on any
particular Securityholder).
(ii) As among the Trustees, the Property Trustee shall have the
power, duty and authority to act on behalf of the Trust with respect to the
following matters:
(A) establishing and maintaining the Payment Account and
appointing Paying Agents (subject to Section 5.09);
(B) receiving payment of the purchase price of the Trust
Securities;
(C) receiving and holding the Debentures;
(D) collecting interest, premium, if any, and principal
payments on the Debentures and depositing them in the Payment Account;
(E) making Distributions and other payments to the
Securityholders in respect of the Trust Securities;
(F) exercising all of the rights, powers and privileges of a
holder of the Debentures;
(G) sending notices of defaults, redemptions, Extension
Periods, liquidations and other information regarding the Trust Securities and
the Debentures to the Securityholders in accordance with this Trust Agreement;
(H) to the extent provided in this Trust Agreement,
dissolving, liquidating and terminating the Trust, including distributing the
Trust Property in accordance with the terms of this Trust Agreement, and
preparing, executing and filing the certificate of cancellation with the
Secretary of State of the State of Delaware, if necessary;
(I) after an Event of Default, taking any action incidental to
the foregoing as the Property Trustee may from time to time determine is
necessary
11
or advisable to give effect to the terms of this Trust Agreement and protect and
conserve the Trust Property for the benefit of the Securityholders (without
consideration of the effect of any such action on any particular
Securityholder); and
(J) registering transfers and exchanges of the Preferred
Securities in accordance with this Trust Agreement (but only if at such time the
Property Trustee shall be the Securities Registrar).
(b) So long as this Trust Agreement remains in effect, the Trust (or
the Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trustees acting on behalf of the Trust shall not (i)
acquire any assets or investments (other than the Debentures), reinvest the
proceeds derived from investments, possess any power or otherwise act in such a
way as to vary the Trust Property or engage in any activities not authorized by
this Trust Agreement, (ii) sell, assign, transfer, exchange, mortgage, pledge,
set-off or otherwise dispose of any of the Trust Property or interests therein,
including to Securityholders, except as expressly provided herein, (iii) take
any action that would cause the Trust to fail or cease to qualify as a grantor
trust for United States Federal income tax purposes, (iv) incur any indebtedness
for borrowed money or incur any other obligations, (v) issue any securities or
other evidences of beneficial ownership of, or beneficial interests in, the
Trust other than the Trust Securities, or (vi) take or consent to any action
that would result in the placement of a Lien on any of the Trust Property. The
Administrative Trustee shall defend all claims and demands of all Persons at any
time claiming any Lien on any of the Trust Property adverse to the interest of
the Trust or the Securityholders in their capacity as Securityholders.
(c) In connection with the issue and sale of the Preferred
Securities, the Depositor shall have the right and responsibility to assist the
Trust with respect to, or effect on behalf of the Trust, the following (and any
actions taken by the Depositor in furtherance of the following prior to the date
of this Trust Agreement are hereby ratified and confirmed in all respects):
(i) preparing for filing with the Commission and executing on
behalf of the Trust a registration statement on Form S-3 in relation to the
Preferred Securities, including any amendments thereto;
(ii) determining the States in which to take appropriate
action to qualify or register for sale all or part of the Preferred Securities
and doing any and all such acts, other than actions which must be taken by or on
behalf of the Trust, and advising the Trustees of actions they must take on
behalf of the Trust, and preparing for execution and filing any documents to be
executed and filed by the Trust or on behalf of the Trust, as the Depositor
deems necessary or advisable in order to comply with the applicable laws of any
such States;
(iii) preparing for filing and executing on behalf of the
Trust an application to the New York Stock Exchange or any other national stock
exchange or The Nasdaq Stock Market for listing upon notice of issuance of any
Preferred Securities;
12
(iv) preparing for filing with the Commission and executing on
behalf of the Trust a registration statement on Form 8-A relating to the
registration of the Preferred Securities under Section 12(b) or 12(g) of the
Securities Exchange Act of 1934, as amended, including any amendments thereto;
(v) negotiating the terms of, and executing and delivering,
the Underwriting Agreement providing for the sale of the Preferred Securities;
and
(vi) taking any other actions necessary or desirable to carry
out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrative Trustee is 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 1940 Act, or taxed as a
corporation or a partnership for United States Federal income tax purposes (ii)
the Trust will qualify as a grantor trust for United States Federal income tax
purposes and (iii) the Debentures will be treated as indebtedness of the
Depositor for United States Federal income tax purposes. In this connection, the
Depositor and the Administrative Trustee are authorized to take any action, not
inconsistent with applicable law, the Certificate of Trust, as amended from time
to time, or this Trust Agreement, that each of the Depositor and the
Administrative Trustee determines in their discretion to be necessary or
desirable for such purposes.
Section 2.08 Assets of Trust. The assets of the Trust shall consist of the
Trust Property.
Section 2.09 Title to Trust Property. Legal title to all Trust Property
shall be vested at all times in the Property Trustee (in its capacity as such)
and shall be held and administered by the Property Trustee for the benefit of
the Securityholders in accordance with this Trust Agreement.
ARTICLE III
Payment Account
Section 3.01 Payment Account.
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. All monies and other property deposited or held
from time to time in the Payment Account shall be held by the Property Trustee
for the exclusive benefit of the Securityholders. The Property Trustee shall
have exclusive control of the Payment Account for the purpose of making deposits
in and withdrawals from the Payment Account in accordance with this Trust
Agreement; provided that any Paying Agent shall have the right of withdrawal
with respect to the Payment Account solely for the purpose of making the
payments contemplated under Article IV.
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal of or premium, if any, or
interest on
13
the Debentures and any amounts paid to the Property Trustee pursuant to the
Guarantee. Amounts held in the Payment Account shall not be invested pending
distribution thereof.
ARTICLE IV
Distributions; Redemption
Section 4.01 Distributions.
(a) Distributions on the Trust Securities shall be cumulative,
and will accumulate whether or not there are funds of the Trust available for
the payment of Distributions. Distributions shall accumulate from December 17,
2002 and, except during an Extension Period for the Debentures pursuant to the
Indenture, shall be payable quarterly in arrears on March 31, June 30, September
30 and December 31 of each year, commencing on March 31, 2003. If any date on
which Distributions are otherwise payable on the Trust Securities is not a
Business Day, then the payment of such Distributions shall be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, payment of such Distributions shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date (each date on which Distributions are payable in
accordance with this Section 4.01(a) is referred to as a "Distribution Date").
Within two Business Days after receipt by the Property Trustee of
notice of an Extension Period pursuant to Section 4.01 of the Indenture, the
Property Trustee shall give notice thereof to the Securityholders by first class
mail, postage prepaid.
(b) The Trust Securities represent undivided beneficial
interests in the Trust Property, and, subject to Sections 4.03 and 4.06 hereof,
all Distributions will be made pro rata on each of the Trust Securities.
Distributions on the Trust Securities shall be payable at a rate of 8.75% per
annum of the Liquidation Amount of the Trust Securities. During an Extension
Period for the Debentures, the rate per annum at which Distributions on the
Trust Securities are then accumulating shall be increased by an amount such that
the aggregate amount of Distributions that accumulate on all Trust Securities
during any such Extension Period is equal to the aggregate amount of interest
(including interest payable on unpaid interest at the rate per annum referred to
above, compounded quarterly) that accrues during any such Extension Period on
the Debentures.
(c) Distributions on the Trust Securities shall be made from
the Payment Account by the Property Trustee or any Paying Agent and shall be
payable on each Distribution Date only to the extent that the Trust has funds
then available in the Payment Account for the payment of such Distributions.
(d) Distributions on the Trust Securities on each Distribution
Date shall be payable to the Holders thereof as they appear on the Securities
Register for the Trust Securities on the relevant record date, which shall be
one Business Day prior to such Distribution Date; provided, however, that in the
event that the Preferred Securities are not in book-entry-only form, the
relevant record date shall be the 15th calendar day preceding such Distribution
Date, whether or not a Business Day.
14
Section 4.02 Redemption.
(a) Upon receipt by the Trust of a notice of redemption of
Debentures, the Trust will call for redemption a Like Amount of Outstanding
Trust Securities on the Debenture Redemption Date and will call for redemption
all Outstanding Trust Securities on the stated maturity date of the Debentures,
in each case, at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Securities Register. All notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) the place or places where Trust Securities Certificates
are to be surrendered for payment of the Redemption Price;
(v) that on the Redemption Date the Redemption Price will
become payable upon each such Trust Security to be redeemed and that
Distributions thereon will cease to accumulate on and after such date; and
(vi) if less than all of the Outstanding Trust Securities are
to be redeemed, the identification and total Liquidation Amount of the
particular Trust Securities to be redeemed.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption or payment at maturity of Debentures. Redemptions of the Trust
Securities shall be made and the Redemption Price shall be payable on each
Redemption Date only to the extent that the Trust has funds then available in
the Payment Account for the payment of such Redemption Price.
(d) If the Trust, by action of the Property Trustee, gives a notice
of redemption in respect of any Preferred Securities, then, on the Redemption
Date, subject to Section 4.02(c), the Property Trustee will irrevocably deposit
with the Paying Agent funds sufficient to pay the Redemption Price for the
Preferred Securities being redeemed on such date and will give the Paying Agent
irrevocable instructions and authority to pay the Redemption Price to the
Holders of such Preferred Securities upon surrender of their Preferred
Securities Certificates. Notwithstanding the foregoing, Distributions payable on
or prior to the Redemption Date for any Trust Securities called for redemption
shall be payable to the Holders of such Trust Securities as they appear on the
Securities Register for the Trust Securities on the record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
irrevocably deposited as required, then upon the date of such deposit, all
rights of Securityholders holding Trust Securities so called for redemption will
cease, except the right of such Securityholders to receive the Redemption Price,
but without interest, and such Trust
15
Securities will cease to be Outstanding. In the event that any date on which any
Redemption Price is payable is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment will be made on the immediately preceding Business
Day, in each case, with the same force and effect as if made on such date. In
the event that payment of the Redemption Price in respect of any Trust
Securities called for redemption is improperly withheld or refused, and not paid
either by the Trust or by the Depositor pursuant to the Guarantee, Distributions
on such Trust Securities will continue to accumulate, at the then applicable
rate, from the Redemption Date originally established by the Trust for such
Trust Securities to the date such Redemption Price is actually paid, in which
case the actual payment date will be the date fixed for redemption for purposes
of calculating the Redemption Price.
(e) If less than all the Outstanding Trust Securities are to be
redeemed on a Redemption Date, then the aggregate Liquidation Amount of Trust
Securities to be redeemed shall be allocated 3% to the Common Securities and 97%
to the Preferred Securities. The particular Preferred Securities to be redeemed
shall be selected by the Property Trustee from the Outstanding Preferred
Securities not previously called for redemption, by such method as the Property
Trustee shall deem fair and appropriate. The Property Trustee shall promptly
notify the Securities Registrar in writing of the Preferred Securities selected
for redemption. If fewer than all of the Trust Securities represented by a Trust
Securities Certificate are redeemed, the Administrative Trustee shall execute
for the Holder a new Trust Securities Certificate representing the unredeemed
Trust Securities. For all purposes of this Trust Agreement, unless the context
otherwise requires, all provisions relating to the redemption of Preferred
Securities shall relate, in the case of any Preferred Securities redeemed or to
be redeemed only in part, to the portion of the Liquidation Amount of Preferred
Securities which has been or is to be redeemed.
Section 4.03 Subordination of Common Securities.
(a) Payment of Distributions on, and the Liquidation, Distribution
and Redemption Price of, the Trust Securities, as applicable, shall be made pro
rata based on the Liquidation Amount of the Trust Securities; provided, however,
that if on any applicable date, a Debenture Event of Default shall have occurred
and be continuing, no payment of any Distribution on, or Liquidation,
Distribution and Redemption Price of, any Common Security, and no other payment
on account of the Common Securities, shall be made unless payment in full in
cash of all accumulated and unpaid Distributions on all Outstanding Preferred
Securities for all distribution periods terminating on or prior thereto, or in
the case of payment of the Liquidation, Distribution and Redemption Price, the
full amount of such Liquidation, Distribution and Redemption Price applicable to
all Outstanding Preferred Securities then outstanding or then being redeemed, as
the case may be, shall have been made or provided for, and all funds immediately
available to the Property Trustee shall first be applied to the payment in full
in cash of all Distributions on, or the Liquidation, Distribution and Redemption
Price of, Preferred Securities then due and payable.
(b) In the case of the occurrence of any Debenture Event of Default,
the Holder of Common Securities will be deemed to have waived any right to act
with respect to
16
any related Event of Default under this Trust Agreement and such Debenture Event
of Default until the effect of such related Event of Default and such Debenture
Event of Default has been cured, waived or otherwise eliminated. Until any such
Event of Default under this Trust Agreement and such Debenture Event of Default
has been so cured, waived or otherwise eliminated, the Property Trustee shall
act solely on behalf of the Holders of the Preferred Securities and not the
Holder of the Common Securities, and only the Holders of the Preferred
Securities will have the right to direct the Property Trustee to act on their
behalf.
Section 4.04 Payment Procedures. Payments of Distributions pursuant to
Section 4.01 in respect of the Preferred Securities shall be made by check
mailed to the address of the Holder thereof as such address shall appear on the
Securities Register or, if the Preferred Securities are held by a Clearing
Agency, such Distributions shall be made to the Clearing Agency by wire transfer
in immediately available funds. Payments of Distributions pursuant to Section
4.01 in respect of the Common Securities shall be made in such manner as shall
be mutually agreed between the Property Trustee and the Holder of the Common
Securities. Payment of the Redemption Price or Liquidation Distribution of the
Trust Securities shall be made in immediately available funds upon surrender of
the Preferred Securities Certificate representing such Preferred Securities at
the Corporate Trust Office of the Property Trustee.
Section 4.05 Tax Returns and Reports. The Administrative Trustee shall
prepare (or cause to be prepared), at the Depositor's expense, and file all
Federal, State and local tax and information returns and reports required to be
filed by or in respect of the Trust. In this regard, the Administrative Trustee
shall (a) prepare and file (or cause to be prepared or filed) the appropriate
Internal Revenue Service Form required to be filed in respect of the Trust in
each taxable year of the Trust and (b) prepare and furnish (or cause to be
prepared and furnished) to each Securityholder the related Internal Revenue
Service Form 1099, or any successor form or the information required to be
provided on such form. The Administrative Trustee shall provide the Depositor
and the Property Trustee with a copy of all such returns, reports and schedules
promptly after such filing or furnishing. The Trustees shall comply with United
States Federal withholding and backup withholding tax laws and information
reporting requirements with respect to any payments to Securityholders under the
Trust Securities.
Section 4.06 Payments under Indenture. Any amount payable hereunder to any
Holder of Preferred Securities shall be reduced by the amount of any
corresponding payment such Holder has directly received pursuant to Section 6.07
of the Indenture or pursuant to the Guarantee. Notwithstanding the provisions
hereunder to the contrary, Securityholders acknowledge that any Holder of
Preferred Securities that receives payment under Section 6.07 of the Indenture
may receive amounts greater than the amount such Holder may be entitled to
receive pursuant to the other provisions of this Trust Agreement.
ARTICLE V
Trust Securities Certificates
Section 5.01 Initial Ownership. Upon the creation of the Trust and the
contribution by the Depositor pursuant to Section 2.03 and until the issuance of
the Trust Securities, and at any time during which no Trust Securities are
outstanding, the Depositor shall be the sole beneficial owner of the Trust.
17
Section 5.02 The Trust Securities Certificates. The Trust Securities
Certificates shall be issued representing one or more Preferred Securities.
Preferred Securities Certificates representing fractional interests shall not be
issued. The Trust Securities Certificates shall be executed on behalf of the
Trust by manual or facsimile signature of the Administrative Trustee. Trust
Securities Certificates bearing the manual signature of an individual who was,
at the time when such signature shall have been affixed, authorized to sign on
behalf of the Trust, shall be validly issued and entitled to the benefits of
this Trust Agreement, notwithstanding that such individual shall have ceased to
be so authorized prior to the delivery of such Trust Securities Certificates or
did not hold such office at the date of delivery of such Trust Securities
Certificates. A transferee of a Trust Securities Certificate shall become a
Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Section 5.04.
Section 5.03 Delivery of Trust Securities Certificates. On the Closing
Date, the Administrative Trustee shall cause Trust Securities Certificates, in
an aggregate Liquidation Amount as provided in Sections 2.04 and 2.05, to be
executed on behalf of the Trust as provided in Section 5.02.
Section 5.04 Registration of Transfer and Exchange of Preferred Securities
Certificates. A registrar appointed by the Depositor (the "Securities
Registrar") shall keep or cause to be kept, at the office or agency maintained
pursuant to Section 5.08, a register (the "Securities Register") in which,
subject to such reasonable regulations as it may prescribe, the Securities
Registrar shall provide for the registration of Trust Securities Certificates
(subject to Section 5.10 in the case of the Common Securities Certificates) and
registration of transfers and exchanges of Preferred Securities Certificates as
herein provided. The Property Trustee shall be the initial Securities Registrar;
any successor Securities Registrar shall be appointed by the Administrative
Trustee.
Upon surrender for registration of transfer of any Preferred
Securities Certificate at the office or agency maintained pursuant to Section
5.08, the Administrative Trustee shall execute and deliver, in the name of the
designated transferee or transferees, one or more new Preferred Securities
Certificates representing the same number of Preferred Securities dated the date
of execution by the Administrative Trustee. At the option of a Holder, Preferred
Securities Certificates may be exchanged for other Preferred Securities
Certificates upon surrender of the Preferred Securities Certificates to be
exchanged at the office or agency maintained pursuant to Section 5.08. The
Securities Registrar shall not be required to register the transfer of any
Preferred Securities that have been called for redemption or after the
Liquidation Date.
Preferred Securities presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Administrative Trustee and the Securities Registrar
duly executed by the Holder or such Holder's attorney duly authorized in
writing. Each Preferred Securities Certificate surrendered for registration of
transfer or exchange shall be cancelled and subsequently disposed of by the
Property Trustee in accordance with its customary practice.
18
No service charge shall be made for any registration of transfer or
exchange of Preferred Securities, but the Securities Registrar may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Preferred Securities
other than an exchange not involving any transfer.
Section 5.05 Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates. If (a) any mutilated Trust Securities Certificate shall be
surrendered to the Securities Registrar, or if the Securities Registrar shall
receive evidence to its satisfaction of the destruction, loss or theft of any
Trust Securities Certificate, and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustee such security or indemnity as may be
reasonably required by them to hold the Securities Registrar and the Trust
harmless, then in the absence of notice that such Trust Securities Certificate
shall have been acquired by a protected purchaser, the Administrative Trustee,
on behalf of the Trust shall execute and make available for delivery, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Trust
Securities Certificate, a new Trust Securities Certificate of like tenor. In
connection with the issuance of any new Trust Securities Certificate under this
Section, the Administrative Trustee or the Securities Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith. Any duplicate Trust Securities
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an undivided beneficial interest in the assets of the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.
Section 5.06 Persons Deemed Securityholders. Prior to due presentation of
a Trust Security Certificate for registration of transfer, the Administrative
Trustee or the Securities Registrar shall treat the Person in whose name any
Trust Securities Certificate shall be registered in the Securities Register as
the owner and Holder of such Trust Securities Certificate for the purpose of
receiving Distributions and for all other purposes whatsoever, and neither the
Trustees nor the Securities Registrar shall be bound by any notice to the
contrary.
Section 5.07 Access to List of Securityholders' Names and Addresses. In
the event that the Property Trustee is no longer the Securities Registrar, the
Administrative Trustee or the Depositor shall furnish or cause to be furnished
(a) to the Property Trustee, quarterly not later than 10 days prior to a
Distribution Date, a list, in such form as the Property Trustee may reasonably
require, of the names and addresses of the Securityholders as of the most recent
record date and (b) to the Property Trustee, promptly after receipt by the
Administrative Trustee or the Depositor of a request therefor from the Property
Trustee in order to enable the Paying Agent to pay Distributions in accordance
with Section 4.01 hereof), in each case to the extent such information is in the
possession or control of the Administrative Trustee or the Depositor and is not
identical to a previously supplied list or has not otherwise been received by
the Property Trustee. The rights of Securityholders to communicate with other
Securityholders with respect to their rights under this Trust Agreement or under
the Trust Securities, and the corresponding rights of the Property Trustee shall
be as provided in the Trust Indenture Act. Each Holder, by receiving and holding
a Trust Securities Certificate, shall be deemed to have agreed not to hold the
Depositor, the Property Trustee, the Administrative Trustee or the Delaware
Trustee accountable by reason of the disclosure of its name and address,
regardless of the source from which such information was derived.
19
Section 5.08 Maintenance of Office or Agency. The Property Trustee shall
maintain in the Borough of Manhattan, The City of New York, an office or offices
or agency or agencies where Preferred Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Trustees in respect of the Trust Securities Certificates may be served. The
Property Trustee shall give prompt written notice to the Depositor and to the
Securityholders of any change in the location of the Securities Register or any
such office or agency, which shall initially be at the Corporate Trust Office of
the Property Trustee.
Section 5.09 Appointment of Paying Agent. The Paying Agent shall make
Distributions to Securityholders from the Payment Account and shall report the
amounts of such Distributions to the Property Trustee and the Administrative
Trustee. Any Paying Agent shall have the revocable power to withdraw funds from
the Payment Account for the purpose of making Distributions. The Administrative
Trustee may revoke such power and remove the Paying Agent, provided that such
revocation and removal with respect to the sole Paying Agent shall not become
effective until the appointment of a successor. The Paying Agent shall initially
be the Property Trustee, and any co-paying agent chosen by the Property Trustee
and acceptable to the Administrative Trustee and the Depositor. Any Person
acting as Paying Agent shall be permitted to resign as Paying Agent upon 30
days' written notice to the Administrative Trustee and the Depositor, and, if
applicable, the Property Trustee, provided that such resignation with respect to
the sole Paying Agent shall not become effective until the appointment of a
successor. In the event that the Property Trustee shall no longer be the Paying
Agent or a successor Paying Agent shall resign or its authority to act be
revoked, the Administrative Trustee shall appoint a successor that is acceptable
to the Property Trustee (in the case of any other Paying Agent) and the
Depositor to act as Paying Agent (which shall be a bank or trust company and
have a combined capital and surplus of at least $50,000,000). The Administrative
Trustee shall cause such successor Paying Agent or any additional Paying Agent
appointed by the Administrative Trustee to execute and deliver to the Trustees
an instrument in which such successor Paying Agent or additional Paying Agent
shall agree with the Trustees that as Paying Agent, such successor Paying Agent
or additional Paying Agent will hold all sums, if any, held by it for payment to
the Securityholders in trust for the benefit of the Securityholders entitled
thereto until such sums shall be paid to such Securityholders. The Paying Agent
shall return all of such sums remaining unclaimed to the Property Trustee and
upon removal of a Paying Agent such Paying Agent shall also return such sums in
its possession to the Property Trustee. The provisions of Sections 7.01, 7.03
and 7.06 shall apply to the Property Trustee also in its role as Paying Agent,
for so long as the Property Trustee shall act as Paying Agent and, to the extent
applicable, to any other Paying Agent appointed hereunder. Any reference in this
Trust Agreement to the Paying Agent shall include any co-paying agent unless the
context requires otherwise.
Section 5.10 No Transfer of Common Securities by Depositor. To the fullest
extent permitted by law, any attempted transfer of the Common Securities shall
be void. The Administrative Trustee shall cause each Common Securities
Certificate issued to the Depositor to contain a legend stating "THIS
CERTIFICATE, AND THE COMMON SECURITIES REPRESENTED HEREBY, ARE NOT
TRANSFERABLE". By execution of this Trust Agreement, the Depositor agrees to the
foregoing provisions.
20
Section 5.11 Book-Entry Preferred Securities Certificates; Common
Securities Certificate.
(a) The Preferred Securities, upon original issuance on the Closing
Date, will not be engraved but will be issued in the form of one or more printed
or typewritten Book-Entry Preferred Securities Certificates, to be delivered to
The Depository Trust Company, the initial Clearing Agency, or a custodian
thereof, by, or on behalf of, the Trust. Such Book-Entry Preferred Securities
Certificate or Certificates shall initially be registered on the Securities
Register in the name of Cede & Co., the nominee of the initial Clearing Agency.
(b) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
Section 5.12 Definitive Preferred Securities Certificates. If (a) the
Depositor advises the Trustees in writing that the Clearing Agency is no longer
willing or able to properly discharge its responsibilities with respect to the
Preferred Securities Certificates or the Clearing Agency is no longer registered
or in good standing under the Securities Exchange Act of 1934, as amended, or
other applicable statute or regulation, and the Depositor is unable to locate a
qualified successor within 60 calendar days, (b) the Depositor at its option
advises the Trustees in writing that it elects to terminate the book-entry
system through the Clearing Agency or (c) an Event of Default occurs and is
continuing, then the Administrative Trustee shall issue Definitive Preferred
Securities Certificates. Upon surrender to the Administrative Trustee of the
Book-Entry Preferred Securities Certificates by the Clearing Agency, accompanied
by registration instructions, the Administrative Trustee shall execute and
deliver the Definitive Preferred Securities Certificates in accordance with the
instructions of the Clearing Agency. Neither the Securities Registrar nor the
Trustees shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
The Definitive Preferred Securities Certificates shall be printed, lithographed
or engraved or may be produced in any other manner as is reasonably acceptable
to the Administrative Trustee, as evidenced by the execution thereof by the
Administrative Trustee.
Section 5.13 Rights of Securityholders. The Securityholders shall not have
any right or title to the Trust Property other than the undivided beneficial
interest in the assets of the Trust conferred by their Trust Securities and they
shall have no right to call for any partition or division of property, profits
or rights of the Trust except as described below. The Trust Securities shall be
personal property giving only the rights specifically set forth therein and in
this Trust Agreement. The Trust Securities shall have no preemptive or similar
rights and when issued and delivered to Securityholders against payment of the
purchase price therefor will be fully paid and nonassessable by the Trust. The
Holders of the Trust Securities, in their capacities as such, 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.
21
ARTICLE VI
Acts of Securityholders; Meetings; Voting
Section 6.01 Limitations on Voting Rights.
(a) Except as provided herein and in the Indenture and as otherwise
required by law, no Holder of Trust Securities shall have any right to vote or
in any manner otherwise control the administration, operation and management of
the Trust or the obligations of the parties hereto, nor shall anything herein
set forth, or contained in the terms of the Trust Securities Certificates, be
construed so as to constitute the Securityholders from time to time as partners
or members of an association.
(b) The Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee or
executing any trust or power conferred on the Debenture Trustee with respect to
such Debentures, (ii) waive any past default which may be waived under Section
6.04 of the Indenture, (iii) exercise any right to rescind or annul an
acceleration of the principal of all the Debentures or (iv) consent to any
amendment or modification of the Indenture, where such consent shall be
required, without, in each case, obtaining the prior consent of the Holders of a
majority in aggregate Liquidation Amount of all Outstanding Preferred
Securities; provided, however, that where such consent under the Indenture would
require the consent of each holder of Debentures affected thereby, no such
consent shall be given by the Property Trustee without the prior written consent
of the Holder of each Outstanding Preferred Security. The Trustees shall not
revoke any action previously authorized or approved by a vote of the Holders of
Preferred Securities, except by a subsequent vote of the Holders of Preferred
Securities. The Property Trustee shall notify all Holders of the Preferred
Securities of any notice received from the Debenture Trustee as a result of the
Trust being the holder of the Debentures. In addition to obtaining the consent
of the Holders of the Preferred Securities, prior to taking any of the foregoing
actions, the Trustees shall, at the expense of the Depositor, obtain an Opinion
of Counsel experienced in such matters to the effect that the Trust will not be
classified as an association taxable as a corporation or partnership for United
States Federal income tax purposes on account of such action and will continue
to be classified as a grantor trust for United States Federal income tax
purposes.
(c) Subject to Section 10.02(c) hereof, if any proposed amendment to
the Trust Agreement provides for, or the Trustees otherwise propose to effect,
(i) any action that would adversely affect in any material respect the powers,
preferences or special rights of the Preferred Securities, whether by way of
amendment to this Trust Agreement or otherwise, or (ii) the dissolution or
liquidation of the Trust, other than pursuant to the terms of this Trust
Agreement, then the Holders of Outstanding Preferred 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 aggregate
Liquidation Amount of the Outstanding Preferred Securities.
Section 6.02 Notice of Meetings. Notice of all meetings of the Holders of
the Preferred Securities, stating the time, place and purpose of the meeting,
shall be given by the Property Trustee pursuant to Section 10.08 to each
Preferred Securityholder of record, at his/her registered address, at least 15
days and not more than 90 days before the meeting. At any such
22
meeting, any business properly before the meeting may be so considered whether
or not stated in the notice of the meeting. Any adjourned meeting may be held as
adjourned without further notice.
Section 6.03 Meetings of Holders of the Preferred Securities. No annual
meeting of Securityholders is required to be held. The Administrative Trustee,
however, shall call a meeting of Securityholders to vote on any matter upon the
written request of the Holders of at least 25% of the aggregate Liquidation
Amount of the Outstanding Preferred Securities and the Administrative Trustee or
the Property Trustee may, at any time in their discretion, call a meeting of
Holders of the Preferred Securities to vote on any matters as to which the
Holders of the Preferred Securities are entitled to vote.
Holders of a majority of the aggregate Liquidation Amount of the
Outstanding Preferred Securities, present in person or by proxy, shall
constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote of the
Holders of a majority of the aggregate Liquidation Amount of the Outstanding
Preferred Securities present, either in person or by proxy, at such meeting
shall constitute the action of the Securityholders, unless this Trust Agreement
requires a greater number of affirmative votes.
Section 6.04 Voting Rights. A Securityholder shall be entitled to one vote
for each Trust Security in respect of any matter as to which such Securityholder
is entitled to vote.
Section 6.05 Proxies, etc. At any meeting of Securityholders, any
Securityholder entitled to vote thereat may vote by proxy, provided that no
proxy shall be voted at any meeting unless it shall have been placed on file
with the Administrative Trustee, or with such other officer or agent of the
Trust as the Administrative Trustee may direct, for verification prior to the
time at which such vote shall be taken. Pursuant to a resolution of the Property
Trustee, proxies may be solicited in the name of the Property Trustee or one or
more officers of the Property Trustee. Only Securityholders of record shall be
entitled to vote. When Trust Securities are held jointly by several Persons, any
one of them may vote at any meeting in person or by proxy in respect of such
Trust Securities, but if more than one of them shall be present at such meeting
in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in respect
of such Trust Securities. A proxy purporting to be executed by or on behalf of a
Securityholder shall be deemed valid unless challenged at or prior to its
exercise, and the burden of proving invalidity shall rest on the challenger. No
proxy shall be valid more than three years after its date of execution.
Section 6.06 Securityholder Action by Written Consent. Any action which
may be taken by Securityholders at a meeting may be taken without a meeting if
Holders of the proportion of the Outstanding Preferred Securities required to
approve such action shall consent to the action in writing.
Section 6.07 Record Date for Voting and Other Purposes. For the purposes
of determining the Securityholders who are entitled to notice of and to vote at
any meeting or by written consent, or for the purpose of any other action, the
Administrative Trustee may from time
23
to time fix a date, not more than 90 days prior to the date of any meeting of
Securityholders, as a record date for the determination of the identity of the
Securityholders for such purposes.
Section 6.08 Acts of Securityholders. Any request, demand, authorization,
direction, notice, consent, waiver or other action provided or permitted by this
Trust Agreement to be given, made or taken by Securityholders may be embodied in
and evidenced by one or more instruments of substantially similar tenor signed
by such Securityholders in person or by an agent duly appointed in writing; and,
except as otherwise expressly provided herein, such action shall become
effective when such instrument or instruments are delivered to the
Administrative Trustee. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Securityholders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Trust Agreement and (subject to Section 7.02)
conclusive, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him/her the execution thereof. Where
such execution is by a signer acting in a capacity other than his/her individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his/her authority. The fact and date of the execution of any such instrument
or writing, or the authority of the Person executing the same, may also be
proved in any other manner which any Trustee receiving the same deems
sufficient.
The ownership of Preferred Securities shall be proved by the
Securities Register.
Any request, demand, authorization, direction, notice, consent,
waiver or other act of the Securityholder of any Trust Security shall bind every
future Securityholder of the same Trust Security and the Securityholder of every
Trust Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder
to take any action hereunder with regard to any particular Trust Security may do
so with regard to all or any part of the Liquidation Amount of such Trust
Security or by one or more duly appointed agents, each of which may do so
pursuant to such appointment with regard to all or any part of such Liquidation
Amount.
If any dispute shall arise between the Securityholders and the
Administrative Trustee or among such Securityholders or Trustees with respect to
the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder or
Trustee under this Article VI, then the determination of such matter by the
Property Trustee shall be conclusive with respect to such matter.
24
Section 6.09 Inspection of Records. Upon reasonable notice to the
Administrative Trustee and the Property Trustee, the records of the Trust shall
be open to inspection by Securityholders during normal business hours for any
purpose reasonably related to such Securityholder's interest as a
Securityholder.
ARTICLE VII
The Trustees
Section 7.01 Certain Duties and Responsibilities.
(a) The duties and responsibilities of the Trustees shall be as
provided by this Trust Agreement and, in the case of the Property Trustee, also
by the Trust Indenture Act. The Property Trustee, other than during the
occurrence and continuance of an Event of Default, undertakes to perform only
such duties as are specifically set forth in this Trust Agreement and, upon an
Event of Default, must exercise the same degree of care and skill as a prudent
person would exercise or use in the conduct of his/her own affairs. The Trustees
shall have all the privileges, rights and immunities provided by the Delaware
Statutory Trust Act. Notwithstanding the foregoing, no provision of this Trust
Agreement shall require the Trustees to expend or risk their own funds or
otherwise incur any financial liability in the performance of any of their
duties hereunder, or in the exercise of any of their rights or powers, if they
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this Trust
Agreement relating to the conduct or affecting the liability of or affording
protection to the Trustees shall be subject to the provisions of this Section.
Nothing in this Trust Agreement shall be construed to release the Property
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct. To the extent that, at law or in equity,
the Administrative Trustee has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to the Securityholders, the
Administrative Trustee shall not be liable to the Trust or to any Securityholder
for the Administrative Trustee's good faith reliance on the provisions of this
Trust Agreement. The provisions of this Trust Agreement, to the extent that they
restrict the duties and liabilities of the Administrative Trustee otherwise
existing at law or in equity, are agreed by the Depositor and the
Securityholders to replace such other duties and liabilities of the
Administrative Trustee.
(b) All payments made by the Property Trustee or any other Paying
Agent in respect of the Trust Securities shall be made only from the income and
proceeds from the Trust Property. Each Securityholder, by its acceptance of a
Trust Security, agrees that (i) it will look solely to the income and proceeds
from the Trust Property to the extent available for distribution to it as herein
provided and (ii) the Trustees are not personally liable to it for any amount
distributable in respect of any Trust Security or for any other liability in
respect of any Trust Security. This Section 7.01(b) does not limit the liability
of the Trustees expressly set forth elsewhere in this Trust Agreement or, in the
case of the Property Trustee, in the Trust Indenture Act.
Section 7.02 Notice of Defaults; Direct Action by Securityholders. Within
90 days after the occurrence of any Event of Default actually known to a
Responsible Officer of the Property Trustee, the Property Trustee shall
transmit, in the manner and to the extent provided in
25
Section 10.08, notice of such Event of Default to the Securityholders, the
Administrative Trustee and the Depositor, unless such Event of Default shall
have been cured or waived. If the Property Trustee has failed to enforce its
rights under this Trust Agreement or the Indenture to the fullest extent
permitted by law and subject to the terms of this Trust Agreement and the
Indenture, any Securityholder may institute a legal proceeding directly to
enforce the Property Trustee's rights under this Trust Agreement or the
Indenture with respect to Debentures having an aggregate principal amount equal
to the aggregate Liquidation Amount of the Preferred Securities of such
Securityholder without first instituting a legal proceeding against the Property
Trustee or any other Person. To the extent that any action under the Indenture
is entitled to be taken by the holders of at least a specified percentage of the
principal amount of the outstanding Debentures, Holders of at least the same
percentage of the Liquidation Amount of the Outstanding Preferred Securities may
also take such action in the name of the Trust if such action has not been taken
by the Property Trustee. To the fullest extent permitted by law, the foregoing
shall be in addition to and not in limitation of any direct rights provided to
the Holders of the Preferred Securities against the Depositor, as issuer of the
Debentures, under the terms of the Indenture, including the right, without any
notice or other demand on the Property Trustee, to institute suit for the
enforcement of any payment of the principal of and any premium and interest on
Debentures as provided in Section 6.07 of the Indenture.
Section 7.03 Certain Rights of Property Trustee. Subject to the provisions
of Section 7.01:
(a) the Property Trustee may conclusively rely and shall be
protected in acting or refraining from acting in good faith upon any resolution,
Opinion of Counsel, certificate, written representation of a Holder or
transferee, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) if, other than during the occurrence and continuance of an Event
of Default, (i) in performing its duties under this Trust Agreement, the
Property Trustee is required to decide between alternative courses of action or
(ii) in construing any of the provisions in this Trust Agreement, the Property
Trustee finds the same ambiguous or inconsistent with any other provisions
contained herein or (iii) the Property Trustee is unsure of the application of
any provision of this Trust Agreement, then, except as to any matter as to which
the Holders of the Preferred Securities are entitled to vote under the terms of
this Trust Agreement, the Property Trustee shall deliver a notice to the
Depositor requesting written instructions of the Depositor as to the course of
action to be taken. The Property Trustee shall take such action, or refrain from
taking such action, as the Property Trustee shall be instructed in writing to
take, or to refrain from taking, by the Depositor; provided, however, that if
the Property Trustee does not receive such instructions of the Depositor within
ten Business Days after it has delivered such notice, or such reasonably shorter
period of time set forth in such notice (which to the extent practicable shall
not be less than two Business Days), it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Trust Agreement as
it shall deem advisable and in the best interests of the Securityholders, in
which event the Property Trustee shall have no liability except for its own
negligent action, its own negligent failure to act or its own willful
misconduct;
26
(c) the Property Trustee may consult with counsel or other experts
of its selection and the advice or opinion of such counsel or other experts with
respect to legal matters or advice within the scope of such experts' area of
expertise shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(d) the Property Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Trust Agreement at the request
or direction of any of the Securityholders pursuant to this Trust Agreement,
unless such Securityholders shall have offered to the Property Trustee security
or indemnity against the costs, expenses and liabilities reasonably satisfactory
to the Property Trustee which might be incurred by it in compliance with such
request or direction;
(e) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, approval, bond, debenture, note or other evidence of indebtedness or
other paper or document, but the Property Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters as it may see
fit;
(f) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents or attorneys and the Property Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed with due
care by it hereunder;
(g) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the Property
Trustee (unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, conclusively rely upon an Officers'
Certificate;
(h) the Property Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably believed by
it to be authorized or within the discretion or rights or powers conferred upon
it by this Trust Agreement;
(i) the Property Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Responsible Officer of the Property Trustee
has actual knowledge thereof or unless written notice of any event which is in
fact such a default is received by the Property Trustee at the Corporate Trust
Office and such notice references the Trust Securities and this Trust Agreement;
(j) the rights, privileges, protections, immunities and benefits
given to the Property Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Property Trustee
in each of its capacities hereunder, and each agent, custodian and other Person
employed to act hereunder; and
(k) the Property Trustee may request that the Depositor deliver an
Officers' Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant to this
Trust Agreement, which Officers' Certificate
27
may be signed by any person authorized to sign an Officers' Certificate,
including any person specified as so authorized in any such certificate
previously delivered and not superseded.
Section 7.04 Not Responsible for Recitals or Issuance of Securities. The
recitals contained herein and in the Trust Securities Certificates shall be
taken as the statements of the Trust, and the Trustees do not assume any
responsibility for their correctness. The Trustees shall not be accountable for
the use or application by the Depositor of the proceeds of the Debentures.
The Property Trustee makes no representations as to the value or
condition of the property of the Trust or any part thereof. The Property Trustee
makes no representations as to the validity or sufficiency of this Trust
Agreement or the Trust Securities.
Section 7.05 May Hold Securities. Any Trustee or any other agent of any
Trustee or the Trust, in its individual or any other capacity, may become the
owner or pledgee of Trust Securities and, subject to Sections 7.08 and 7.13 and,
except as provided in the definition of the term Outstanding in Article I, may
otherwise deal with the Trust with the same rights it would have if it were not
a Trustee or such other agent.
Section 7.06 Compensation; Indemnity; Fees. The Depositor agrees:
(a) to pay to the Trustees from time to time such compensation as
shall have been agreed in writing with the Depositor for all services rendered
by them hereunder (which compensation shall not be limited by any provision of
law in regard to the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustees in accordance with any provision of this Trust
Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its own negligent action, its own negligent
failure to act or its own wilful misconduct (or, in the case of the
Administrative Trustee, any such expense, disbursement or advance as may be
attributable to his/her gross negligence); and
(c) to indemnify each of the Trustees or any predecessor Trustee
for, and to hold the Trustees harmless against, any and all loss, damage,
claims, liability, penalty or expense including taxes (other than taxes based on
the income of such Trustee) incurred without its own negligent action, its own
negligent failure to act or its wilful misconduct (or, in the case of the
Administrative Trustees, incurred without gross negligence or bad faith),
arising out of or in connection with the acceptance or administration of this
Trust Agreement, including the costs and expenses of defending itself against
any claim (whether by the Depositor, any Holder or any other person) or
liability in connection with the exercise or performance of any of its powers or
duties hereunder.
No Trustee may claim any Lien or charge on any Trust Property as a result
of any amount due pursuant to this Section 7.06.
28
The provisions of this Section 7.06 shall survive the termination of
this Trust Agreement and the resignation or removal of the Trustees.
Section 7.07 Corporate Property Trustee Required; Eligibility of Trustees.
(a) There shall at all times be a Property Trustee hereunder. The
Property Trustee shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000. If any such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of its supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Property Trustee with respect to the Trust Securities shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
(b) There shall at all times be one or more Administrative Trustees
hereunder. Each Administrative Trustee shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
persons authorized to bind that entity.
(c) There shall at all times be a Delaware Trustee. The Delaware
Trustee shall either be (i) a natural person who is at least 21 years of age and
a resident of the State of Delaware or (ii) a legal entity with its principal
place of business in the State of Delaware and that otherwise meets the
requirements of applicable Delaware law that shall act through one or more
persons authorized to bind such entity.
Section 7.08 Conflicting Interests. If the Property Trustee has or shall
acquire a conflicting interest within the meaning of the Trust Indenture Act,
the Property Trustee shall either eliminate such interest or resign, to the
extent and in the manner provided by, and subject to the provisions of, the
Trust Indenture Act and this Trust Agreement.
Section 7.09 Co-Trustees and Separate Trustee. Unless an Event of Default
shall have occurred and be continuing, at any time or times, for the purpose of
meeting the legal requirements of the Trust Indenture Act or of any jurisdiction
in which any part of the Trust Property may at the time be located, the
Depositor and the Administrative Trustee (and if more than one Administrative
Trustee, by agreed action of the majority of such Trustees) shall have power (i)
to appoint, and upon the written request of the Administrative Trustee the
Depositor shall for such purpose join with the Administrative Trustee in the
execution, delivery, and performance of all instruments and agreements necessary
or proper to appoint one or more Persons approved by the Property Trustee either
to act as co-trustee, jointly with the Property Trustee, of all or any part of
such Trust Property, or to the extent required by law to act as separate trustee
of any such property, in either case with such powers as may be provided in the
instrument of appointment, and (ii) to vest in such Person or Persons in the
capacity aforesaid, any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Section. If the Depositor
does not join in such appointment within 15 days after the receipt by it of a
request so to do, or in case a Debenture Event of Default has occurred and is
continuing, the Property Trustee alone shall have power to make such
appointment. Any co-trustee or separate trustee appointed pursuant to this
Section shall either be (i) a natural person
29
who is at least 21 years of age and a resident of the United States or (ii) a
legal entity with its principal place of business in the United States that
shall act through one or more persons authorized to bind such entity.
Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged, and delivered
by the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted
by law, but to such extent only, be appointed subject to the following terms,
namely:
(a) The Trust Securities shall be executed and delivered and
all rights, powers, duties, and obligations hereunder in respect of the custody
of securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustees specified hereunder, shall be exercised,
solely by such Trustees and not by such co-trustee or separate trustee.
(b) The rights, powers, duties, and obligations hereby
conferred or imposed upon the Property Trustee in respect of any property
covered by such appointment shall be conferred or imposed upon and exercised or
performed by the Property Trustee or by the Property Trustee and such co-trustee
or separate trustee jointly, as shall be provided in the instrument appointing
such co-trustee or separate trustee, except to the extent that under any law of
any jurisdiction in which any particular act is to be performed, the Property
Trustee shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised and performed by
such co-trustee or separate trustee.
(c) The Property Trustee at any time, by an instrument in
writing executed by it, with the written concurrence of the Depositor, may
accept the resignation of or remove any co-trustee or separate trustee appointed
under this Section, and, in case an Event of Default under the Indenture has
occurred and is continuing, the Property Trustee shall have power to accept the
resignation of, or remove, any such co-trustee or separate trustee without the
concurrence of the Depositor. Upon the written request of the Property Trustee,
the Depositor shall join with the Property Trustee in the execution, delivery,
and performance of all instruments and agreements necessary or proper to
effectuate such resignation or removal. A successor to any co-trustee or
separate trustee so resigned or removed may be appointed in the manner provided
in this Section.
(d) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Property Trustee, or
any other trustee hereunder.
(e) The Property Trustee shall not be liable by reason of any
act of a co-trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall
be deemed to have been delivered to each such co-trustee and separate trustee.
30
Section 7.10 Resignation and Removal; Appointment of Successor. No
resignation or removal of any Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 7.11.
Subject to the immediately preceding paragraph, any Trustee may
resign at any time with respect to the Trust Securities by giving written notice
thereof to the Securityholders.
Unless an Event of Default shall have occurred and be continuing,
any Trustee may be removed at any time by Act of the Holder of the Common
Securities. If an Event of Default shall have occurred and be continuing, the
Property Trustee or the Delaware Trustee, or both of them, may be removed at
such time only by Act of the Holders of a majority in Liquidation Amount of the
Outstanding Preferred Securities, delivered to such Trustee (in its individual
capacity and on behalf of the Trust). The Administrative Trustee may be removed
at any time by the Holder of Common Securities only.
If the instrument of acceptance by the successor Trustee required by
Section 7.11 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation or removal, the Trustee may petition,
at the expense of the Depositor, any court of competent jurisdiction for the
appointment of a successor Trustee.
If any Trustee shall resign, be removed or become incapable of
acting as Trustee, or if a vacancy shall occur in the office of any Trustee for
any cause, at a time when no Event of Default shall have occurred and be
continuing, the Holder of Common Securities, by Act of the Holder of Common
Securities delivered to the retiring Trustee, shall promptly appoint a successor
Trustee or Trustees and the Trust, and the retiring Trustee shall comply with
the applicable requirements of Section 7.11. If the Property Trustee or the
Delaware Trustee shall resign, be removed or become incapable of continuing to
act as the Property Trustee or the Delaware Trustee, as the case may be, at a
time when an Event of Default has occurred and is continuing, the Holders of
Preferred Securities, by Act of the Securityholders of a majority in Liquidation
Amount of the Outstanding Preferred Securities delivered to the retiring
Trustee, shall promptly appoint a successor Trustee or Trustees, and such
successor Trustee shall comply with the applicable requirements of Section 7.11.
If any Administrative Trustee shall resign, be removed or become incapable of
acting as Administrative Trustee at a time when an Event of Default shall have
occurred and be continuing, the Holder of Common Securities shall appoint a
successor Administrative Trustee. If no successor Trustee shall have been so
appointed by the Holder of Common Securities or the Holders of Preferred
Securities and accepted appointment in the manner required by Section 7.11, any
Securityholder who has been a Securityholder of Trust Securities for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee.
The Property Trustee shall give notice of each resignation and each
removal of a Trustee and each appointment of a successor Trustee to all
Securityholders in the manner provided in Section 10.08 and shall give notice to
the Depositor. Each notice shall include the name of the successor Trustee and
the address of its Corporate Trust Office if it is the Property Trustee.
31
Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or Delaware Trustee who is a
natural person dies or becomes, in the opinion of the Depositor, incompetent or
incapacitated, the vacancy created by such death, incompetence or incapacity may
be filled by (a) the unanimous act of the remaining Administrative Trustees if
there are at least two of them or (b) otherwise by the Depositor (with the
successor in each case being a Person who satisfies the eligibility requirements
for Administrative Trustee or for the Delaware Trustee, as the case may be, set
forth in Section 7.07).
Section 7.11 Acceptance of Appointment by Successor. In case of the
appointment hereunder of a successor Trustee, the retiring Trustee and each
successor Trustee shall execute and deliver to the Trust and the retiring
Trustee an amendment hereto wherein each successor 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 Trustee all
the rights, powers, trusts and duties of the retiring Trustee and (b) shall add
to or change any of the provisions of this Trust Agreement as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such amendment
shall constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee and upon
the execution and delivery of such amendment the resignation or removal of the
retiring Trustee shall become effective to the extent provided therein and each
such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Trustee and the Trust; but, on request of the Trust or any successor Trustee,
such retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all Trust Property, all proceeds thereof and money held by such retiring
Trustee hereunder.
Upon request of any such successor Trustee, the Trust shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in the
first or second preceding paragraph, as the case may be.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
Section 7.12 Merger, Conversion, Consolidation or Succession to Business.
Any Person into which any of the Trustees may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which such Trustee shall be a party, or any
Person succeeding to all or substantially all the corporate trust business of
such Trustee, shall be the successor of such Trustee hereunder, provided such
Person shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.
Section 7.13 Preferential Collection of Claims Against Depositor or Trust.
If and when the Property Trustee or the Delaware Trustee shall be or become a
creditor (whether directly or indirectly, secured or unsecured) of the Depositor
or the Trust (or any other obligor upon the Debentures or the Trust Securities),
including under the terms of Section 7.05 hereof,
32
the Property Trustee or the Delaware Trustee, as the case may be, shall be
subject to and shall take all actions necessary in order to comply with the
provisions of the Trust Indenture Act regarding the collection of claims against
the Depositor or Trust (or any such other obligor).
Section 7.14 Reports by Property Trustee. The Property Trustee shall
transmit to Holders such reports concerning the Property Trustee and its actions
under this Trust Agreement as may be required pursuant to the Trust Indenture
Act at the times and in the manner provided pursuant thereto. If required by
Section 313(a) of the Trust Indenture Act, the Property Trustee shall, within 60
days after each May 31 following the date of this Trust Agreement deliver to
Holders a brief report, dated as of such May 31, which complies with the
provisions of such Section 313(a).
A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Property Trustee with each stock exchange upon which
any Preferred Securities are then listed, with the Commission and with the
Trust. The Trust will promptly notify the Property Trustee when any Preferred
Securities are listed on any stock exchange.
Section 7.15 Reports to the Property Trustee. The Depositor and the
Administrative Trustee on behalf of the Trust shall provide to the Property
Trustee such documents, reports and information as required by Section 314 of
the Trust Indenture Act (if any) and the compliance certificate required by
Section 314(a) of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
Delivery of such reports, information and documents to the Property
Trustee is for informational purposes only and the Property Trustee's receipt of
such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Company's compliance with any of its covenants hereunder (as to which the
Property Trustee is entitled to conclusively rely exclusively on Officers'
Certificates).
Section 7.16 Evidence of Compliance with Conditions Precedent. The
Depositor and the Administrative Trustee on behalf of the Trust shall provide to
the Property Trustee evidence of compliance with the conditions precedent, if
any, provided for in this Trust Agreement that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act.
Section 7.17 Statements Required in Officers' Certificate and Opinion of
Counsel.
Each Officers' Certificate and Opinion of Counsel with respect to
compliance with a covenant or condition provided for in this Trust Agreement
shall include:
(1) a statement that each Person making such Officers' Certificate
or Opinion of Counsel has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
Officers' Certificate or Opinion of Counsel are based;
33
(3) a statement that, in the opinion of each such Person, such
Person has made such examination or investigation as is necessary to enable such
Person to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement that, in the opinion of such Person, such covenant
or condition has been complied with; provided, however, that with respect to
matters of fact not involving any legal conclusion, an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
Section 7.18 Number of Trustees.
(a) The number of Trustees shall be three, provided that the Holder
of all of the Common Securities by written instrument may increase the number of
Administrative Trustees to more than one and, if so increased, may decrease the
number of Administrative Trustees. During any period in which the number of
Administrative Trustees is more than one, the Administrative Trustees shall act
by majority vote.
(b) If a Trustee ceases to hold office for any reason and, with
respect to the Administrative Trustee, the number of Administrative Trustees is
not reduced as permitted by Section 7.18(a), or if the number of Administrative
Trustees is increased pursuant to Section 7.18(a), a vacancy shall occur. The
vacancy shall be filled with a Trustee appointed in accordance with Section
7.10.
(c) The death, dissolution, termination, resignation, retirement,
removal, bankruptcy, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul, dissolve or terminate the Trust. Whenever a
vacancy shall occur, until such vacancy is filled by the appointment of an
Administrative Trustee in accordance with Section 7.10, the Administrative
Trustees in office, regardless of their number (and notwithstanding any other
provision of this Trust Agreement), shall have all the powers granted to the
Administrative Trustee and shall discharge all the duties imposed upon the
Administrative Trustees by this Trust Agreement.
Section 7.19 Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any natural person over the age of 21 his/her
power for the purpose of executing any documents contemplated in Section
2.07(a), including any registration statement or amendment thereto filed with
the Commission, or making any other governmental filing; and
(b) the Administrative Trustees shall have power to delegate from
time to time to such of their number, if there is more than one Administrative
Trustee, or to the Depositor the doing of such things and the execution of such
instruments either in the name of the Trust or the names of the Administrative
Trustees or otherwise as the Administrative Trustees may deem expedient, to the
extent such delegation is not prohibited by applicable law or contrary to the
provisions of the Trust, as set forth herein.
34
Section 7.20 Voting. Except as otherwise provided in this Trust Agreement,
the consent or vote of the Trustees shall be approved by the Administrative
Trustee or, if more than one, by a majority of the Administrative Trustees.
ARTICLE VIII
Dissolution and Liquidation
Section 8.01 Dissolution Upon Expiration Date. Unless earlier dissolved,
the Trust shall automatically dissolve on December 31, 2034 (the "Expiration
Date").
Section 8.02 Early Termination. The earliest to occur of any of the
following events is an "Early Termination Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Depositor or an acceleration of the maturity
of the Debentures pursuant to Section 6.02 of the Indenture;
(b) upon the election of the Depositor to dissolve the Trust
and cause the distribution of a Like Amount of Debentures to the Holders of the
Trust Securities in accordance with their terms;
(c) the redemption of all of the Trust Securities; and
(d) an order for dissolution of the Trust shall have been
entered by a court of competent jurisdiction.
The election of the Depositor pursuant to Section 8.02(b) shall be made by
the Depositor giving written notice to the Trustees not less than 30 days prior
to the date of distribution of the Debentures. Such notice shall specify the
date of distribution of the Debentures and shall be accompanied by an Opinion of
Counsel that such event will not be a taxable event to the Holders of the Trust
Securities for Federal income tax purposes.
Section 8.03 Termination. The respective obligations and responsibilities
of the Trustees and the Trust shall terminate upon the latest to occur of the
following: (a) the distribution by the Property Trustee to Securityholders upon
the winding up of the Trust pursuant to Section 8.04 of all amounts required to
be distributed hereunder upon the final payment of the Trust Securities; (b) the
payment of any expenses owed by the Trust; and (c) the discharge of all
administrative duties of the Administrative Trustee, including the performance
of any tax reporting obligations with respect to the Trust or the
Securityholders and the filing of the Certificate of Cancellation with the
Secretary of State of the State of Delaware.
Section 8.04 Winding Up.
(a) If an Early Termination Event specified in clause (a) or (d) of
Section 8.02 occurs or upon the Expiration Date, the Trust shall be wound up by
the Trustees as expeditiously as the Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to each Securityholder a Like Amount of Debentures,
subject to Section 8.04(d). If an Early Termination Event specified in
35
clause (b) occurs, the Trust shall be liquidated by the Trustee on the date of
distribution of the Debentures specified by the Depositor in its notice
delivered pursuant to Section 8.02. Notice of liquidation shall be given by the
Property Trustee by first-class mail, postage prepaid, mailed not later than 30
nor more than 60 days prior to the Liquidation Date to each Holder of Trust
Securities at such Holder's address appearing in the Securities Register. All
notices of liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be Outstanding and any Trust Securities
Certificates not surrendered for exchange will be deemed to represent a Like
Amount of Debentures; and
(iii) provide such information with respect to the mechanics
by which Holders may exchange Trust Securities Certificates for certificates
evidencing Debentures, or, if Section 8.04(d) applies, receive a Liquidation
Distribution, as the Administrative Trustee or the Property Trustee shall deem
appropriate.
(b) In order to effect the winding up of the Trust and distribution
of the Debentures to Securityholders, the Property Trustee, either itself acting
as exchange agent or through the appointment of a separate exchange agent, shall
establish such procedures as it shall deem appropriate to effect the
distribution of Debentures in exchange for the Outstanding Trust Securities
Certificates.
(c) Except where Section 8.02(c) applies, on or after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates representing a Like Amount of Debentures will be
issued to Holders of Trust Securities Certificates, upon surrender of such
certificates to the Administrative Trustee or its agent for exchange, (iii) the
Depositor shall use its best efforts to have the Debentures listed on the New
York Stock Exchange or such other exchange as the Preferred Securities are then
listed and shall take any reasonable action necessary to effect the distribution
of the Debentures, (iv) any Trust Securities Certificates not so surrendered for
exchange will be deemed to represent a Like Amount of Debentures, accruing
interest at the rate then borne by the Debentures from the last Distribution
Date on which a Distribution was made on such Trust Certificates until such
certificates are so surrendered (and until such certificates are so surrendered,
no payments or interest or principal will be made to Holders of Trust Securities
Certificates with respect to such Debentures) and (v) all rights of
Securityholders holding Trust Securities will cease, except the right of such
Securityholders to receive Debentures upon surrender of Trust Securities
Certificates.
(d) In the event that, notwithstanding the other provisions of this
Section 8.04, whether because of an order for dissolution entered by a court of
competent jurisdiction or otherwise, distribution of the Debentures in the
manner provided herein is determined by the Property Trustee not to be
practical, the Trust Property shall be liquidated, and the Trust shall be
terminated, by the Property Trustee in such manner as the Property Trustee
determines. In such event, Securityholders will be entitled to receive out of
the assets of the Trust available for distribution to Securityholders, after
satisfaction of liabilities to creditors of
36
the Trust as provided by applicable law, an amount equal to the Liquidation
Amount per Trust Security plus accumulated and unpaid Distributions thereon to
the date of payment (such amount being the "Liquidation Distribution"). If, upon
any such dissolution, the Liquidation Distribution can be paid only in part
because the Trust has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then, subject to the next succeeding sentence, the
amounts payable by the Trust on the Trust Securities shall be paid on a pro rata
basis (based upon Liquidation Amounts). The Holder of the Common Securities will
be entitled to receive Liquidation Distributions upon any such dissolution pro
rata (determined as aforesaid) with Holders of Preferred Securities, except
that, if a Debenture Event of Default has occurred and is continuing, the
Preferred Securities shall have a priority over the Common Securities, and no
Liquidation Distribution will be paid to the Holders of the Common Securities
unless and until receipt by all Holders of the Preferred Securities of the
entire Liquidation Distribution payable in respect thereof.
ARTICLE IX
Mergers, Etc.
Section 9.01 Mergers, Consolidations, Amalgamations or Replacements of the
Trust. The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any corporation or other entity,
except as described below. The Trust may, at the request of the Depositor, with
the consent of the Administrative Trustee and without the consent of the Holders
of the Trust Securities, merge with or into, consolidate, amalgamate, or be
replaced by, a trust organized as such under the laws of any State; provided,
that (i) such successor entity either (a) expressly assumes all of the
obligations of the Trust with respect to the Trust Securities or (b) substitutes
for the Trust Securities other securities having substantially the same terms as
the Trust Securities (the "Successor Securities") so long as the Successor
Securities rank the same as the Trust Securities rank with respect to the
payment of Distributions and payments upon liquidation, redemption and
otherwise, (ii) the Depositor expressly appoints a trustee of such successor
entity possessing the same powers and duties as the Property Trustee as the
holder of the Debentures, (iii) the Successor Securities are listed, or any
Successor Securities will be listed upon notification of issuance, on any
national securities exchange or other organization on which the Trust Securities
are then listed or quoted, (iv) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the Preferred
Securities (including any Successor Securities) to be downgraded, placed under
surveillance or review or withdrawn by any nationally recognized statistical
rating organization, (v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the Holders of the Trust Securities (including any Successor
Securities) in any material respect, (vi) such successor entity has a purpose
substantially similar to that of the Trust, (vii) prior to such merger,
consolidation, amalgamation, replacement, transfer or lease, the Depositor and
the Property Trustee have received an Opinion of Counsel to the effect that (a)
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights, preferences and privileges of the
Holders of the Trust Securities (including any Successor Securities) in any
material respect, and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor such successor
entity will be required to register as an investment company under the 1940 Act
and the Trust (or the successor entity) will continue to be classified as a
grantor
37
trust for United States federal income tax purposes and (viii) the Depositor or
any permitted successor assignee owns all of the common securities of such
successor entity and guarantees the obligations of such successor entity under
the Successor Securities at least to the extent provided by the Guarantee and
this Trust Agreement. Notwithstanding the foregoing, the Trust shall not, except
with the consent of all Holders of the Trust Securities, merge with or into,
consolidate, amalgamate, or be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to, any other entity or
permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, conversion, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Trust or the successor entity not
to be classified as a grantor trust for United States Federal income tax
purposes or would cause each Holder of Trust Securities not to be treated as
owning an undivided beneficial ownership interest in the Debentures.
ARTICLE X
Miscellaneous Provisions
Section 10.01 Limitation of Rights of Securityholders. The death,
dissolution or incapacity of any Person having an interest, beneficial or
otherwise, in Trust Securities shall not operate to terminate this Trust
Agreement, nor entitle the legal representatives or heirs of such Person or any
Securityholder for such Person, to claim an accounting, take any action or bring
any proceeding in any court for a partition or winding-up of the arrangements
contemplated hereby, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
Section 10.02 Amendment.
(a) This Trust Agreement may be amended from time to time by the
Trustees and the Depositor, without the consent of any Securityholders, to cure
any ambiguity, defect or inconsistency or make any other change which does not
adversely affect in any material respect the interests of any Holder of
Preferred Securities; provided that any amendment described in this Section
10.02(a) made solely to conform this Trust Agreement to the final prospectus
provided to investors in connection with the initial offering of the Preferred
Securities will not be deemed to adversely affect in any material respect the
interests of the Holders. Notice of any amendments of this Trust Agreement
pursuant to Section 10.02(a) shall be given to the Securityholders.
(b) Except as provided in Section 10.02(a) and 10.02(c) hereof, any
provision of this Trust Agreement may be amended by the Trustees and the
Depositor with the consent of Holders of a majority of the aggregate Liquidation
Amount of the Outstanding Preferred Securities.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement other than the proviso of the first sentence of Section
10.02(a), without the consent of each affected Securityholder (such consent
being obtained in accordance with Section 6.03 or 6.06 hereof), this Trust
Agreement may not be amended to (i) change the amount, timing or currency of any
Distribution or Liquidation Distribution on the Trust Securities or otherwise
adversely affect the method of payment of any Distribution or Liquidation
Distribution required
38
to be made in respect of the Trust Securities as of a specified date; (ii)
change the redemption provisions of the Trust Securities; (iii) restrict the
right of a Securityholder to institute suit for the enforcement of any such
payment contemplated in (i) or (ii) above on or after the related date; (iv)
modify the first sentence of Section 2.06 hereof; (v) authorize or issue any
beneficial interest in the Trust other than as contemplated by this Trust
Agreement as of the date hereof; (vi) change the conditions precedent for the
Depositor to elect to dissolve the Trust and distribute the Debentures to
Holders of Preferred Securities as set forth in Section 8.02; or (vii) affect
the limited liability of any Holder of Preferred Securities, and,
notwithstanding any other provision herein, without the unanimous consent of the
Securityholders (such consent being obtained in accordance with Section 6.03 or
6.06 hereof), paragraphs (b) and (c) of this Section 10.02 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
amendment to this Trust Agreement shall be made without receipt by the Trust of
an Opinion of Counsel experienced in such matters to the effect that such
amendment will not affect the Trust's status as a grantor trust for United
States Federal income tax purposes or its exemption from regulation as an
"investment company" under the 1940 Act.
(e) Notwithstanding anything in this Trust Agreement to the
contrary, without the consent of the Depositor, other than in accordance with
the proviso in the first sentence of Section 10.02(a), this Trust Agreement may
not be amended in a manner which imposes any additional obligation on the
Depositor.
(f) In the event that any amendment to this Trust Agreement is made,
the Administrative Trustee shall promptly provide to the Depositor a copy of
such amendment.
(g) In executing any amendment to the Trust Agreement, the Property
Trustee shall be entitled to receive, and (subject to Section 8.01) shall be
fully protected in relying upon, an Opinion of Counsel stating that the
execution of such amendment is authorized or permitted by this Trust Agreement.
Except as contemplated by Section 7.11, the Trustee may, but shall not be
obligated to, enter into any amendment to this Trust Agreement which affects the
Trustee's own rights, duties or immunities under this Trust Agreement or
otherwise.
Section 10.03 Severability. In case any provision in this Trust
Agreement or in the Trust Securities Certificates shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 10.04 Governing Law. THIS TRUST AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF EACH OF THE SECURITYHOLDERS, THE TRUST, THE DEPOSITOR AND THE
TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
Section 10.05 Payments Due on Non-Business Day. Except as otherwise
provided with respect to the Debentures of a particular series, if the date
fixed for any payment on any Trust Security shall be a day which is not a
Business Day, then such payment need not be made
39
on such date but may be made on the next succeeding day which is a Business Day,
with the same force and effect as though made on the date fixed for such
payment, and no interest shall accumulate thereon for the period after such date
to the date of payment on such succeeding day, except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day.
Section 10.06 Successors and Assigns. This Trust Agreement shall be
binding upon and shall inure to the benefit of any successor to the Trust or
successor Trustee or both, including any successor by operation of law. Except
in connection with a consolidation, merger or sale involving the Depositor that
is permitted under Article V of the Indenture and pursuant to which the assignee
agrees in writing to perform the Depositor's obligations hereunder, the
Depositor shall not assign its obligations hereunder.
Section 10.07 Headings. The Article and Section headings are for
convenience only and shall not affect the construction of this Trust Agreement.
Section 10.08 Reports, Notices and Demands. Any report, notice, demand or
other communication which by any provision of this Trust Agreement is required
or permitted to be given or served to or upon any Securityholder or the
Depositor may be given or served in writing by deposit thereof, first-class
postage prepaid in the United States mail, hand delivery or facsimile
transmission, in each case, addressed, (a) in the case of a Holder of a
Preferred Security, to such Holder of a Preferred Security as such
Securityholder's name and address may appear on the Securities Register; and (b)
in the case of the Holder of a Common Security or the Depositor, to Public
Service Enterprise Group Incorporated, 80 Park Plaza, Newark, New Jersey 07101,
Attention: Treasurer, facsimile no.: 973-242-1651. Such notice, demand or other
communication to or upon a Securityholder shall be deemed to have been
sufficiently given or made, for all purposes, upon hand delivery, mailing or
transmission.
Any notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
the Property Trustee, the Delaware Trustee or the Administrative Trustee shall
be given in writing addressed (until another address is published by the Trust)
as follows: (a) with respect to the Property Trustee, to Wachovia Bank, National
Association, 21 South Street, Morristown, New Jersey 07960, Attention: Corporate
Trust Administration; (b) with respect to the Delaware Trustee, to Wachovia
Trust Company, National Association, One Rodney Square, 920 King Street, Suite
102, Wilmington, Delaware 19801; and (c) with respect to the Administrative
Trustee, to the address above for notices to the Depositor, marked "Attention:
Administrative Trustee of PSEG Funding Trust II c/o Treasurer." Such notice,
demand or other communication to or upon the Property Trustee or the Delaware
Trustee shall be deemed to have been sufficiently given or made only upon actual
receipt of the writing by the Property Trustee or the Delaware Trustee.
Section 10.09 Agreement Not to Petition. Each of the Trustees and the
Depositor agree for the benefit of the Securityholders that, until at least one
year and one day after the Trust has been terminated in accordance with Article
VIII, they shall not file, or join in the filing of, a petition against the
Trust under any Bankruptcy Laws or otherwise join in the commencement of any
proceeding against the Trust under any Bankruptcy Law. In the event the
Depositor or any of the Trustees takes action in violation of this Section
10.09, the Property Trustee agrees, for the
40
benefit of Securityholders, that at the expense of the Depositor, it shall file
an answer with the bankruptcy court or otherwise properly contest the filing of
such petition by the Depositor or any of the Trustees, as applicable, against
the Trust or the commencement of such action and raise the defense that the
Depositor and each of the Trustees has agreed in writing not to take such action
and should be stopped and precluded therefrom and such other defenses, if any,
as counsel for the Property Trustee or the Trust may assert. The provisions of
this Section 10.09 shall survive the termination of this Trust Agreement.
Section 10.10 Trust Indenture Act; Conflict with Trust Indenture Act.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall, to
the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a
trustee for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in this Trust
Agreement by any of the provisions of the Trust Indenture Act, such required
provision shall control. If any provision of this Trust Agreement modifies or
excludes any provision of the Trust Indenture Act which may be so modified or
excluded, the latter provision shall be deemed to apply to this Trust Agreement
as so modified or excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust
Agreement shall not affect the nature of the Trust Securities as equity
securities representing undivided beneficial interests in the assets of the
Trust.
Section 10.11 Characterization. The Depositor, the Trust, and the Holders
of the Trust Securities agree, for United States federal income tax purposes, to
treat the Debentures as indebtedness of the Depositor and to treat the Trust
Securities as evidence of a beneficial ownership interest in the Debentures
through a grantor trust.
Section 10.12 Acceptance of Terms of Trust Agreement, Guarantee and
Indenture. THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST
THEREIN BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND
AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND
THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH
SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST
AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND
SUCH SECURITYHOLDER AND SUCH OTHERS.
41
IN WITNESS WHEREOF, the undersigned, being duly authorized, have
caused this agreement to be executed as of the day and year first above written.
PUBLIC SERVICE ENTERPRISE GROUP
INCORPORATED, as Depositor
By:____________________________________
Name:
Title:
WACHOVIA BANK, NATIONAL
ASSOCIATION, as Property Trustee
By:____________________________________
Name:
Title:
WACHOVIA TRUST COMPANY, NATIONAL
ASSOCIATION, as Delaware Trustee
By:____________________________________
Name:
Title:
By:___________________________________,
as Administrative Trustee
Name: Mark G. Kahrer
42
EXHIBIT A
CERTIFICATE OF
TRUST OF
PSEG FUNDING TRUST II
THIS CERTIFICATE OF TRUST of PSEG Funding Trust II (the "Trust"),
dated July 31, 2002, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. ss. 3801 et seq.) (the "Act").
Name. The name of the business trust being formed hereby is
PSEG Funding Trust II.
Delaware Trustee. The name and business address of the trustee
of the Trust in the State of Delaware are Wachovia Trust Company, National
Association, One Rodney Square, 920 King Street, Suite 102, Wilmington, Delaware
19801.
Counterparts. This Certificate of Trust may be executed in one
or more counterparts, all of which together shall constitute one and the same
instrument.
Effective Date. This Certificate of Trust shall be effective
as of its filing with the Secretary of State of Delaware.
IN WITNESS WHEREOF, the undersigned, being the trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written in accordance with Section 3811(a) of the Act.
WACHOVIA TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee
By: /s/ Sterling C.Correia
-------------------------------------
Name: STERLING C. CORREIA
Title: Vice President
MARK G. KAHRER, as Trustee
/s/ Mark G. Kahrer
----------------------------------------
A-1
EXHIBIT B
THIS CERTIFICATE,
AND THE COMMON SECURITIES REPRESENTED HEREBY,
ARE NOT TRANSFERABLE
Certificate Number: R-1
Number of Common Securities: 222,681
Certificate Evidencing Common Securities
of
PSEG Funding Trust II
222,681 Common Securities
(liquidation amount $25 per Common Security)
PSEG Funding Trust II, a statutory trust created under the laws of
the State of Delaware (the "Trust"), hereby certifies that Public Service
Enterprise Group Incorporated (the "Holder") is the registered holder of TWO
HUNDRED TWENTY TWO THOUSAND SIX HUNDRED EIGHTY ONE (222,681) common securities
of the Trust representing undivided beneficial interests in the assets of the
Trust and designated as the PSEG Funding Trust II 8.75% Common Securities
(liquidation amount $25 per Common Security) (the "Common Securities"). In
accordance with Section 5.10 of the Trust Agreement (as defined below), this
certificate is, and the Common Securities are, not transferable and any
attempted transfer hereof shall be void. The designations, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities are set forth in, and this certificate and the Common Securities
represented hereby are issued and shall in all respects be subject to the terms
and provisions of, the Amended and Restated Trust Agreement of the Trust dated
as of December 17, 2002, as the same may be amended from time to time (the
"Trust Agreement"). The Holder is entitled to the benefits of the Common
Securities Guarantee Agreement dated as of December 17, 2002, as the same may be
amended from time to time (the "Guarantee"). The Trust will furnish a copy of
the Trust Agreement and the Guarantee to the Holder without charge upon written
request to the Trust at its principal place of business or registered office.
The Trust and the Holder of the Common Securities agree, for United
States federal income tax purposes, to treat the Holder's 8.75% Deferrable
Interest Junior Subordinated Debentures, Series D (the "Debentures"), as
indebtedness of the Holder of the Common Securities and to treat the Common
Securities as evidence of a beneficial ownership interest in the Debentures
through a grantor trust.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
B-1
This Certificate shall be governed by and construed in accordance
with the laws of the State of Delaware without regard to the conflict of laws
principles thereof.
B-2
IN WITNESS WHEREOF, the Administrative Trustee of the Trust has
executed this certificate this 17th day of December, 2002.
PSEG FUNDING TRUST II
By:_____________________________________
Name: Mark G. Kahrer
Title: Administrative Trustee
B-3
EXHIBIT C
[To be included in Book-Entry Preferred Securities Certificate -
This Preferred Security is a Book-Entry Preferred Securities Certificate within
the meaning of the Trust Agreement hereinafter referred to and is registered in
the name of The Depository Trust Company (the "Depository") or a nominee of the
Depository. This Preferred Security is exchangeable for Preferred Securities
registered in the name of a person or entity other than the Depository or its
nominee only in the limited circumstances described in the Trust Agreement and
no transfer of this Preferred Security (other than a transfer of this Preferred
Security as a whole by the Depository to a nominee of the Depository or by a
nominee of the Depository to the Depository or another nominee of the
Depository) may be registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized representative of
The Depository Trust Company, a New York corporation (55 Water Street, New
York), to PSEG Funding Trust II or its agent for registration of transfer,
exchange or payment, and any Preferred Security issued is registered in the name
of Cede & Co. or such other name as requested by an authorized representative of
The Depository Trust Company and any payment hereon is made to Cede & Co. or to
such other entity as is requested by an authorized representative of The
Depository Trust Company, ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede
& Co., has an interest herein.]
Certificate Number: R-1
Number of Preferred Securities: 7,200,000
Cusip No.: 69361X 20 4
C-1
Certificate Evidencing Preferred Securities
of
PSEG Funding Trust II
7,200,000 Preferred Securities
(liquidation amount $25 per Preferred Security)
PSEG Funding Trust II, a statutory trust created under the laws of
the State of Delaware (the "Trust"), hereby certifies that Cede & Co. (the
"Holder") is the registered holder of SEVEN MILLION TWO HUNDRED THOUSAND
(7,200,000) preferred securities of the Trust representing undivided beneficial
interests in the assets of the Trust and designated the PSEG Funding Trust II
8.75% Preferred Securities (liquidation amount $25 per Preferred Security) (the
"Preferred Securities"). The Preferred Securities are transferable on the books
and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer as
provided in Section 5.04 of the Trust Agreement (as defined below). The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities are set forth in, and this certificate
and the Preferred Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust dated as of December 17, 2002, as the same may be
amended from time to time (the "Trust Agreement"). The Holder is entitled to the
benefits of the Guarantee Agreement entered into by Public Service Enterprise
Group Incorporated, a New Jersey corporation, and Wachovia Bank, National
Association as guarantee trustee, dated as of December 17, 2002 (the
"Guarantee") to the extent provided therein, together with the obligations of
Public Service Enterprise Group Incorporated under the Trust Agreement, its
Deferrable Interest Junior Subordinated Debentures, Series D and the Indenture
related to such Deferrable Interest Junior Subordinated Debentures, Series D.
The Trust will furnish a copy of the Trust Agreement and the Guarantee to the
Holder without charge upon written request to the Trust at its principal place
of business or registered office.
The Trust agrees, and by acceptance of a beneficial ownership
interest in the Preferred Securities, each beneficial owner of the Preferred
Securities will be deemed to have agreed, to treat, for United States federal
income tax purposes, the 8.75% Deferrable Interest Junior Subordinated
Debentures, Series D of Public Service Enterprise Group Incorporated as
indebtedness of Public Service Enterprise Group Incorporated and to treat the
Preferred Securities as evidence of a beneficial ownership interest in such
8.75% Deferrable Interest Junior Subordinated Debentures, Series D through a
grantor trust.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
This Certificate shall be governed by and construed in accordance
with the laws of the State of Delaware without regard to the conflict of laws
principles thereof.
C-2
IN WITNESS WHEREOF, the Administrative Trustee of the Trust has
executed this certificate this 17th day of December, 2002.
PSEG FUNDING TRUST II
By:_____________________________________
Name: Mark G. Kahrer
Title: Administrative Trustee
C-3
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers to: (Insert assignee's
social security or tax identification number) (Insert address and zip code of
assignee)
__________ Preferred Securities represented by this Preferred Securities
Certificate and irrevocably appoints
agent to transfer said Preferred Securities 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 Preferred Security
Certificate)
C-4