1
AMENDED AND RESTATED TRUST AGREEMENT
HERCULES TRUST III
Dated as of _________, ____
2
TABLE OF CONTENTS
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions. .............................................. 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application. ......................... 9
SECTION 2.2 Lists of Holders of Securities. ........................... 9
SECTION 2.3 Reports by the Property Trustee. .......................... 10
SECTION 2.4 Periodic Reports to Property Trustee. ..................... 10
SECTION 2.5 Evidence of Compliance with Condition Precedent ........... 10.
SECTION 2.6 Events of Default; Waiver. ................................ 10
SECTION 2.7 Event of Default; Notice. ................................. 12
ARTICLE III
ORGANIZATION
SECTION 3.1 Name. ..................................................... 13
SECTION 3.2 Office. ................................................... 13
SECTION 3.3 Purpose. .................................................. 13
SECTION 3.4 Authority. ................................................ 13
SECTION 3.5 Title to Property of the Trust. ........................... 13
SECTION 3.6 Powers and Duties of the Administrative Trustees. ......... 14
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees. ..... 16
SECTION 3.8 Powers and Duties of the Property Trustee ................. 18
SECTION 3.9 Certain Duties and Responsibilities
of the Property Trustee ................................... 20
SECTION 3.10 Certain Rights of Property Trustee. ....................... 22
SECTION 3.11 Delaware Trustee. ......................................... 24
SECTION 3.12 Execution of Documents. ................................... 25
SECTION 3.13 Not Responsible for Recitals or Issuance of
Securities. ............................................... 25
SECTION 3.14 Duration of Trust. ........................................ 25
SECTION 3.15 Mergers. .................................................. 25
i
3
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities ................... 27
SECTION 4.2 Responsibilities of the Sponsor. .......................... 28
SECTION 4.3 Right to Proceed. ......................................... 28
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees; Appointment of Co-Trustee ............. 29
SECTION 5.2 Delaware Trustee. ......................................... 29
SECTION 5.3 Property Trustee; Eligibility. ............................ 30
SECTION 5.4 Certain Qualifications of Administrative Trustees
and Delaware Trustee Generally. ........................... 31
SECTION 5.5 Administrative Trustees. .................................. 31
SECTION 5.6 Delaware Trustee. ......................................... 31
SECTION 5.7 Appointment, Removal and Resignation of Trustees .......... 32
SECTION 5.8 Vacancies among Trustees. ................................. 33
SECTION 5.9 Effect of Vacancies. ...................................... 34
SECTION 5.10 Meetings. ................................................. 34
SECTION 5.11 Delegation of Power. ...................................... 34
SECTION 5.12 Merger, Conversion, Consolidation or
Succession to Business .................................... 35
SECTION 5.13 Compensation. ............................................. 35
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions. ............................................ 35
ARTICLE VII ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities ................... 36
SECTION 7.2 Execution and Authentication. ............................. 36
SECTION 7.3 Form and Dating. .......................................... 37
SECTION 7.4 Registrar and Paying Agent. ............................... 38
SECTION 7.5 Paying Agent to Hold Money in Trust. ...................... 39
SECTION 7.6 Replacement Securities. ................................... 39
SECTION 7.7 Outstanding Preferred Securities. ......................... 40
SECTION 7.8 Preferred Securities in Treasury. ......................... 40
SECTION 7.9 Temporary Securities. ..................................... 40
ii
4
SECTION 7.10 Cancellation. ............................................. 41
SECTION 7.11 CUSIP Numbers. ............................................ 41
ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1 Dissolution of Trust. .................................... 42
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities. .................................. 43
SECTION 9.2 Transfer Procedures and Restrictions ..................... 43
SECTION 9.3 Deemed Security Holders. ................................. 46
SECTION 9.4 Book Entry Interests. .................................... 47
SECTION 9.5 Notices to Clearing Agency. .............................. 47
SECTION 9.6 Appointment of Successor Clearing Agency ................. 47
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS
SECTION 10.1 Liability. ............................................... 48
SECTION 10.2 Exculpation. ............................................. 48
SECTION 10.3 Fiduciary Duty. .......................................... 49
SECTION 10.4 Indemnification. ......................................... 50
SECTION 10.5 Outside Businesses. ...................................... 52
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year. ............................................. 53
SECTION 11.2 Certain Accounting Matters. .............................. 53
SECTION 11.3 Banking. ................................................. 54
SECTION 11.4 Withholding. ............................................. 54
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments. .............................................. 54
SECTION 12.2 Meetings of the Holders of Securities;
Action by Written Consent. ............................... 57
iii
5
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee ........ 58
SECTION 13.2 Representations and Warranties of Delaware Trustee ........ 59
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices. ................................................. 60
SECTION 14.2 Governing Law. ........................................... 61
SECTION 14.3 Intention of the Parties. ................................ 61
SECTION 14.4 Headings. ................................................ 62
SECTION 14.5 Successors and Assigns. .................................. 62
SECTION 14.6 Partial Enforceability. .................................. 62
SECTION 14.7 Counterparts. ............................................ 62
iv
6
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Agreement
310(a)..................................................... 5.3(a)
310(b)..................................................... 5.3(c)
310(c)..................................................... Inapplicable
311(a) and (b)............................................. 5.3(c)
311(c)..................................................... Inapplicable
312(a)..................................................... 2.2(a)
312(b)..................................................... 2.2(b)
313........................................................ 2.3
314(a)..................................................... 2.4
314(b)..................................................... Inapplicable
314(c)..................................................... 2.5
314(d)..................................................... Inapplicable
314(e)..................................................... 1.1, 2.5
314(f)..................................................... Inapplicable
315(a)..................................................... 3.9(b)
315(b)..................................................... 2.7(a)
315(c)..................................................... 3.9(a)
315(d)..................................................... 3.9(b)
316(a) and (b) ............................................ 2.6 and Annex I
316(c)..................................................... 3.6(f)
317(a)..................................................... 3.8(c)
317(b)..................................................... 3.8(i)
---------------
% This Cross-Reference Table does not constitute part of the Agreement and
shall not affect the interpretation of any of its terms or provisions.
7
AMENDED AND RESTATED
TRUST AGREEMENT
OF
HERCULES TRUST III
--------, ----
AMENDED AND RESTATED TRUST AGREEMENT (the "Agreement") dated and
effective as of ________, ____, by the Trustees (as defined herein), the Sponsor
(as defined herein) and by the holders, from time to time, of undivided
beneficial interests in the assets of the Trust (as defined herein) to be issued
pursuant to this Agreement;
WHEREAS, the Trustees and the Sponsor established Hercules Trust III
(the "Trust"), a trust created under the Business Trust Act (as defined herein)
pursuant to a Trust Agreement dated as of September 14, 1998 (the "Original
Agreement"), and a Certificate of Trust filed with the Secretary of State of the
State of Delaware on September 14, 1998, for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in certain Debentures of
the Debenture Issuer (each as hereinafter defined) and engaging in only those
activities necessary, advisable or incidental thereto;
WHEREAS, the parties hereto desire to amend and restate each and
every term and provision of the Original Agreement; and
NOW, THEREFORE, it being the intention of the parties hereto that
the Trust continue as a business trust under the Business Trust Act, that the
Original Agreement be amended and restated in its entirety as provided herein
and that this Agreement constitute the governing instrument of such business
trust, the Trustees declare that all assets contributed to the Trust will be
held in trust for the benefit of the holders, from time to time, of the
securities representing undivided beneficial interests in the assets of the
Trust issued hereunder, subject to the provisions of this Agreement and, in
consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt of which is hereby acknowledged, the
parties, intending to be legally bound hereby, agree as follows:
1
8
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) capitalized terms used in this Agreement but not defined in the
preamble above or elsewhere herein have the respective meanings assigned
to them in this Section 1.1;
(b) a term defined anywhere in this Agreement has the same meaning
throughout;
(c) all references to "the Agreement" or "this Agreement" are to
this Agreement and each Annex and Exhibit hereto, as modified,
supplemented or amended from time to time;
(d) all references in this Agreement to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Agreement unless otherwise specified;
(e) a term defined in the Trust Indenture Act (as defined herein)
has the same meaning when used in this Agreement unless otherwise defined
in this Agreement or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Administrative Trustee" has the meaning set forth in Section 5.1.
"Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent or Registrar [or Conversion Agent].
"Agreement" means this Amended and Restated Trust Agreement, dated
as of __________.
"Authorized Officer" of a Person means any other Person that is
authorized to legally bind such former Person.
"Book Entry Interest" means a beneficial interest in a Global
Preferred Security Certificate registered in the name of a Clearing Agency or
its nominee, ownership and transfers
2
9
of which shall be maintained and made through book entries by a Clearing Agency
as described in Section 9.4.
"Business Day" means any day other than a Saturday, Sunday or other
day on which banking institutions in The City of New York or Wilmington,
Delaware are authorized or required by law, regulation or executive order to
close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code Section3801 et seq., as it may be amended from time to time,
or any successor legislation.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Preferred Securities and in whose name or in the name of a nominee of
that organization shall be registered a global certificate and which shall
undertake to effect book-entry transfers and pledges of the Preferred
Securities.
"Closing Time" means the Closing Time as defined in the Purchase
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"Commission" means the United States Securities and Exchange
Commission as from time to time constituted, or if at any time after the
execution of this Agreement such Commission is not existing and performing the
duties now assigned to it under applicable federal securities laws, then the
body performing such duties at such time.
"Common Securities" has the meaning specified in Section 7.1(a).
"Common Securities Guarantee" means the Common Securities Guarantee
Agreement, dated as of ________, _____ of the Sponsor in respect of the Common
Securities.
"Company Indemnified Person" means (a) any Administrative Trustee;
(b) any Affiliate of any Administrative Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Administrative Trustee; or (d) any officer, employee or agent of the Trust or
its Affiliates; provided that the term "Company Indemnified Person" shall not
include any Fiduciary Indemnified Person.
"Conversion Agent" has the meaning specified in Section 7.4.
"Corporate Trust Office" means the office of the Property Trustee
for the conduct of corporate trust business at which matters related to this
Agreement shall, at any particular time, be principally administered, which
office at the date of execution of this Agreement is located at Xxx Xxxxxxx
Xxxxx, 00xx Xxxxx, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000.
3
10
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Hercules Incorporated, a Delaware
corporation, or any successor entity resulting from any consolidation,
amalgamation, merger or other business combination, in its capacity as issuer of
the Debentures under the Indenture.
"Debentures" means the _________ Junior Subordinated Deferrable
Interest Debentures due ________, ____ of the Debenture Issuer issued pursuant
to the Indenture.
"Debenture Trustee" means The Chase Manhattan Bank, a New York
banking corporation, as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.
"Default" means an event, act or condition that with notice of lapse
of time, or both, would constitute an Event of Default.
"Definitive Preferred Securities" has the meaning set forth in
Section 7.3(a).
"Delaware Trustee" has the meaning set forth in Section 5.1.
"Direct Action" has the meaning set forth in Section 3.8(e).
"Distribution" means a distribution payable to Holders of Securities
in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing
Agency.
"Event of Default" means, with respect to the Securities, an Event
of Default (as defined in the Indenture) that has occurred and is continuing in
respect of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Fiscal Year" has the meaning set forth in Section 11.1.
"Global Preferred Security" has the meaning set forth in Section
7.3(a).
"Holder" means a Person in whose name a Security or Successor
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
4
11
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of ________, between the
Debenture Issuer and the Debenture Trustee relating to the Debenture Issuer's
junior subordinated debentures [as supplemented by the Supplemental Indenture]
and as [further] amended or supplemented from time to time.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940,
as amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(h).
"Like Amount" has the meaning set forth in Section 3 of Annex I
hereto.
"Liquidation Amount" has the meaning set forth in Section 2 of Annex
I hereto.
"List of Holders" has the meaning set forth in Section 2.2(a) of
Annex I hereto.
"Majority in Liquidation Amount" means, with respect to the
Securities, except as provided in the terms of the Preferred Securities or by
the Trust Indenture Act, Holders of outstanding Securities voting together as a
single class or, as the context may require, Holders of outstanding Preferred
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of more than 50% of the aggregate Liquidation
Amount (including the amount that would be paid on redemption, liquidation or
otherwise, plus accumulated and unpaid Distributions to the date upon which the
voting percentages are determined) of all outstanding Securities of the relevant
class.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chief Executive Officer, the Chief Financial Officer,
the President or a Vice President, and by the Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary. Any Officers' Certificate delivered by
the Trust shall be signed by at least one Administrative Trustee. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
5
12
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Option Closing Date" means the date of closing of any sale of
Additional Securities (as defined in the Purchase Agreement) or, if such term is
not defined in the Purchase Agreement, the date of closing of any sale of
securities to the underwriters named in such Purchase Agreement solely to cover
overallotments.
"Opinion of Counsel" means a written opinion of counsel, who may be
an employee of the Sponsor, and who shall be reasonably acceptable to the
Property Trustee, provided, that the General Counsel or Assistant General
Counsel of the Sponsor shall be deemed to be reasonably acceptable to the
Trustee.
"Participants" has the meaning specified in Section 7.3(a).
"Paying Agent" has the meaning specified in Section 7.4.
"Payment Amount" has the meaning specified in Section 6.1.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Securities" has the meaning specified in Section 7.1(a).
"Preferred Securities Guarantee" means the Preferred Securities
Guarantee Agreement dated as of ________, of the Sponsor in respect of the
Preferred Securities.
"Preferred Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book-Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Property Trustee" has the meaning set forth in Section 5.3(a).
"Property Trustee Account" has the meaning set forth in Section
3.8(c).
6
13
"Purchase Agreement" means the Purchase Agreement for the offering
and sale of Preferred Securities in the form of Exhibit C.
"Quorum" means a majority of the Administrative Trustees or, if
there are only two Administrative Trustees, both of them.
"Registrar" has the meaning set forth in Section 7.4.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property Trustee,
any officer within the Corporate Trust Office of the Property Trustee with
direct responsibility for the administration of this Agreement, including any
vice-president, any assistant vice-president, any assistant secretary, any
assistant treasurer or other officer of the Corporate Trust Office 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 of the Property Trustee to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Securities" or "Trust Securities" means the Common Securities and
the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee and
the Preferred Securities Guarantee.
"Sponsor" means Hercules Incorporated, a Delaware corporation, or
any successor entity resulting from any merger, consolidation, amalgamation or
other business combination, in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section
5.7(b)(ii).
"Successor Entity" has the meaning set forth in Section 3.15(b)(i).
"Successor Property Trustee" has the meaning set forth in Section
3.8(f)(ii).
"Successor Securities" has the meaning set forth in Section
3.15(b)(i)(B).
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
7
14
"Tax Event" means the receipt by the Administrative Trustees and the
Debenture Issuer of a reasoned Opinion of Counsel from counsel experienced in
such matters to the effect that, as a result of any amendment to, or change
(including any announced prospective change) in, the laws or any regulations
thereunder of the United States or any political subdivision or taxing authority
thereof or therein, or as a result of any official administrative pronouncement
or judicial decision interpreting or applying such laws or regulations, which
amendment or change is effective or which pronouncement or decision is announced
on or after the date of this Agreement, there is more than an insubstantial risk
that (i) the Trust is, or will be within 90 days of the date of such opinion,
subject to United States Federal income tax with respect to income received or
accrued on the Debentures, (ii) the interest payable by the Debenture Issuer on
the Debentures is not, or within 90 days of the date of such opinion will not
be, deductible by the Debenture Issuer, in whole or in part, for United States
Federal income tax purposes, or (iii) the Trust is, or will be within 90 days of
the date of such opinion, subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
"10% in Liquidation Amount" means, with respect to the Securities,
except as provided in the terms of the Preferred Securities or by the Trust
Indenture Act, Holders of outstanding Securities voting together as a single
class or, as the context may require, Holders of outstanding Preferred
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of 10% or more of the aggregate Liquidation
Amount (including the amount that would be paid on redemption, liquidation or
otherwise, plus accumulated and unpaid Distributions to the date upon which the
voting percentages are determined) of all outstanding Securities of the relevant
class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Agreement as a trustee, so long as such Person shall continue as Trustee of the
Trust in accordance with the terms hereof, and all other Persons who may from
time to time be duly appointed, qualified and serving as Trustees in accordance
with the provisions hereof, and references herein to a Trustee or the Trustees
shall refer to such Person or Persons solely in their capacity as trustees
hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
8
15
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Agreement in order for this
Agreement to be qualified under the Trust Indenture Act and shall, to the extent
applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a
trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to
317, inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Agreement
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Administrative Trustees on behalf of
the Trust shall provide the Property Trustee, unless the Property Trustee is
Registrar for the Securities, (i) within 14 days after each record date for
payment of Distributions, a list, in such form as the Property Trustee may
reasonably require, of the names and addresses of the Holders of the Securities
("List of Holders") as of such record date, provided that neither the Sponsor
nor the Administrative Trustees on behalf of the Trust shall be obligated to
provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Property Trustee by the
Sponsor and the Administrative Trustees on behalf of the Trust, and (ii) at any
other time, within 30 days of receipt by the Trust of a written request for a
List of Holders as of a date no more than 14 days before such List of Holders is
given to the Property Trustee. The Property Trustee shall preserve, in as
current a form as is reasonably practicable, all information contained in Lists
of Holders given to it or which it receives in the capacity as Paying Agent (if
acting in such capacity), provided that the Property Trustee may destroy any
List of Holders previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
9
16
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after September 1 of each year, commencing September
1, ____, the Property Trustee shall provide to the Holders of the Preferred
Securities such reports as are required by Section 313 of the Trust Indenture
Act, if any, in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Property Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such documents, reports and
information as are required by Section 314 of the Trust Indenture Act (if any)
and the compliance certificate required by Section 314 of the Trust Indenture
Act in the form, in the manner and at the times required by Section 314 of the
Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent provided for in this Agreement that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section 314(c)(1) of
the Trust Indenture Act may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in Liquidation Amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Agreement shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
aggregate principal amount of the holders of the Debentures (a "Super
Majority") to be waived under the Indenture, the Event of Default under
the Agreement may only be waived by the vote of the Holders of at least
the proportion in aggregate Liquidation Amount of the Preferred Securities
that the relevant Super Majority represents of the aggregate principal
amount of the Debentures outstanding.
10
17
The foregoing provisions of this Section 2.6(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Agreement and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Agreement, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Agreement without any further act, vote, or
consent of the Holders of the Common Securities.
(b) The Holders of a Majority in Liquidation Amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture (except where the Holders of
the Common Securities are deemed to have waived such Event of Default
under the Agreement as provided below in this Section 2.6(b)), the Event
of Default under the Agreement shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have
waived such Event of Default under the Agreement as provided below in this
Section 2.6(b), the Event of Default under the Agreement may only be
waived by the vote of the Holders of at least the proportion in aggregate
Liquidation Amount of the Common Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences until all Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise eliminated, and until
such Events of Default have been so cured, waived or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Preferred Securities and only the Holders of the Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms of
the Securities. The foregoing provisions of this Section 2.6(b) shall be in lieu
of Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and
such Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are
hereby expressly excluded from this Agreement and the Securities, as permitted
by the Trust Indenture Act. Subject to the foregoing provisions of this Section
2.6(b), upon such waiver, any such default shall cease to exist and any Event of
Default with respect to the Common Securities arising therefrom shall be deemed
to have been cured for every purpose of this Agreement, but
11
18
no such waiver shall extend to any subsequent or other default or Event of
Default with respect to the Common Securities or impair any right consequent
thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee, at the direction of the Holders of the Preferred Securities,
constitutes a waiver of the corresponding Event of Default under this Agreement.
The foregoing provisions of this Section 2.6(c) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Agreement and the
Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
(a) The Property Trustee shall, within 90 days after the occurrence
of any default with respect to the Securities, transmit by mail, first class
postage prepaid, to the Holders of the Securities and to the Sponsor, notices of
all such defaults actually known to a Responsible Officer of the Property
Trustee, unless such defaults have been cured before the giving of such notice
(the term "defaults" for the purposes of this Section 2.7(a) being hereby
defined to be a Default as defined in the Indenture, not including any periods
of grace provided for therein and irrespective of the giving of any notice
provided therein); provided that, except for (i) a default in the payment of
principal of (or premium, if any) or interest on any of the Debentures or (ii)
any failure by the Company to deliver the required securities or other rights
upon a conversion or exchange election, the Property Trustee shall be protected
in withholding such notice if and so long as a committee of Responsible Officers
of the Property Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have actual
knowledge of any default except:
(i) a default under Sections 6.01(a) and 6.01(b) of the Indenture;
or
(ii) any default as to which the Property Trustee shall have
received written notice or of which a Responsible Officer of the Property
Trustee charged with the administration of the Agreement shall have actual
knowledge.
(c) Within ten Business Days after the occurrence of any Event of
Default actually known to a Responsible Officer of the Property Trustee, the
Property Trustee shall transmit notice of such Event of Default to the Holders
of the Preferred Securities, the Administrative Trustees and the Sponsor, unless
such Event of Default shall have been cured, waived or otherwise eliminated. The
Sponsor and the Administrative Trustees shall file annually with the Property
Trustee a certification as to whether or not they are in compliance with all the
conditions and covenants applicable to them under this Agreement.
12
19
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "Hercules Trust III" as such name may be modified
from time to time by the Administrative Trustees following written notice to the
Delaware Trustee, the Property Trustee and the Holders of Securities. The
Trust's activities may be conducted under the name of the Trust or any other
name deemed advisable by the Administrative Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o Hercules
Plaza, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000. On ten
Business Days' prior written notice to the Delaware Trustee, the Property
Trustee and the Holders of Securities, the Administrative Trustees may designate
another principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue
and sell Securities, (b) use the proceeds from the sale of the Securities to
acquire the Debentures in an aggregate principal amount equal to the aggregate
Liquidation Amount of such Securities, and (c) except as otherwise limited
herein, to engage in only those other activities necessary, advisable or
incidental thereto, including without limitation, those activities specified in
Sections 3.6, 3.8, 3.9, 3.10, 3.11 and/or 3.12.
SECTION 3.4 Authority.
Subject to the limitations provided in this Agreement and to the
specific duties of the Property Trustee, the Administrative Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by one or more of the Administrative Trustees in accordance with
their powers shall constitute the act of and serve to bind the Trust and an
action taken by the Property Trustee on behalf of the Trust in accordance with
its powers shall constitute the act of and serve to bind the Trust. In dealing
with the Trustees acting on behalf of the Trust, no Person shall be required to
inquire into the authority of the Trustees to bind the Trust. Persons dealing
with the Trust are entitled to rely conclusively on the power and authority of
the Trustees as set forth in this Agreement.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and
the Property Trustee Account or as otherwise provided in this Agreement, legal
title to all assets of the Trust shall be vested in the Trust. The Holders shall
not have legal title to any part of the assets of the Trust, but shall have an
undivided beneficial interest in the assets of the Trust.
13
20
SECTION 3.6 Powers and Duties of the Administrative Trustees.
The Administrative Trustees shall have the exclusive power, duty and
authority, and are hereby authorized and directed, to cause the Trust to engage
in the following activities:
(a) to execute, deliver, issue and sell the Preferred Securities and
the Common Securities in accordance with this Agreement; provided, however, that
(i) the Trust may issue no more than one series of Preferred Securities and no
more than one series of Common Securities, (ii) there shall be no interests in
the Trust other than the Securities, and (iii) the issuance of Securities shall
be limited to a simultaneous issuance of both Preferred Securities and Common
Securities at the Closing Time and the Option Closing Date, if any;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file any documents prepared by the Sponsor, or take
any acts as determined by the Sponsor to be necessary in order to qualify
or register all or part of the Preferred Securities in any State in which
the Sponsor has determined to qualify or register such Preferred
Securities for sale;
(ii) at the direction of the Sponsor, execute and file an
application, prepared by the Sponsor, to the New York Stock Exchange or
any other national stock exchange or the Nasdaq National Market for
listing or quotation of the Preferred Securities;
(iii) execute and deliver letters, documents, or instruments with
DTC and other Clearing Agencies relating to the Preferred Securities;
(iv) if required, execute and file with the Commission a
registration statement on Form 8-A, including any amendments thereto,
prepared by the Sponsor, relating to the registration of the Preferred
Securities under Section 12(b) or 12(g) of the Exchange Act, as the case
may be; and
(v) execute and file any agreement, certificate or other document
which such Administrative Trustee deems necessary or appropriate in
connection with the issuance and sale of the Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that the
Administrative Trustees shall cause legal title to the Debentures to be held of
record in the name of the Property Trustee for the benefit of the Holders of the
Preferred Securities and the Holders of Common Securities;
(d) to cause the Trust to enter into such agreements and
arrangements as may be necessary or desirable in connection with the sale of
Preferred Securities to the underwriters
14
21
thereof and the consummation thereof, and to take all action, and exercise all
discretion, as may be necessary or desirable in connection with the consummation
thereof;
(e) to give the Sponsor and the Property Trustee prompt written
notice of the occurrence of a Tax Event;
(f) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and with
respect to, for the purposes of Section316(c) of the Trust Indenture Act,
Distributions, voting rights, [conversions, exchanges] and redemptions, and to
issue relevant notices to the Holders of Preferred Securities and Holders of
Common Securities as to such actions and applicable record dates;
(g) to take all actions and perform such duties as may be required
of the Administrative Trustees pursuant to the terms of the Securities;
(h) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(i) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(j) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(k) to give the certificate required by Section 314(a)(4) of the
Trust Indenture Act to the Property Trustee, which certificate may be executed
by any Administrative Trustee;
(l) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(m) to act as, or appoint another Person to act as, Registrar for
the Securities or to appoint a Paying Agent [or Conversion Agent] for the
Securities as provided in Section 7.4 except for such time as such power to
appoint a Paying Agent [ or Conversion Agent] is vested in the Property Trustee;
(n) to give prompt written notice to the Property Trustee and to
Holders of the Securities of any notice received from the Debenture Issuer of
its election to defer payments of interest on the Debentures by extending the
interest payment period under the Indenture;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which
15
22
such existence is necessary to protect the limited liability of the Holders of
the Preferred Securities or to enable the Trust to effect the purposes for which
the Trust was created;
(p) to take any action (provided that such action does not
materially adversely affect the interests of Holders), not inconsistent with
this Agreement or with applicable law, that the Administrative Trustees
determine in their discretion to be necessary or desirable in carrying out the
activities of the Trust as set out in this Section 3.6, including, but not
limited to:
(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States Federal
income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States Federal income tax purposes;
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Administrative Trustees, on behalf of
the Trust; and
(r) to execute and deliver and record, file or register, as
applicable, all documents, certificates, agreements or instruments, perform all
duties and powers, and do all things for and on behalf of the Trust in all
matters necessary, advisable or incidental to the foregoing.
The Administrative Trustees must exercise the powers set forth in
this Section 3.6 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Administrative Trustees shall not
take any action that is inconsistent with the purposes and functions of the
Trust set forth in Section 3.3.
Subject to this Section 3.6, the Administrative Trustees shall have
none of the powers or the authority of the Property Trustee set forth in Section
3.8.
Any expenses incurred by the Administrative Trustees pursuant to
this Section 3.6 shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust and the Trustees (including the Property Trustee and
the Delaware Trustee) shall not, and the Administrative Trustees shall cause the
Trust not to, engage in any activity other than as required or authorized by
this Agreement. In particular, the Trust shall not:
16
23
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of
Securities pursuant to the terms of this Agreement and of the Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose or
execute any mortgage in respect of, or pledge, any Trust property;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities;
(vii) so long as any Debentures are held by the Property Trustee,
the Trustees shall not (A) direct the time, method and place of conducting
any proceeding with respect to any remedy available to the Debenture
Trustee, or exercise any trust or power conferred upon the Debenture
Trustee with respect to the Debentures, (B) waive any past default that is
waivable under the Indenture, (C) exercise any right to rescind or annul a
declaration of acceleration of the maturity of the principal of the
Debentures, or (D) consent to any amendment, modification or termination
of the Indenture or the Debentures where such consent shall be required,
without, in each case, obtaining (1) the prior approval of the Holders of
a Majority in Liquidation Amount of all outstanding Securities; provided,
however, that where a 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 approval of each
Holder of Securities and (2) an Opinion of Counsel delivered to the Trust
from tax counsel experienced in such matters to the effect that the Trust
will not be classified as an association taxable as a corporation for
United States Federal income tax purposes on account of such action;
(viii) revoke any action previously authorized or approved by a vote
of the Holders of Preferred Securities except by subsequent vote of such
Holders;
(ix) revoke any action previously authorized or approved by a vote
of the Holders of Common Securities except by subsequent vote of such
Holders; or
(x) undertake (or permit to be undertaken) any activity that would
cause the Trust not to be classified for United States Federal income tax
purposes as a grantor trust.
17
24
SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of the Trust
and the Holders of the Securities. The right, title and interest of the Property
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Property Trustee in accordance with Section 5.7. Such
vesting and cessation of title shall be effective whether or not conveyancing
documents with regard to the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Debentures to the Administrative Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
[The Trust and the Property Trustee shall not convert any Debentures
held by either of them except pursuant to a notice of conversion delivered to
the Conversion Agent by a Holder of Securities.]
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Property Trustee Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders of the
Securities and, upon the receipt of payments of funds made in respect of
the Debentures held by the Property Trustee, deposit such funds into the
Property Trustee Account and make payments or cause the Paying Agent to
make payments to the Holders of the Preferred Securities and Holders of
the Common Securities from the Property Trustee Account in accordance with
Section 6.1. Funds in the Property Trustee Account shall be held
uninvested until disbursed in accordance with this Agreement. The Property
Trustee Account shall be an account that is maintained with a banking
institution the rating on whose long-term unsecured indebtedness is at
least equal to the rating assigned to the Preferred Securities by a
"nationally recognized statistical rating organization", as that term is
defined for purposes of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Preferred Securities and the
Common Securities to the extent the Debentures are redeemed or mature;
(iii) upon written notice of distribution issued by the
Administrative Trustees in accordance with the terms of the Securities,
engage in such ministerial activities as shall be necessary or appropriate
to effect the distribution of the Debentures to Holders of Securities upon
the occurrence of certain events; and
18
25
(iv) take such ministerial action as may be requested by the
Administrative Trustees in connection with the winding up of the affairs
of or liquidation of the Trust in accordance with this Agreement and the
preparation, execution and filing of a certificate of cancellation or
other appropriate certificates with the Secretary of State of the State of
Delaware and other appropriate governmental authorities.
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to the
terms of this Agreement and the Securities.
(e) Subject to Section 3.9, the Property Trustee shall take any
Legal Action which arises out of or in connection with an Event of Default of
which a Responsible Officer of the Property Trustee has actual knowledge or the
Property Trustee's duties and obligations under this Agreement or the Trust
Indenture Act and, if the Property Trustee shall have failed to take such Legal
Action, the Holders of the Preferred Securities in at least an aggregate
Liquidation Amount equal to the specified percentage of Holders of Debentures
entitled to take such Legal Action may, to the fullest extent permitted by law,
take such Legal Action without first proceeding against the Property Trustee or
the Trust; provided however, that if an Event of Default has occurred and is
continuing and such event is attributable [either] to [(i)] the failure of the
Debenture Issuer to pay the principal of or premium, if any, or interest on the
Debentures on the date such principal, premium, if any, or interest is otherwise
payable (or in the case of redemption, on the redemption date) [or (ii) the
failure by the Sponsor to deliver the required securities upon an appropriate
conversion right election], then a Holder of Preferred Securities may directly
institute a proceeding for enforcement of payment to such Holder of the
principal of or premium, if any, or interest on the Debentures having a
principal amount equal to the aggregate Liquidation Amount of the Preferred
Securities of such Holder on or after the respective due date specified in the
Debentures [or for enforcement of such conversion rights, as the case may be] (a
"Direct Action"). Except as provided in the preceding sentence, the Holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.
(f) The Property Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities and this Agreement; or
(ii) a successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 5.7 (a "Successor
Property Trustee").
(g) The Property Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer of
the Property Trustee occurs and is continuing, the
19
26
Property Trustee shall, for the benefit of Holders of the Securities, enforce
its rights as holder of the Debentures subject to the rights of the Holders
pursuant to the terms of the Securities and this Agreement.
(h) The Property Trustee shall be authorized to undertake any
actions set forth in Section 317(a) of the Trust Indenture Act.
(i) For such time as the Property Trustee is the Paying Agent, the
Property Trustee may authorize one or more Persons to act as additional Paying
Agents and to pay Distributions, redemption payments or liquidation payments on
behalf of the Trust with respect to all Securities and any such Paying Agent
shall comply with Section 317(b) of the Trust Indenture Act. Any such additional
Paying Agent may be removed by the Property Trustee at any time the Property
Trustee remains as Paying Agent and a successor Paying Agent or additional
Paying Agents may be (but are not required to be) appointed at any time by the
Property Trustee while the Property Trustee is acting as Paying Agent.
(j) Subject to this Section 3.8, the Property Trustee shall have
none of the duties, liabilities, powers or the authority of the Administrative
Trustees set forth in Section 3.6.
Notwithstanding anything expressed or implied to the contrary in
this Agreement or any Annex or Exhibit hereto, the Property Trustee must
exercise the powers set forth in this Section 3.8 in a manner that is consistent
with the purposes and functions of the Trust set out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee.
(a) The Property Trustee, before the occurrence of any Event of
Default and after the curing or waiving of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Agreement and in the Securities and no implied covenants or
obligations shall be read into this Agreement against the Property Trustee. In
case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6) of which a Responsible Officer of the Property Trustee
has actual knowledge, the Property Trustee shall exercise such of the rights and
powers vested in it by this Agreement, and use the same degree of care and skill
in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Agreement shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act, its own bad faith or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
20
27
a (A) the duties and obligations of the Property Trustee shall
be determined solely by the express provisions of this Agreement and in
the Securities and the Property Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set
forth in this Agreement and in the Securities, and no implied covenants
or obligations shall be read into this Agreement against the Property
Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Property Trustee and
conforming to the requirements of this Agreement; provided, however,
that in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to the
Property Trustee, the Property Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements
of this Agreement (but shall not be required to confirm or investigate
the accuracy of mathematical calculations or other facts stated
therein);
(ii) the Property Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Property Trustee, unless it
shall be proved that the Property Trustee was negligent in ascertaining the
pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a Majority in Liquidation Amount of the Securities
relating to the time, method and place of conducting any proceeding for any
remedy available to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under this Agreement;
(iv) no provision of this Agreement shall require the Property Trustee
to expend or risk its own funds or otherwise incur personal financial liability
in the performance of any of its duties or in the exercise of any of its rights
or powers, if it shall have reasonable grounds for believing that the repayment
of such funds or liability is not reasonably assured to it under the terms of
this Agreement or indemnity reasonably satisfactory to the Property Trustee
against such risk or liability is not reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the custody,
safekeeping and physical preservation of the Debentures and the Property Trustee
Account shall be to deal with such property in a similar manner as the Property
Trustee deals with similar property for its own account, subject to the
protections and limitations on liability afforded to the Property Trustee under
this Agreement and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability for or with
respect to the value, genuineness, existence or sufficiency of the Debentures or
the payment of any taxes or assessments levied thereon or in connection
therewith;
21
28
(vii) the Property Trustee shall not be liable for any interest on any
money received by it except as it may otherwise agree in writing with the
Sponsor. Money held by the Property Trustee need not be segregated from other
funds held by it except in relation to the Property Trustee Account maintained
by the Property Trustee pursuant to Section 3.8(c)(i) and except to the extent
otherwise required by law; and
(viii) the Property Trustee shall not be responsible for monitoring the
compliance by the Administrative Trustees or the Sponsor with their respective
duties under this Agreement, nor shall the Property Trustee be liable for any
default or misconduct of the Administrative Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Administrative
Trustees contemplated by this Agreement may be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Agreement, the
Property Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the Property Trustee
(unless other evidence is herein specifically prescribed) may, in the absence of
bad faith on its part, request and conclusively rely upon an Officers'
Certificate which, upon receipt of such request, shall be promptly delivered by
the Sponsor or the Administrative Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
re-recording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel or other
experts of its selection and the advice or opinion of such counsel and experts
with respect to legal matters or advice within the scope of such experts' area
of expertise shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion, such counsel may be counsel to the
Sponsor or any of its Affiliates, and may include any of its employees; and the
Property Trustee shall have the right at any time to seek instructions
22
29
concerning the administration of this Agreement from any court of competent
jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement at the
request or direction of any Holder, unless such Holder shall have provided to
the Property Trustee security and indemnity, reasonably satisfactory to the
Property Trustee, against the costs, expenses (including reasonable attorneys'
fees and expenses and the expenses of the Property Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be requested by
the Property Trustee in respect of the time, method or place of conducting any
proceeding for any remedy available to the Property Trustee or the exercise of
any trustor power conferred on the Property Trustee under this Agreement;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Property Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Property Trustee shall
not be responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Property Trustee or its agents alone shall be sufficient and
effective to perform any such action and no third party shall be required to
inquire as to the authority of the Property Trustee to so act or as to its
compliance with any of the terms and provisions of this Agreement, both of which
shall be conclusively evidenced by the Property Trustee's or its agent's taking
such action;
(x) whenever in the administration of this Agreement the
Property Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders of the Securities which
instructions may only be given by the Holders of the same proportion in
Liquidation Amount of the Securities as would be entitled to direct the Property
Trustee under the terms of the Securities in respect of such remedy, right or
action, (ii) may refrain from enforcing such remedy or right or taking such
other action until such instructions are received, and (iii) shall be protected
in conclusively relying on, or acting in accordance with, such instructions;
23
30
(xi) except as otherwise expressly provided by this Agreement,
the Property Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Agreement; and
(xii) the Property Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith, without negligence,
and reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement.
(b) No provision of this Agreement shall be deemed to impose any duty
or obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall be
construed to be a duty.
(c) It is expressly understood and agreed by the parties hereto that in
fulfilling its obligations as Property Trustee hereunder on behalf of the Trust,
(i) any agreements or instruments executed or delivered by The Chase Manhattan
Bank are executed and delivered not in its individual capacity but solely as
Property Trustee under this Agreement in the exercise of the powers and
authority conferred and vested in it, (ii) each of the representations,
undertakings and agreements herein made on the part of the Trust is made and
intended not as representations, warranties, covenants, undertakings and
agreements by The Chase Manhattan Bank in its individual capacity but is made
and intended for the purpose of binding only the Trust, and (iii) under no
circumstances (except with respect to funds delivered to it relating to payments
in respect of the Securities) shall The Chase Manhattan Bank in its individual
capacity be personally liable for the payment of any indebtedness or expenses of
the Trust or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Trust under this
Agreement except if such breach or failure is due to any negligence, bad faith
or willful misconduct of the Property Trustee.
SECTION 3.11 Delaware Trustee.
(a) Notwithstanding any other provision of this Agreement
other than Section 5.2, the Delaware Trustee shall not be entitled to exercise
any powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Administrative Trustees or the Property Trustee
described in this Agreement (except as required under the Business Trust Act).
Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of Section 3807 of
the Business Trust Act.
(b) It is expressly understood and agreed by the parties
hereto that in fulfilling its obligations as Delaware Trustee hereunder on
behalf of the Trust, (i) any agreements or instruments executed or delivered by
Chase Manhattan Bank Delaware are executed and
24
31
delivered not in its individual capacity but solely as Delaware Trustee under
this Agreement in the exercise of the powers and authority conferred and vested
in it, (ii) each of the representations, undertakings and agreements herein made
on the part of the Trust is made and intended not as representations,
warranties, covenants, undertakings and agreements by Chase Manhattan Bank
Delaware in its individual capacity but is made and intended for the purpose of
binding only the Trust, and (iii) under no circumstances shall Chase Manhattan
Bank Delaware in its individual capacity be personally liable for the payment of
any indebtedness or expenses of the Trust or be liable for the breach or failure
of any obligation, representation, warranty, or covenant made or undertaken by
the Trust under this Agreement except if such breach or failure is due to any
negligence, bad faith or willful misconduct of the Delaware Trustee.
SECTION 3.12 Execution of Documents.
Except as otherwise required by the Business Trust Act or applicable
law, each Administrative Trustee, individually, is authorized to execute and
deliver on behalf of the Trust any documents, agreements, instruments or
certificates that the Administrative Trustees have the power and authority to
execute and deliver pursuant to this Agreement.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Agreement and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Agreement or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless dissolved pursuant to the provisions of Article VIII
hereof, shall have existence until [35 years from execution].
SECTION 3.15 Mergers.
(a) The Trust may not merge with or into, convert 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 Person, except as
described in Section 3.15(b) and (c) and except with respect to the distribution
of all Debentures to Holders of Securities pursuant to Section 8.1(a)(iii).
(b) The Trust may, at the request of the Sponsor, with the consent of
the Administrative Trustees or, if there are more than two, a majority of the
Administrative Trustees and without the consent of the Holders of the
Securities, the Delaware Trustee or the Property Trustee, merge with or into,
convert into, consolidate, amalgamate, or be replaced by, or convey,
25
32
transfer or lease its properties and assets as an entirety or substantially as
an entirety to, a trust organized as such under the laws of any State; provided
that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the
Trust under the Securities; or
(B) substitutes for the Securities other securities
having substantially the same terms as the Securities (the
"Successor Securities") so long as the Successor Securities
rank the same as the Securities rank with respect to
Distributions and payments upon liquidation, redemption and
otherwise;
(ii) the Sponsor expressly appoints a trustee of the Successor
Entity that possesses the same powers and duties as the Property Trustee with
respect to the Debentures;
(iii) the Successor Securities (excluding any securities
substituted for any Common Securities) are listed, quoted or included for
trading, or any Successor Securities will be listed, quoted or included for
trading, upon notification of issuance, on any national securities exchange or
with any other organization on which the Preferred Securities are then listed,
quoted or included;
(iv) such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the Preferred
Securities (including any Successor Securities) or the Debentures to be
downgraded or placed under surveillance or review by any nationally recognized
statistical rating organization that publishes a rating on the Preferred
Securities or the Debentures;
(v) such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders of the Securities (including the
holders of any Successor Securities) in any material respect (other than with
respect to any dilution of the interests of such Holders or holders, as the case
may be, in the Successor Entity);
(vi) the Successor Entity has a purpose substantially
identical to that of the Trust;
(vii) prior to such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Sponsor has
received an opinion of a nationally recognized independent counsel to the Trust
experienced in such matters to the effect that:
26
33
(A) such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease does
not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including the holders of any
Successor Securities) in any material respect (other than with
respect to any dilution of the interests of such Holders or
holders, as the case may be, in the Successor Entity); and
(B) following such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease,
neither the Trust nor the Successor Entity, if any, will be
required to register as an Investment Company; and
(viii) the Sponsor or any permitted successor or assignee owns
all of the common securities of the Successor Entity and guarantees the
obligations of the Successor Entity under the Successor Securities at
least to the extent provided by the Preferred Securities Guarantee and
the Common Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not,
except with the consent of Holders of 100% in Liquidation Amount of the
Securities, merge with or into, convert 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 other Person or permit any
other Person to merge with or into, consolidate, amalgamate, or replace it if
such merger, conversion, consolidation, amalgamation, replacement, conveyance,
transfer or lease would cause the Trust or the Successor Entity, if any, not to
be classified as a grantor trust for United States Federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
At the Closing Time and on any Option Closing Date, the Sponsor will
purchase all of the Common Securities then issued by the Trust, in an amount
equal to at least 3% of the total capital of the Trust, at the same time as the
Preferred Securities are issued and sold. The aggregate Liquidation Amount of
Common Securities at any time shall not be less than 3% of the total capital of
the Trust.
For so long as the Preferred Securities remain outstanding, the Sponsor
covenants (i) to maintain, directly or indirectly, 100% ownership of the Common
Securities; provided, however, that any permitted successor of the Sponsor under
the Indenture may succeed to the Sponsor's interest in the Common Securities,
(ii) to use its best efforts to cause the Trust (a) to remain a business trust,
except in connection with a distribution of Debentures to the Holders of
Securities in liquidation of the Trust, the [conversion, exchange or] redemption
of all the Securities, or certain mergers, consolidations or amalgamations, each
as permitted by this
27
34
Agreement, and not to voluntarily dissolve, wind up, liquidate or be terminated,
except as permitted by this Agreement, and (b) to otherwise continue to be
classified as a grantor trust for United States federal income tax purposes,
(iii) to use its best efforts to ensure that the Trust shall not be an
Investment Company for purposes of the Investment Company Act, (iv) to use its
best efforts to cause each Holder of Securities to be treated as owning an
undivided beneficial interest in the Debentures and (v) to take no action which
would cause the dissolution, liquidation or winding up of the Trust, except as
otherwise provided in this Agreement.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by the Trust, execute and file with the
Commission the registration statement on Form S-3 pertaining to the Preferred
Securities, including any amendments thereto and to register the Preferred
Securities Guarantee related thereto;
(b) to determine the jurisdictions in which to take appropriate action
to qualify or register for sale all or part of the Preferred Securities and to
do any and all such acts, other than actions which must be taken by the Trust,
and advise the Trust of actions it must take, and prepare for execution and
filing any documents to be executed and filed by the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of any such
jurisdictions;
(c) if deemed necessary or advisable by the Sponsor, to prepare for
filing by the Trust an application to the New York Stock Exchange or any other
national stock exchange or the Nasdaq National Market for listing or quotation
of the Preferred Securities;
(d) to prepare for filing by the Trust, execute and file with the
Commission a registration statement on Form 8-A, including any amendments
thereto, relating to the registration of the Preferred Securities under Section
12(b) or 12(g) of the Exchange Act, as the case may be, including any amendments
thereto; and
(e) to negotiate the terms of, execute, enter into and deliver the
Purchase Agreement providing for the sale of the Preferred Securities.
SECTION 4.3 Right to Proceed.
The Sponsor acknowledges the rights of the Holders of Preferred
Securities to bring one or more Direct Actions under the circumstances specified
in this Agreement.
28
35
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees; Appointment of Co-Trustee.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor may,
by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the Holders of a Majority in Liquidation
Amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities;
provided, however, that, the number of Trustees shall in no event be less than
two (2); provided further that (1) one Trustee shall be a Person meeting the
requirements of Section 5.2 (the "Delaware Trustee"); (2) there shall be at
least one Trustee who is an employee or officer of, or is affiliated with the
Sponsor (an "Administrative Trustee"); and (3) one Trustee shall be the Property
Trustee for so long as this Agreement is required to qualify as an indenture
under the Trust Indenture Act, and such Trustee may also serve as Delaware
Trustee if it meets the applicable requirements. Notwithstanding the above,
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's property may at the
time be located, the Holders of a Majority in Liquidation Amount of the Common
Securities acting as a class at a meeting of the Holders of the Common
Securities, and the Administrative Trustees shall have power to appoint one or
more Persons either to act as a co-trustee, jointly with the Property Trustee,
of all or any part of the Trust's property, or 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 to vest in such Person or Persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of this Agreement. In case an Event of Default has
occurred and is continuing, the Property Trustee alone shall have power to make
any such appointment of a co-trustee.
SECTION 5.2 Delaware Trustee.
For so long as required by the Business Trust Act, the Delaware Trustee
shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place of
business in the State of Delaware, and otherwise meets the requirements of
applicable law, provided, however, if the Property Trustee has its principal
place of business in the State of Delaware and
29
36
otherwise meets the requirements of applicable law, then the Property Trustee
shall also be the Delaware Trustee and Section 3.11 shall have no application.
SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee (the "Property Trustee")
which shall act as Property Trustee and which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted by
the Commission to act as an indenture trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $50,000,000, and
subject to supervision or examination by federal, state, territorial or
District of Columbia authority. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements
of the supervising or examining authority referred to above, then for
the purposes of this Section 5.3(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Property Trustee shall cease to be eligible to
so act under Section 5.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 5.7(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in Section 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Agreement for purposes of clause (i) of the first
provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
The Chase Manhattan Bank
One Xxxxxxx Xxxxx, 00xx Xxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Corporate Trust Department
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
30
37
SECTION 5.4 Certain Qualifications of Administrative Trustees and Delaware
Trustee Generally.
Each Administrative Trustee and the Delaware Trustee (unless the
Property Trustee also acts as Delaware Trustee) shall be either a natural person
who is at least 21 years of age or a legal entity that shall act through one or
more Authorized Officers.
SECTION 5.5 Administrative Trustees.
The initial Administrative Trustees shall be:
Xxxxxx X. Xxxxx
Xxx X. Xxxx
Xxxxxx X. Xxxxxx
c/o Hercules Incorporated
Hercules Plaza
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(a) Except as expressly set forth in this Agreement and except if a
meeting of the Administrative Trustees is called with respect to any matter over
which the Administrative Trustees have power to act, any power of the
Administrative Trustees may be exercised by, or with the consent of, any one
such Administrative Trustee.
(b) Unless otherwise determined by the Administrative Trustees, and
except as otherwise required by the Business Trust Act or applicable law, any
Administrative Trustee acting alone is authorized to execute on behalf of the
Trust any documents which the Administrative Trustees have the power and
authority to cause the Trust to execute pursuant to Section 3.6.
SECTION 5.6 Delaware Trustee.
The initial Delaware Trustee shall be:
Chase Manhattan Bank Delaware
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Department
31
38
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
SECTION 5.7 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.7(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor;
(ii) unless an Event of Default shall have occurred and be
continuing after the issuance of any Securities, by vote of the Holders
of a Majority in Liquidation Amount of the Common Securities voting as
a class at a meeting of the Holders of the Common Securities; and
(iii) if an Event of Default shall have occurred and be
continuing after the issuance of the Securities, with respect to the
Property Trustee or the Delaware Trustee, by vote of Holders of a
Majority in Liquidation Amount of the Preferred Securities voting as a
class at a meeting of Holders of the Preferred Securities (it being
understood that in no event will the Holders of the Preferred
Securities have the right to vote, appoint, remove or replace the
Administrative Trustees, which voting rights are exclusively vested in
the Holder of the Common Securities).
(b) The Trustee that acts as Property Trustee shall not be removed
in accordance with Section 5.7(a) until a Successor Property Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Property Trustee and delivered to the Administrative Trustees and
the Sponsor; and
(c) the Trustee that acts as Delaware Trustee shall not be removed in
accordance with Section 5.7(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the removed Delaware Trustee, the Property Trustee (if the
removed Delaware Trustee is not also the Property Trustee), the Administrative
Trustees and the Sponsor.
(d) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, removal or resignation. Any
Trustee may resign from office (without need for prior or subsequent accounting)
by an instrument in writing signed by the Trustee and delivered to the other
Trustees, the Sponsor and the Trust, which resignation shall take effect upon
such delivery or upon such later date as is specified therein; provided,
however, that:
32
39
(i) No such resignation of the Trustee that acts as the
Property Trustee shall be effective:
(A) until a Successor Property Trustee has been
appointed and has accepted such appointment by instrument
executed by such Successor Property Trustee and delivered to
the Trust, the Sponsor, the Delaware Trustee (if the resigning
Property Trustee is not also the Delaware Trustee) and the
resigning Property Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed to
the Holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware Trustee
has been appointed and has accepted such appointment by instrument
executed by such Successor Delaware Trustee and delivered to the Trust,
the Property Trustee (if the resigning Delaware Trustee is not also the
Property Trustee), the Sponsor and the resigning Delaware Trustee.
(e) The Holders of the Common Securities or, if an Event of Default
shall have occurred and be continuing after the issuance of the Securities, the
Holders of the Preferred Securities shall use their best efforts to promptly
appoint a Successor Delaware Trustee or Successor Property Trustee, as the case
may be, if the Property Trustee or the Delaware Trustee delivers an instrument
of resignation in accordance with this Section 5.7.
(f) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.7 within 60 days after delivery of an instrument of resignation or removal,
the Property Trustee or Delaware Trustee resigning or being removed, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Property Trustee or Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper and
prescribe, appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be.
(g) No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
SECTION 5.8 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Administrative Trustees or, if
there are more than two, a majority of the Administrative Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.7.
33
40
SECTION 5.9 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to dissolve, terminate or annul the Trust or to terminate this
Agreement. Whenever a vacancy in the number of Administrative Trustees shall
occur, until such vacancy is filled by the appointment of an Administrative
Trustee in accordance with Section 5.7, the Administrative Trustees in office,
regardless of their number, shall have all the powers granted to the
Administrative Trustees and shall discharge all the duties imposed upon the
Administrative Trustees by this Agreement.
SECTION 5.10 Meetings.
If there is more than one Administrative Trustee, meetings of the
Administrative Trustees shall be held from time to time upon the call of any
Administrative Trustee. Regular meetings of the Administrative Trustees may be
held at a time and place fixed by resolution of the Administrative Trustees.
Notice of any in-person meetings of the Administrative Trustees shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 24 hours before such meeting. Notice of
any telephonic meetings of the Administrative Trustees or any committee thereof
shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of an Administrative Trustee at a meeting shall constitute a waiver
of notice of such meeting except where an Administrative Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Agreement, any action of the Administrative Trustees
may be taken at a meeting by vote of a majority of the Administrative Trustees
present (whether in person or by telephone) and eligible to vote with respect to
such matter, provided that a Quorum is present, or without a meeting by the
unanimous written consent of the Administrative Trustees. In the event there is
only one Administrative Trustee, any and all action of such Administrative
Trustee shall be evidenced by a written consent of such Administrative Trustee.
SECTION 5.11 Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission; and
(b) The Administrative Trustees shall have power to delegate from time
to time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Administrative Trustees or
34
41
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
this Agreement.
SECTION 5.12 Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Property Trustee or the Delaware Trustee or
any Administrative Trustee that is not a natural person, as the case may be, may
be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Property
Trustee or the Delaware Trustee, as the case may be, shall be a party, or any
Person succeeding to all or substantially all the corporate trust business of
the Property Trustee or the Delaware Trustee, as the case may be, shall be the
successor of the Property Trustee or the Delaware Trustee, as the case may be,
hereunder, provided 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; provided, however, such successor shall
notify the Sponsor and the Trust promptly of its succession.
SECTION 5.13 Compensation.
The Sponsor agrees:
(a) to pay to the Property Trustee and the Delaware Trustee from time
to time such compensation as shall be agreed in writing between the Company and
the Property Trustee and the Delaware Trustee, respectively, 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); and
(b) to reimburse the Property Trustee and the Delaware Trustee upon
their request for reasonable expenses, disbursements and advances incurred or
made by the Property Trustee or the Delaware Trustee, respectively, in
accordance with any provision of this Agreement (including the reasonable
compensation and the expenses and advances of its agents and counsel), except
any such expense or advance as may be attributable to their negligence, willful
misconduct or bad faith.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions in accordance with the applicable
terms of the relevant Holder's Securities. Distributions shall be made on the
Preferred Securities and the Common Securities in accordance with the respective
terms and preferences set forth herein and in Annex I. If and to the extent that
the Debenture Issuer makes a payment of interest (including
35
42
any compounded interest and additional interest), premium and/or principal on
the Debentures held by the Property Trustee (the amount of any such payment
being a "Payment Amount"), the Property Trustee shall and is directed, to the
extent funds are available for that purpose, to make a distribution (a
"Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Administrative Trustees shall on behalf of the Trust issue one
class of preferred securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the
"Preferred Securities") and one class of common securities representing
undivided beneficial interests in the assets of the Trust having such terms as
are set forth in Annex I (the "Common Securities"). The Trust shall issue no
securities or other interests in the assets of the Trust other than the
Preferred Securities and the Common Securities.
(b) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this Agreement, the
Securities so issued shall be validly issued, fully paid and non-assessable.
(d) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Agreement, shall
be deemed to have expressly assented and agreed to the terms of, and shall be
bound by, this Agreement.
SECTION 7.2 Execution and Authentication.
(a) The Securities shall be signed on behalf of the Trust by an
Administrative Trustee. In case any Administrative Trustee of the Trust who
shall have signed any of the Securities shall cease to be such Administrative
Trustee before the Securities so signed shall be delivered by the Trust, such
Securities nevertheless may be delivered as though the Person who signed such
Securities had not ceased to be such Administrative Trustee; and any Securities
may be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Administrative Trustees of the Trust,
although at the date of the execution and delivery of this Agreement any such
person was not an Administrative Trustee.
(b) One Administrative Trustee shall sign the Preferred Securities for
the Trust by manual or facsimile signature.
36
43
A Preferred Security shall not be valid until authenticated by the
manual signature of an authorized signatory of the Property Trustee. The
signature shall be conclusive evidence that the Preferred Security has been
authenticated under this Agreement. A Common Security shall be valid upon
execution by an Administrative Trustee without any act of the Property Trustee.
Upon a written order of the Trust signed by one Administrative Trustee,
the Property Trustee shall authenticate the Preferred Securities for original
issue.
The aggregate number of Preferred Securities outstanding at any time
shall not exceed the number set forth in the terms in Annex I hereto except as
provided in Section 7.6.
The Property Trustee may appoint an authenticating agent acceptable to
the Trust to authenticate Preferred Securities. An authenticating agent may
authenticate Preferred Securities whenever the Property Trustee may do so. Each
reference in this Agreement to authentication by the Property Trustee includes
authentication by such agent. An authenticating agent has the same rights as the
Property Trustee hereunder with respect to the Sponsor or an Affiliate.
SECTION 7.3 Form and Dating.
The Preferred Securities and the Property Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-1 and the Common
Securities shall be substantially in the form of Exhibit A-2, each of which is
hereby incorporated in and expressly made a part of this Agreement. The
Securities may be in definitive or global form and may be printed, lithographed
or engraved or may be produced in any other manner as is reasonably acceptable
to an Administrative Trustee, as evidenced by the execution thereof. The
Securities may have letters, CUSIP or other numbers, notations or other marks of
identification or designation and such legends or endorsements required by law,
stock exchange or quotation system rule, agreements to which the Trust is
subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Trust). An Administrative Trustee, at
the direction of the Sponsor, shall furnish any such legend not contained in
Exhibits A-1 or A-2 to the Property Trustee in writing. Each Preferred Security
shall be dated the date of its authentication. The terms and provisions of the
Securities set forth in Annex I and the forms of Securities set forth in
Exhibits A-1 and A-2 are part of the terms of this Agreement and to the extent
applicable, the Property Trustee and the Sponsor, by their execution and
delivery of this Agreement, expressly agree to such terms and provisions and to
be bound thereby.
The following four paragraphs shall apply only to any Global Preferred
Securities:
The Preferred Securities shall be issued in the form of one or more
permanent global Securities in definitive, fully registered form without
Distribution coupons with the appropriate global legends set forth in Exhibit
A-1 hereto (a "Global Preferred Security"), which shall be deposited on behalf
of the purchasers of the Preferred Securities represented thereby
37
44
with the Property Trustee, as custodian for the Clearing Agency, and registered
in the name of the Clearing Agency or a nominee of the Clearing Agency, duly
executed by the Trust and authenticated by the Property Trustee as hereinafter
provided. The number of Preferred Securities represented by the Global Preferred
Security may from time to time be increased or decreased by adjustments made on
the records of the Property Trustee and the Clearing Agency or its nominee as
hereinafter provided. The Holder of a Global Preferred Security may grant
proxies and otherwise authorize any Person, including Participants and Persons
that may hold interests through Participants, to take any action which such
Holder is entitled to take under this Agreement or the Securities.
An Administrative Trustee shall execute and the Property Trustee shall,
in accordance with this Section 7.3, authenticate and make available for
delivery initially one or more Global Preferred Securities that (i) shall be
registered in the name of Cede & Co. or other nominee of such Clearing Agency
and (ii) shall be delivered by the Property Trustee to such Clearing Agency or
pursuant to such Clearing Agency's written instructions or held by the Property
Trustee as custodian for the Clearing Agency.
Members of, or participants in, the Clearing Agency ("Participants")
shall have no rights under this Agreement with respect to any Global Preferred
Security held on their behalf by the Clearing Agency or by the Property Trustee
as the custodian of the Clearing Agency or under such Global Preferred Security,
and the Clearing Agency may be treated by the Trust, the Property Trustee and
any agent of the Trust or the Property Trustee as the absolute owner of such
Global Preferred Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Trust, the Property Trustee or any
agent of the Trust or the Property Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Clearing Agency or
impair, as between the Clearing Agency and its Participants, the operation of
customary practices of such Clearing Agency governing the exercise of the rights
of a holder of a beneficial interest in any Global Preferred Security.
Except as provided in Section 9.2, owners of beneficial interests in a
Global Preferred Security will not be entitled to receive physical delivery of
Preferred Securities in definitive form ("Definitive Preferred Securities").
SECTION 7.4 Registrar and Paying Agent.
The Trust shall maintain in the Borough of Manhattan, The City of New
York, (i) an office or agency where Preferred Securities may be presented for
registration of transfer ("Registrar") and (ii) an office or agency where
Preferred Securities may be presented for payment ("Paying Agent") [ and (iii)
an office or agency where Preferred Securities may be presented for conversion
or exchange ("Conversion Agent")]. The Registrar shall keep a register of the
Preferred Securities and of their transfer. The Trust may appoint the Registrar
and the Paying Agent [and the Conversion Agent] and may appoint one or more
co-registrars and one or more additional paying agents [and conversion agents]
in such other locations as it shall determine. The term "Registrar" includes any
additional registrar and the term "Paying Agent"
38
45
includes any additional paying agent [and the term "Conversion Agent" includes
any additional conversion agent]. The Trust may change any Registrar or Paying
Agent [or Conversion Agent] without prior notice to any Holder. The
Administrative Trustees shall notify the Property Trustee of the name and
address of any Agent not a party to this Agreement. If the Trust fails to
appoint or maintain another entity as Registrar or Paying Agent [or Conversion
Agent], the Property Trustee shall act as such, and as Paying Agent the Property
Trustee shall have the rights set forth in Section 3.8(i). The Trust or any of
its Affiliates may act as Registrar or Paying Agent [or Conversion Agent]. The
Trust shall act as Registrar and Paying Agent [and Conversion Agent] for the
Common Securities.
Any Paying Agent shall be permitted to resign as Paying Agent
upon 30 days' prior written notice to the Property Trustee, the Administrative
Trustees and the Sponsor. In the event that the Property Trustee shall no longer
be the Paying Agent, the Trust shall appoint a successor Paying Agent (which
shall be a bank or trust company acceptable to the Sponsor) to act as Paying
Agent.
The Trust initially appoints the Property Trustee as Registrar
and Paying Agent [and Conversion Agent] for the Preferred Securities.
SECTION 7.5 Paying Agent to Hold Money in Trust.
The Trust shall require each Paying Agent other than the Property
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Property Trustee all money held by the Paying Agent
for the payment of liquidation amounts or Distributions on the Securities and
will notify the Property Trustee if there are insufficient funds for such
purpose. While any such insufficiency continues, the Property Trustee may
require a Paying Agent to pay all money held by it to the Property Trustee. The
Trust at any time may require a Paying Agent to pay all money held by it to the
Property Trustee and to account for any money disbursed by it. Upon payment over
to the Property Trustee, the Paying Agent (if other than the Trust or an
Affiliate of the Trust) shall have no further liability for the money. If the
Trust or the Sponsor or an Affiliate of the Trust or the Sponsor acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
the Holders all money held by it as Paying Agent.
SECTION 7.6 Replacement Securities.
If a Holder of a Security claims that a Security owned by it has been
lost, destroyed or wrongfully taken or if such Security is mutilated and is
surrendered to the Trust or, in the case of the Preferred Securities, to the
Property Trustee, an Administrative Trustee shall execute and the Property
Trustee shall authenticate and make available for delivery a replacement
Security if the Property Trustee's and the Trust's requirements, as the case may
be, are met. An indemnity bond must be provided by the Holder which, in the
judgment of the Property Trustee, is sufficient to protect the Trustees, the
Sponsor or any authenticating agent
39
46
from any loss which any of them may suffer if a Security is replaced. The Trust
may charge such Holder for its expenses in replacing a Security.
Every replacement Security is an additional beneficial
interest in the Trust.
SECTION 7.7 Outstanding Preferred Securities.
The Preferred Securities outstanding at any time are all the Preferred
Securities authenticated by the Property Trustee except for those cancelled by
it, those delivered to it for cancellation, and those described in this Section
as not outstanding.
If a Preferred Security is replaced, paid or purchased pursuant to
Section 7.6 hereof, it ceases to be outstanding unless the Property Trustee
receives proof satisfactory to it that the replaced, paid or purchased Preferred
Security is held by a bona fide purchaser.
If Preferred Securities are considered paid in accordance with the
terms of this Agreement, they cease to be outstanding and Distributions thereon
shall cease to accumulate.
A Preferred Security does not cease to be outstanding because the
Trust, the Sponsor or an Affiliate of the Sponsor holds such Preferred Security.
SECTION 7.8 Preferred Securities in Treasury.
In determining whether the Holders of the required amount of Preferred
Securities have concurred in any direction, waiver or consent, Preferred
Securities owned by the Trust, the Sponsor or an Affiliate of the Sponsor, as
the case may be, shall be disregarded and deemed not to be outstanding, except
that for the purposes of determining whether the Property Trustee shall be fully
protected in relying on any such direction, waiver or consent, only Preferred
Securities which a Responsible Officer of the Property Trustee actually knows
are so owned shall be so disregarded.
SECTION 7.9 Temporary Securities.
Until Definitive Securities are ready for delivery, the Administrative
Trustees may prepare and, in the case of the Preferred Securities, the Property
Trustee shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of Definitive Securities but may have variations that
the Trust considers appropriate for temporary Securities. Without unreasonable
delay, the Administrative Trustees shall prepare and, in the case of the
Preferred Securities, the Property Trustee shall authenticate Definitive
Securities in exchange for temporary Securities.
SECTION 7.10 Cancellation.
The Trust at any time may deliver Preferred Securities to the Property
Trustee for cancellation. The Registrar and Paying Agent shall forward to the
Property Trustee any
40
47
Preferred Securities surrendered to them for registration of transfer,
redemption, exchange [, conversion] or payment. The Property Trustee shall
promptly cancel all Preferred Securities surrendered for registration of
transfer, redemption, exchange, payment, replacement [, conversion] or
cancellation and shall dispose of cancelled Preferred Securities as the Trust
directs, provided that the Property Trustee shall not be obligated to destroy
Preferred Securities. The Trust may not issue new Preferred Securities to
replace Preferred Securities that it has paid or redeemed or that have been
delivered to the Property Trustee for cancellation or that any Holder has
exchanged [or converted].
SECTION 7.11 CUSIP Numbers.
The Trust, in issuing the Preferred Securities, may use "CUSIP" numbers
(if then generally in use), and, if so, the Property Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders of Preferred
Securities; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Preferred
Securities or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Preferred
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Sponsor will promptly notify the Property Trustee
of any change in the CUSIP numbers.
41
48
ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1 Dissolution of Trust.
(a) The Trust shall automatically dissolve upon the first to occur
of the following events:
(i) the bankruptcy of the Sponsor;
(ii) (A) the filing of a certificate of dissolution or liquidation
or its equivalent with respect to the Sponsor or (B) the revocation of the
Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) the distribution of a Like Amount of the Debentures to the
Holders of the Securities, provided that the Property Trustee has received
written notice from the Sponsor directing the Property Trustee to dissolve
the Trust (which direction is optional and, except as otherwise expressly
provided herein, within the discretion of the Sponsor), and provided,
further, that such dissolution is conditioned on the receipt by the
Administrative Trustees' receipt of an opinion of an independent tax
counsel experienced in such matters (a "No Recognition Opinion") to the
effect that the Holders of the Securities will not recognize any gain or
loss for United States Federal income tax purposes as a result of the
dissolution of the Trust and the distribution of the Debentures;
(iv) the entry of a decree of judicial dissolution of the Trust by a
court of competent jurisdiction;
(v) the [conversion, exchange or] redemption of all of the
Securities and the payment to the Holders of any and all amounts necessary
therefor, all in accordance with the terms of the Securities; or
(vi) the expiration of the term of the Trust provided in Section
3.14.
(b) As soon as is practicable upon completion of winding up of the
Trust following the occurrence of an event referred to in Section 8.1(a), the
Administrative Trustees shall terminate the Trust by filing a certificate of
cancellation with the Secretary of State of the State of Delaware in accordance
with the Business Trust Act.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
42
49
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Agreement and in the
terms of the Securities. To the fullest extent permitted by law, any transfer or
purported transfer of any Security not made in accordance with this Agreement
shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be freely
transferable.
(c) To the fullest extent permitted by law, the Sponsor may not
transfer the Common Securities except for any transfer (whether voluntarily or
by operation of law) permitted under Article 5 of the Indenture.
(d) The Administrative Trustees shall provide for the registration
of Securities and of the transfer of Securities, which will be effected without
charge but only upon payment (with such indemnity as the Administrative Trustees
may require) in respect of any tax or other governmental charges that may be
imposed in relation to it. Upon surrender for registration of transfer of any
Securities, the Administrative Trustees shall cause one or more new Securities
to be issued in the name of the designated transferee or transferees. Every
Security surrendered for registration of transfer or exchange [or for
conversion,] shall be accompanied by a written instrument of transfer in form
satisfactory to the Administrative Trustees duly executed by the Holder or such
Holder's attorney duly authorized in writing. Each Security surrendered for
registration of transfer [or for conversion,] shall be canceled by the
Administrative Trustees. A transferee of a Security shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Security. By acceptance of a Security, each transferee
shall be deemed to have agreed to be bound by this Agreement.
SECTION 9.2 Transfer Procedures and Restrictions
(a) Transfer and Exchange of Definitive Preferred Securities. When
Definitive Preferred Securities are presented to the Registrar:
(x) to register the transfer of such Definitive Preferred
Securities; or
(y) to exchange such Definitive Preferred Securities which became
mutilated, destroyed, defaced, stolen or lost, for an equal liquidation
amount of Definitive Preferred Securities,
the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
that the Definitive Preferred Securities surrendered for transfer or exchange
shall be duly endorsed or accompanied by a
43
50
written instrument of transfer in form reasonably satisfactory to the Property
Trustee and the Registrar, duly executed by the Holder thereof or his attorney
duly authorized in writing.
(b) Transfer of a Definitive Preferred Security for a Beneficial
Interest in a Global Preferred Security. Upon receipt by the Property Trustee of
a Definitive Preferred Security, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Property Trustee, together
with written instructions directing the Property Trustee to make, or to direct
the Clearing Agency to make, an adjustment on its books and records with respect
to the Global Preferred Security to reflect an increase in the Liquidation
Amount of the Preferred Securities represented by such Global Preferred
Security, then the Property Trustee shall cancel such Definitive Preferred
Security and cause, or direct the Clearing Agency to cause, the aggregate
Liquidation Amount of Preferred Securities represented by the appropriate Global
Preferred Security to be increased accordingly. If no Global Preferred
Securities are then outstanding, an Administrative Trustee shall execute on
behalf of the Trust and the Property Trustee shall authenticate, upon written
order of any Administrative Trustee, a Global Preferred Security representing an
appropriate Liquidation Amount of Preferred Securities.
(c) Transfer and Exchange of Global Preferred Securities. Subject to
Section 9.2(d), the transfer and exchange of Global Preferred Securities or
beneficial interests therein shall be effected through the Clearing Agency in
accordance with this Agreement and the procedures of the Clearing Agency
therefor.
(d) Transfer of a Beneficial Interest in a Global Preferred Security
for a Definitive Preferred Security.
(i) A Global Preferred Security deposited with the Clearing Agency
or with the Property Trustee as custodian for the Clearing Agency pursuant
to Section 7.3 shall be transferred to the beneficial owners thereof in
the form of Definitive Preferred Securities only if such transfer complies
with Section 9.2(c) and (1) the Clearing Agency notifies the Trust that it
is unwilling or unable to continue as Clearing Agency for such Global
Preferred Security or if at any time such Clearing Agency ceases to be a
"clearing agency" registered under the Exchange Act and, in each case, a
clearing agency is not appointed by the Sponsor within 90 days of receipt
of such notice or of becoming aware of such condition, (2) a Default or an
Event of Default has occurred and is continuing or (3) the Trust at its
sole discretion elects to cause the issuance of Definitive Preferred
Securities.
(ii) Any Global Preferred Security that is transferable to the
beneficial owners thereof in the form of Definitive Preferred Securities
pursuant to this Section 9.2(d) shall be surrendered by the Clearing
Agency to the Property Trustee located in the Borough of Manhattan, The
City of New York, to be so transferred, in whole or from time to time in
part, without charge, and the Property Trustee shall authenticate and make
available for delivery, upon such transfer of each portion of such Global
Preferred Security, an equal aggregate Liquidation Amount of Securities of
authorized denominations in the form of
44
51
Definitive Preferred Securities. Any portion of a Global Preferred
Security transferred pursuant to this Section shall be registered in such
names as the Clearing Agency shall direct.
In the event of the occurrence of any of the events specified in clause
(i) above, the Administrative Trustees will promptly make available to the
Property Trustee a reasonable supply of Definitive Preferred Securities in fully
registered form without Distribution coupons.
(e) Restrictions on Transfer and Exchange of Global Preferred
Securities. Notwithstanding any other provisions of this Agreement (other than
the provisions set forth in subsection (d) of this Section 9.2), a Global
Preferred Security may not be transferred as a whole except by the Clearing
Agency to a nominee of the Clearing Agency or another nominee of the Clearing
Agency or by the Clearing Agency or any such nominee to a successor Clearing
Agency or a nominee of such successor Clearing Agency.
(f) Cancellation or Adjustment of Global Preferred Security. At such
time as all beneficial interests in a Global Preferred Security have either been
exchanged for Definitive Preferred Securities to the extent permitted by this
Agreement or redeemed, repurchased [, converted or otherwise exchanged] or
canceled in accordance with the terms of this Agreement, such Global Preferred
Security shall be returned to the Clearing Agency for cancellation or retained
and canceled by the Property Trustee. At any time prior to such cancellation, if
any beneficial interest in a Global Preferred Security is exchanged for
Definitive Preferred Securities, Preferred Securities represented by such Global
Preferred Security shall be reduced and an adjustment shall be made on the books
and records of the Property Trustee (if it is then the custodian for such Global
Preferred Security) with respect to such Global Preferred Security, by the
Property Trustee or the Securities Custodian, to reflect such reduction.
(g) Obligations with Respect to Transfers and Exchanges of Preferred
Securities.
(i) To permit registrations of transfers and exchanges, an
Administrative Trustee shall execute and the Property Trustee shall
authenticate Definitive Preferred Securities and Global Preferred
Securities at the Registrar's request in accordance with the terms of this
Agreement.
(ii) Registrations of transfers or exchanges will be effected
without charge, but only upon payment (with such indemnity as the Trust or
the Sponsor may require) in respect of any tax or other governmental
charge that may be imposed in relation to it.
(iii) The Registrar shall not be required to register the transfer
of or exchange of (a) Preferred Securities during a period beginning at
the opening of business 15 days before the day of mailing of a notice of
redemption or any notice of selection of Preferred Securities for
redemption and ending at the close of business on the day of such mailing;
or (b) any Preferred Security so selected for redemption in whole or in
part, except the unredeemed portion of any Preferred Security being
redeemed in part.
45
52
(iv) All Preferred Securities issued upon any registration of
transfer or exchange pursuant to the terms of this Agreement shall
evidence the same security and shall be entitled to the same benefits
under this Agreement as the Preferred Securities surrendered upon such
registration of transfer or exchange.
(h) No Obligation of the Property Trustee.
(i) The Property Trustee shall have no responsibility or obligation
to any beneficial owner of a Global Preferred Security, a Participant in
the Clearing Agency or other Person with respect to the accuracy of the
records of the Clearing Agency or its nominee or of any Participant
thereof, with respect to any ownership interest in the Preferred
Securities or with respect to the delivery to any Participant, beneficial
owner or other Person (other than the Clearing Agency) of any notice
(including any notice of redemption) or the payment of any amount, under
or with respect to such Preferred Securities. All notices and
communications to be given to the Holders and all payments to be made to
Holders under the Preferred Securities shall be given or made only to or
upon the order of the Holders (which shall be the Clearing Agency or its
nominee in the case of a Global Preferred Security). The rights of
beneficial owners in any Global Preferred Security shall be exercised only
through the Clearing Agency subject to the applicable rules and procedures
of the Clearing Agency. The Property Trustee may conclusively rely and
shall be fully protected in relying upon information furnished by the
Clearing Agency or any agent thereof with respect to its Participants and
any beneficial owners.
(ii) The Property Trustee and Registrar shall have no obligation or
duty to monitor, determine or inquire as to compliance with any
restrictions on transfer imposed under this Agreement or under applicable
law with respect to any transfer of any interest in any Preferred Security
(including any transfers between or among Clearing Agency Participants or
beneficial owners in any Global Preferred Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the
terms of this Agreement, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
SECTION 9.3 Deemed Security Holders.
The Trust, the Trustees, the Registrar and the Paying Agent may
treat the Person in whose name any Security shall be registered on the books and
records of the Trust as the sole owner and Holder of such Security for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Security on the part of any Person other than such Holder,
regardless of any notice to the contrary.
46
53
SECTION 9.4 Book Entry Interests.
Global Preferred Securities shall initially be registered on the
books and records of the Trust in the name of Cede & Co., the nominee of the
Clearing Agency, and no Preferred Security Beneficial Owner will receive a
definitive Preferred Security Certificate representing such Preferred Security
Beneficial Owner's interests in such Global Preferred Securities, except as
provided in Section 9.2. Unless and until Definitive Preferred Securities have
been issued to the Preferred Security Beneficial Owners pursuant to Section 9.2:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Agreement (including the payment
of Distributions on the Global Preferred Securities and receiving
approvals, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Certificates and shall have
no obligation to the Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Agreement, the provisions of this
Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security
Beneficial Owners and the Clearing Agency and/or the Participants,
including receiving and transmitting payments of Distributions on the
Global Certificates to such Participants. DTC will make book entry
transfers among the Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred Security
Holders is required to be given by a Trustee under this Agreement, such Trustee
shall give all such notices and communications specified herein to be given to
the Holders of Global Preferred Securities to the Clearing Agency and shall have
no notice obligations to the Preferred Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the
Administrative Trustees may, in their sole discretion, appoint a successor
Clearing Agency with respect to the Preferred Securities.
47
54
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Agreement, the Securities
Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon dissolution of the Trust or otherwise.
(b) The Sponsor shall be liable for all of the debts and obligations
of the Trust (other than with respect to the Securities) to the extent not
satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of the Preferred Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Agreement or by law,
except that this provision shall not be deemed to modify Section 3.9(b).
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
48
55
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Agreement shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Agreement. The provisions of
this Agreement, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Property Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Person and any Indemnified Person; or
(ii) whenever this Agreement or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a
manner that is, or provides terms that are, fair and reasonable to the
Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Agreement or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Agreement an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no duty
or obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Agreement or by
applicable law.
49
56
SECTION 10.4 Indemnification.
(a)(i) The Sponsor shall indemnify, to the full extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of the
fact that he is or was a Company Indemnified Person against expenses
(including attorneys' fees and expenses), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the Company
Indemnified Person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit
by or in the right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees and expenses) actually and reasonably
incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Trust and
except that no such indemnification shall be made in respect of any claim,
issue or matter as to which such Company Indemnified Person shall have
been adjudged to be liable to the Trust unless and only to the extent that
the Court of Chancery of Delaware or the court in which such action or
suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the
case, such Company Indemnified Person is fairly and reasonably entitled to
indemnity for such expenses which such Court of Chancery or such other
court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full
extent permitted by law, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
50
57
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Sponsor
only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set
forth in paragraphs (i) and (ii). Such determination shall be made (1) by
the Administrative Trustees by a majority vote of a Quorum consisting of
such Administrative Trustees who were not parties to such action, suit or
proceeding, (2) if such a Quorum is not obtainable, or, even if
obtainable, if a Quorum of disinterested Administrative Trustees so
directs, by independent legal counsel in a written opinion, or (3) by the
Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees and expenses) incurred by a
Company Indemnified Person in defending a civil, criminal, administrative
or investigative action, suit or proceeding referred to in paragraphs (i)
and (ii) of this Section 10.4(a) shall be paid by the Sponsor in advance
of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such Company Indemnified Person to
repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Sponsor as authorized in this Section
10.4(a). Notwithstanding the foregoing, no advance shall be made by the
Sponsor if a determination is reasonably and promptly made (1) by the
Administrative Trustees by a majority vote of a Quorum of disinterested
Administrative Trustees, (2) if such a Quorum is not obtainable, or, even
if obtainable, if a quorum of disinterested Administrative Trustees so
directs, by independent legal counsel in a written opinion or (3) by the
Common Security Holder of the Trust, that, based upon the facts known to
the Administrative Trustees, counsel or the Common Security Holder at the
time such determination is made, such Company Indemnified Person acted in
bad faith or in a manner that such Person did not believe to be in or not
opposed to the best interests of the Trust, or, with respect to any
criminal proceeding, that such Company Indemnified Person believed or had
reasonable cause to believe his conduct was unlawful. In no event shall
any advance be made in instances where the Administrative Trustees,
independent legal counsel or Common Security Holder reasonably determine
that such person deliberately breached his duty to the Trust or its Common
or Preferred Security Holders.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall
not be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Sponsor
or Preferred Security Holders of the Trust or otherwise, both as to action
in his official capacity and as to action in another capacity while
holding such office. All rights to indemnification under this Section
10.4(a) shall be deemed to be provided by a contract between the Sponsor
and each Company Indemnified Person who serves in such capacity at any
time while this Section 10.4(a) is in effect. Any repeal or modification
of this Section 10.4(a) shall not affect any rights or obligations then
existing.
51
58
(vii) The Sponsor or the Trust may purchase and maintain insurance
on behalf of any Person who is or was a Company Indemnified Person against
any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the Sponsor
would have the power to indemnify him against such liability under the
provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity,
any constituent entity (including any constituent of a constituent)
absorbed in a consolidation or merger, so that any person who is or was a
director, trustee, officer or employee of such constituent entity, or is
or was serving at the request of such constituent entity as a director,
trustee, officer, employee or agent of another entity, shall stand in the
same position under the provisions of this Section 10.4(a) with respect to
the resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a Person who has ceased to be
a Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Sponsor agrees to indemnify the (i) Property Trustee, (ii)
the Delaware Trustee, (iii) any Affiliate of the Property Trustee and the
Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Property Trustee and the Delaware Trustee (each of the Persons in (i) through
(iv) being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense including taxes (other than taxes based on the income
of such Fiduciary Indemnified Person) incurred without negligence, willful
misconduct or bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses (including reasonable legal fees and expenses) of defending
itself against or investigating any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. With respect
to the Property Trustee, this provision shall not be deemed to modify Section
3.9(b) or the Trust Indenture Act. The obligation to indemnify as set forth in
this Section 10.4(b) shall survive the resignation or removal of the Property
Trustee or the Delaware Trustee and the satisfaction and discharge of this
Agreement.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee (subject to Section 5.3(c)) may engage in or possess an
interest in other business ventures of any nature or description, independently
or with others, similar or dissimilar to the business of the Trust, and the
Trust and the Holders of Securities shall have no rights by virtue of this
Agreement in and to such independent ventures or the income or profits derived
therefrom, and the pursuit of any such venture, even if competitive with the
business of the Trust, shall not be
52
59
deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Property Trustee shall be obligated to present any particular
investment or other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the Trust, and any
Covered Person, the Sponsor, the Delaware Trustee and the Property Trustee shall
have the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the Property Trustee
may engage or be interested in any financial or other transaction with the
Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee
or agent for, or act on any committee or body of holders of, securities or other
obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Administrative Trustees shall keep, or cause to be kept, full books of account,
records and supporting documents, which shall reflect in reasonable detail, each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States Federal income tax purposes. The books of account
and the records of the Trust shall be examined by and reported upon as of the
end of each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Administrative Trustees.
(b) The Administrative Trustees shall cause to be prepared and
delivered to each of the Holders of Securities, within 90 days after the end of
each Fiscal Year of the Trust, annual financial statements of the Trust,
including a balance sheet of the Trust as of the end of such Fiscal Year, and
the related statements of income or loss.
(c) The Administrative Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, any annual United States Federal
income tax information statement, required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Administrative Trustees shall
endeavor to deliver all such information statements within 30 days after the end
of each Fiscal Year of the Trust.
(d) The Administrative Trustees shall cause to be duly prepared and
filed with the appropriate taxing authority, an annual United States Federal
income tax return, on a Form 1041
53
60
or such other form required by United States Federal income tax law, and any
other annual income tax returns required to be filed by the Administrative
Trustees on behalf of the Trust with any state or local taxing authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and
for the sole benefit of the Trust; provided, however, that all payments of funds
in respect of the Debentures held by the Property Trustee shall be made directly
to the Property Trustee Account and no other funds of the Trust shall be
deposited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Administrative Trustees; provided, however,
that the Property Trustee shall designate the signatories for the Property
Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Administrative Trustees shall comply with all
withholding requirements under United States Federal, state and local law. The
Trust shall request, and the Holders shall provide to the Trust, such forms or
certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably be
requested by the Administrative Trustees to assist them in determining the
extent of, and in fulfilling, the Trust's withholding obligations. The
Administrative Trustees shall file required forms with applicable jurisdictions
and, unless an exemption from withholding is properly established by a Holder,
shall remit amounts withheld with respect to the Holder to applicable
jurisdictions. To the extent that the Trust is required to withhold and pay over
any amounts to any authority with respect to Distributions or allocations to any
Holder, the amount withheld shall be deemed to be a Distribution in the amount
of the withholding to the Holder. In the event of any claim of excess
withholding, Holders shall be limited to an action against the applicable
jurisdiction. If the amount required to be withheld was not withheld from actual
Distributions made, the Trust may reduce subsequent Distributions by the amount
of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Agreement or by any
applicable terms of the Securities, this Agreement may only be amended by a
written instrument approved and executed by:
54
61
(i) the Sponsor and the Administrative Trustees (or, if there are
more than two Administrative Trustees, a majority of the Administrative
Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the Property Trustee;
and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee.
(b) No amendment shall be made, and any such purported amendment
shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the Property
Trustee shall have first received an Officers' Certificate from each of
the Trust and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Agreement (including the terms of the
Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Property Trustee,
the Property Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Agreement (including the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the Sponsor
or the Trust) that such amendment is permitted by, and conforms to,
the terms of this Agreement (including the terms of the Securities)
and that all conditions precedent to the execution and delivery of
such amendment have been satisfied; and
(iii) to the extent the result of such amendment would:
(A) cause the Trust to fail to be classified for purposes of
United States Federal income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers of the
Property Trustee in contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act.
(c) At such time after the Trust has issued any Securities that
remain outstanding, any amendment that would adversely affect the rights,
privileges or preferences of any Holder of the Securities may be effected only
with such additional requirements as may be set forth in the
55
62
terms of such Securities; provided, however, that, without the consent of each
Holder of the Securities, this Agreement may not be amended to (i) change the
Distribution rate (or manner of calculation of the Distribution rate), amount,
timing or currency or otherwise adversely affect the method of any required
payment, (ii) change the purposes of the Trust, (iii) authorize the issuance of
any additional beneficial interests in the Trust, (iv) change the [conversion,
exchange or] redemption provisions, (v) change the conditions precedent for the
Sponsor to elect to dissolve the Trust and distribute the Debentures to the
Holders of the Securities, (vi) change the Liquidation Distribution or other
provisions relating to the distribution of amounts payable upon the dissolution
and liquidation of the Trust, (vii) affect the limited liability of any Holder
of the Securities or (viii) restrict the right of a Holder of the Securities to
institute suit for the enforcement of any required payment on or after the due
date therefor (or in the case of redemption, on the Redemption Date) [or for the
conversion or the exchange of Securities in accordance with their terms].
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities.
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in Liquidation Amount of the Common Securities.
(f) The rights of the Holders of the Common Securities under Article
V to increase or decrease the number of, and to appoint and remove, Trustees
shall not be amended without the consent of the Holders of a Majority in
Liquidation Amount of the Common Securities.
(g) Notwithstanding Section 12.1(c), this Agreement may be amended
by the Sponsor and the Trustees without the consent of the Holders of the
Securities to:
(i) cure any ambiguity, correct or supplement any provision in this
Agreement that may be inconsistent with any other provision of this
Agreement or make any other provisions with respect to matters or
questions arising under this Agreement not inconsistent with any other
provisions of this Agreement;
(ii) modify, eliminate or add to any provisions of this Agreement to
such extent as shall be necessary to ensure that the Trust will be
classified for United States Federal income tax purposes as a grantor
trust at all times that any Securities are outstanding or to ensure that
the Trust will not be required to register as an Investment Company under
the Investment Company Act;
provided, however, that, in each case, such action shall not adversely affect in
any material respect the interests of the Holders of the Securities, and any
such amendments of this Agreement shall become effective when notice thereof is
given to the Holders of the Securities.
56
63
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Administrative Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Agreement, the terms of
the Securities or the rules of any stock exchange or quotation system or market
on which the Preferred Securities are listed or admitted for trading. The
Administrative Trustees shall call a meeting of the Holders of such class if
directed to do so by the Holders of at least 10% in Liquidation Amount of the
Securities of such class. Such direction shall be given by delivering to the
Administrative Trustees one or more notices in a writing stating that the
signing Holders of Securities wish to call a meeting and indicating the general
or specific purpose for which the meeting is to be called. Any Holders of
Securities calling a meeting shall specify in writing the security certificates
held by the Holders of Securities exercising the right to call a meeting and
only those Securities specified shall be counted for purposes of determining
whether the required percentage set forth in the second sentence of this
paragraph has been met.
(b) Whenever a vote, consent or approval of the Holders of
Securities is permitted or required under this Agreement or the rules of any
stock exchange or quotation system or market on which the Preferred Securities
are listed or admitted for trading, such vote, consent or approval may be given
at a meeting of the Holders of Securities. Any action that may be taken at a
meeting of the Holders of Securities may be taken without a meeting if a consent
in writing setting forth the action so taken is signed by the Holders of
Securities owning not less than the minimum amount of Securities in Liquidation
Amount that would be necessary to authorize or take such action at a meeting at
which all Holders of Securities having a right to vote thereon were present and
voting. Prompt notice of the taking of action without a meeting shall be given
to the Holders of Securities entitled to vote who have not consented in writing.
(c) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least seven days and not more
than 60 days before the date of such meeting. The Administrative Trustees
may specify that any written ballot submitted to the Security Holders for
the purpose of taking any action without a meeting shall be returned to
the Trust within the time specified by the Administrative Trustees;
(ii) each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of eleven months from the date thereof unless otherwise provided in the
proxy. Every proxy shall be revocable at the pleasure of the Holder of
Securities
57
64
executing it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation
and the Holders of the Securities were stockholders of a Delaware
corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Administrative Trustees or by such other Person that the
Administrative Trustees may designate; and
(iv) unless the Business Trust Act, this Agreement, the terms of the
Securities, the Trust Indenture Act or the listing rules of any stock
exchange or quotation system or market on which the Preferred Securities
are then listed or trading, otherwise provides, the Administrative
Trustees, in their sole discretion, shall establish all other provisions
relating to meetings of Holders of Securities, including notice of the
time, place or purpose of any meeting at which any matter is to be voted
on by any Holders of Securities, waiver of any such notice, action by
consent without a meeting, the establishment of a record date, quorum
requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee.
The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Agreement, and each
Successor Property Trustee represents and warrants, as applicable, to the Trust
and the Sponsor at the time of the Successor Property Trustee's acceptance of
its appointment as Property Trustee that:
(a) the Property Trustee is a banking corporation, a national
banking association or a bank or trust company, duly organized, validly existing
and in good standing under the laws of the United States or a State of the
United States, as the case may be, with corporate power and authority to execute
and deliver, and to carry out and perform its obligations under the terms of,
this Agreement;
(b) the execution, delivery and performance by the Property Trustee
of the Agreement have been duly authorized by all necessary corporate action on
the part of the Property Trustee. The Agreement has been duly executed and
delivered by the Property Trustee under New York law and constitutes a legal,
valid and binding obligation of the Property Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
58
65
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(c) the execution, delivery and performance of this Agreement by the
Property Trustee do not conflict with or constitute a breach of the charter or
by-laws of the Property Trustee; and
(d) no consent, approval or authorization of, or registration with
or notice to, any federal or New York State banking authority is required for
the execution, delivery or performance by the Property Trustee of this
Agreement.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Agreement, and each
Successor Delaware Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:
(a) the Delaware Trustee is a banking corporation, a national
banking association or a bank or trust company, duly organized, validly existing
and in good standing under the laws of the United States or the State of
Delaware, as the case may be, with corporate power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of, this
Agreement;
(b) the execution, delivery and performance by the Delaware Trustee
of this Agreement have been duly authorized by all necessary corporate action on
the part of the Delaware Trustee. This Agreement has been duly executed and
delivered by the Delaware Trustee under Delaware law and constitutes a legal,
valid and binding obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(c) the execution, delivery and performance of this Agreement by the
Delaware Trustee do not conflict with or constitute a breach of the charter or
by-laws of the Delaware Trustee;
(d) no consent, approval or authorization of, or registration with
or notice to, any Federal or Delaware banking authority governing the trust
powers of the Delaware Trustee is required for the execution, delivery or
performance by the Delaware Trustee of this Agreement; and
(e) the Delaware Trustee is a natural person who is a resident of
the State of Delaware or, if not a natural person, an entity which has its
principal place of business in the
59
66
State of Delaware, and is a Person that satisfies for the Trust Section 3807(a)
of the Business Trust Act.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Agreement shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Administrative Trustees at
the Trust's mailing address set forth below (or such other address as the Trust
may give notice of to the Holders of the Securities):
Hercules Trust III
c/o Hercules Incorporated
Hercules Plaza
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxx
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as Delaware Trustee may give notice of to the
Holders of the Securities):
Chase Manhattan Bank Delaware
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Department
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
(c) if given to the Property Trustee, at the Property Trustee's
mailing address set forth below (or such other address as the Property Trustee
may give notice of to the Holders of the Securities):
The Chase Manhattan Bank
One Xxxxxxx Xxxxx, 00xx Xxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Corporate Trust Department
60
67
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice to the Trust):
Hercules Incorporated
Hercules Plaza
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Vice-President and Treasurer, and
Corporate Secretary
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Agreement and the rights of the parties hereunder shall be
governed by and construed in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws, except that the rights, limitations of rights,
obligations, duties and immunities of the Property Trustee shall be governed by
and construed in accordance with the laws of the State of New York.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States Federal income tax purposes as a grantor trust. The
provisions of this Agreement shall be interpreted to further this intention of
the parties.
61
68
SECTION 14.4 Headings.
The Table of Contents, Cross-Reference Table and Headings contained
in this Agreement are inserted for convenience of reference only and do not
affect the interpretation of this Agreement or any provision hereof.
SECTION 14.5 Successors and Assigns.
Whenever in this Agreement any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Agreement by the Sponsor and
the Trustees shall bind and inure to the benefit of their respective successors
and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
If any provision of this Agreement, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Agreement, or the application of such provision to Persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
SECTION 14.7 Counterparts.
This Agreement may contain more than one counterpart of the
signature page and this Agreement may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
62
69
IN WITNESS WHEREOF, the undersigned have caused this Amended and
Restated Trust Agreement to be executed as of the day and year first above
written.
Xxxxxx X. Xxxxx, not in his individual
capacity but solely as Administrative
Trustee of the Trust
___________________________
Xxx X. Xxxx, not in her individual capacity
but solely as Administrative Trustee of the
Trust
___________________________
Xxxxxx X. Xxxxxx, not in his individual
capacity but solely as Administrative
Trustee of the Trust
___________________________
Chase Manhattan Bank Delaware, not in its
individual capacity but solely as Delaware
Trustee of the Trust
By:___________________________,
Name:
Title:
The Chase Manhattan Bank, not in its
individual capacity but solely as Property
Trustee of the Trust
By:___________________________,
Name:
Title:
63
70
HERCULES INCORPORATED,
as Sponsor
By:___________________________
Name:
Title:
64
71
ANNEX I
TERMS* OF
[_____%] [FLOATING RATE] PREFERRED SECURITIES
[_____%] [FLOATING RATE] COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Trust Agreement of
the Trust, dated as of _________, _____ (as amended from time to time, the
"Agreement"), the designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Preferred Securities and the Common Securities
(collectively, the "Securities") are set forth below (each capitalized term used
but not defined herein has the meaning set forth in the Agreement or, if not
defined in such Agreement, as defined in the Indenture):
1. Designation and Number.
(a) Preferred Securities. [Up to]_______ Preferred Securities of the
Trust, with an aggregate liquidation amount with respect to the assets of the
Trust of [up to] ________ dollars ($_________), and with a Liquidation Amount
with respect to the assets of the Trust of $ ___ per security, are hereby
designated for the purposes of identification only as "[___%] [Floating Rate]
Preferred Securities" (the "Preferred Securities"). The certificates evidencing
the Preferred Securities shall be substantially in the form of Exhibit A-1 to
the Agreement, with such changes and additions thereto or deletions therefrom as
may be required by ordinary usage, custom or practice or to conform to the rules
of any stock exchange or quotation system on which the Preferred Securities are
listed or quoted.
(b) Common Securities. [Up to]________ Common Securities of the Trust
with an aggregate Liquidation Amount with respect to the assets of the Trust of
[up to] ____________ dollars ($_________), and with a Liquidation Amount with
respect to the assets of the Trust of $____ per security, are hereby designated
for the purposes of identification only as "[____%] [Floating Rate] Common
Securities" (the "Common Securities"). The certificates evidencing the Common
Securities shall be substantially in the form of Exhibit A-2 to the Agreement,
with such changes and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice.
2. Distributions.
(a) Distributions on each Security will be payable at a rate per annum
of [___%] [equal to LIBOR plus ___%] (the "Distribution Rate") of the
liquidation amount of $_____ per Security (the "Liquidation Amount"), such rate
being the rate of interest payable on the Debentures to be held by the Property
Trustee. [LIBOR and the amount payable in respect of -------- * SUBJECT TO
ADDITIONAL OR ALTERNATIVE PROVISIONS IF ANY OF THE SECURITIES ARE SUBJECT TO
CONVERSION OR EXCHANGE.
I-1
72
a Distribution for a Distribution Period (as defined below) will be calculated
by the Calculation Agent in the same manner as LIBOR and the interest payable in
respect of each Interest Period for the Debentures, as set forth in the
Indenture.] Distributions in arrears for more than one ___________ period will
bear additional distributions thereon compounded ________ at the applicable
periodic Distribution Rate (to the extent permitted by applicable law). The term
"Distributions", as used herein, includes any such additional distributions
unless otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the Property Trustee and
to the extent the Property Trustee has funds legally available therefor.
(b) Distributions on the Securities will be cumulative, will accumulate
from the most recent date to which Distributions have been paid or, if no
Distributions have been paid, from ____________ ,____, to but excluding the
related Distribution Date or Redemption Date (each defined below) and will be
payable ________ in arrears on _____________ of each year, commencing ________,
_____ (each, a "Distribution Date"), except as otherwise described below. The
amount of Distributions payable for any Distribution Period will be computed on
the basis of [a 360-day year consisting of twelve 30-day months] [the actual
number of days elapsed in such period and a year of 360 days]. "Distribution
Period" means the period from and including the immediately preceding
Distribution Date (or _______, ____ , in the case of the first Distribution
Period) to but excluding the applicable Distribution Date or Redemption Date. If
a Distribution Date is not a Business Day, then [such Distribution Date and the
first day of the Distribution Period commencing on such Distribution Date will
be the next succeeding Business Day, except if such Business Day is in the next
succeeding calendar month, such Distribution Date and the first day of such
Distribution Period will be the immediately preceding Business Day] [payments of
any Distributions payable on such date will be made on the next succeeding
Business Day, and no interest or other payment in respect of any such delay will
accumulate for the period to but excluding such Business Day].
As long as no Event of Default has occurred and is continuing under the
Indenture, the Debenture Issuer has the right under the Indenture to defer
payments of interest on the Debentures by extending the interest payment period
at any time and from time to time for a period not exceeding ______ consecutive
__________ periods (each __________ period as to which ___________ interest
payments have been deferred is referred to herein as an "Extension Period"),
provided that an Extension Period must end on an Interest Payment Date for the
Debentures and may not extend beyond the Stated Maturity Date or date of earlier
redemption for the Debentures. As a consequence of such deferral, Distributions
on the Securities will also be deferred during an Extension Period. Despite such
deferral, _________ Distributions will continue to accumulate with additional
interest thereon (to the extent permitted by applicable law but not at a rate
greater than the rate at which interest is then accruing on the Debentures) at
the Distribution Rate then in effect, compounded __________ during any Extension
Period. Prior to the termination of an Extension Period, the Debenture Issuer
may further defer payments of interest by further extending such Extension
Period; provided that an Extension Period, together with all such previous and
further extensions, may not exceed _____ consecutive ______
I-2
73
periods, must end on an Interest Payment Date for the Debentures and may not
extend beyond the Stated Maturity Date or date of earlier redemption for the
Debentures. At the end of an Extension Period, all accumulated and unpaid
Distributions (but only to the extent payments are made in respect of the
Debentures held by the Property Trustee and to the extent the Property Trustee
has funds legally available therefor) will be payable to the Holders as they
appear on the books and records of the Trust on the record date immediately
preceding the end of the Extension Period. Upon the termination of any Extension
Period (or any extension thereof) and the payment of all amounts then due, the
Debenture Issuer may commence a new Extension Period, subject to the foregoing
requirements.
(c) Distributions on a Distribution Date will be payable to the Holders
thereof as they appear on the books and records of the Trust on the_______ day
of the month [immediately preceding] [in which] such Distribution Date [occurs].
The relevant record dates for the Common Securities shall be the same as the
record dates for the Preferred Securities. Distributions payable on any
Securities that are not punctually paid or duly provided for on any Distribution
Date, as a result of the Debenture Issuer having failed to make a payment under
the Debentures, will cease to be payable to the Holder on the relevant record
date, and such defaulted Distributions will instead be payable to the Person in
whose name such Securities are registered on the Special Record Date or other
specified date determined in accordance with the Indenture.
[(d) ______________ shall act as Calculation Agent to determine LIBOR
and calculate the Distribution Rate of, and the amount of Distributions payable
on, the Securities for each Distribution Period pursuant to the terms set forth
herein and in the Securities.]
[(d)] [(e)] In the event that there is any money or other property held
by or for the Trust that is not accounted for hereunder, such property shall be
distributed on a Pro Rata (as defined herein) basis among the Holders of the
Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any dissolution of the Trust, the Trust shall be
liquidated by the Administrative Trustees as expeditiously as the Administrative
Trustees determine to be possible by distributing, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, to the
Holders of the Securities a Like Amount (as defined below) of the Debentures,
unless such distribution is determined by the Property Trustee not to be
practicable, in which event such Holders will be entitled to receive out of the
assets of the Trust legally available for distribution to Holders, after
satisfaction of liabilities to creditors of the Trust as provided by applicable
law, an amount equal to the aggregate of the Liquidation Amount of $_______ per
Security plus accumulated and unpaid Distributions thereon to the date of
payment (such amount is referred to herein as the "Liquidation Distribution").
"Like Amount" means (i) with respect to a redemption of the Securities,
Securities having a Liquidation Amount equal to the principal amount of
Debentures to be paid in accordance with their terms and (ii) with respect to a
distribution of Debentures upon the dissolution of the Trust,
I-3
74
Debentures having a principal amount equal to the Liquidation Amount of the
Securities of the Holder to whom such Debentures are distributed.
If, upon any such liquidation, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets legally available to pay
in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole or in part, at stated
maturity or date of earlier redemption (either at the option of the Debenture
Issuer or pursuant to a Tax Event, as described below), the proceeds from such
repayment shall be simultaneously applied by the Property Trustee to redeem a
Like Amount of the Securities at a redemption price equal to (i) in the case of
the repayment of the Debentures at stated maturity, the Maturity Redemption
Price (as defined below), (ii) in the case of the optional redemption of the
Debentures upon the occurrence [prior to _________] and continuation of a Tax
Event, the Tax Event Redemption Price (as defined below) and (iii) in the case
of the optional redemption of the Debentures other than as a result of the
occurrence and continuance of a Tax Event, the Optional Redemption Price (as
defined below). The Maturity Redemption Price, the Tax Event Redemption Price
and the Optional Redemption Price are referred to collectively as the
"Redemption Price" and the date fixed for redemption of the Securities is
referred to herein as the "Redemption Date". Holders will be given not less than
30 nor more than 60 days' prior written notice of such redemption. Any
redemption of Securities shall be made, and the applicable Redemption Price
shall be payable, on the Redemption Date, and only to the extent that the Trust
has funds legally available for the payment thereof.
(b) (i) The "Maturity Redemption Price", shall mean a price equal to
100% of the Liquidation Amount of the Securities to be redeemed plus accumulated
and unpaid Distributions thereon, if any, to the date of redemption.
(ii) In the case of an optional redemption other than as a result of the
occurrence and continuance of a Tax Event, if fewer than all the outstanding
Securities are to be so redeemed, the Common Securities and the Preferred
Securities will be redeemed on a Pro Rata basis and the Preferred Securities to
be redeemed will be determined as described in Section 4(f)(ii) below. [Upon the
entry of an order for the dissolution of the Trust by a court of competent
jurisdiction, the Debentures thereafter will be subject to optional repayment,
in whole, but not in part, on or after ____________, _____.]
The Debenture Issuer shall have the right (subject to the conditions in
the Indenture) to redeem the Debentures in whole or in part at any time on or
after _________, ______, and, simultaneous with such redemption, to cause a Like
Amount of the Securities to be redeemed by the Trust at the Optional Redemption
Price on a Pro Rata basis. "Optional Redemption Price" shall mean a price equal
to [_____%] [the percentage of the Liquidation Amount of Securities to
I-4
75
be redeemed plus accumulated and unpaid Distributions thereon, if any, to the
date of redemption if redeemed during the 12-month period beginning ________ of
the years indicated below:
Year Percentage]
------ ----------
(c) If at any time a Tax Event occurs [prior to ____________] and is
continuing, the Debenture Issuer shall have the right (subject to the conditions
set forth in the Indenture) to redeem the Debentures in whole, but not in part,
within the 90 days following the occurrence of such Tax Event (the "90 Day
Period"), and, simultaneous with such redemption, to cause a Like Amount of the
Securities to be redeemed by the Trust at the Tax Event Redemption Price on a
Pro Rata basis.
"Tax Event" shall occur upon receipt by the Administrative Trustees and the
Debenture Issuer of a reasoned Opinion of Counsel from counsel experienced in
such matters to the effect that, as a result of any amendment to, or change
(including any announced prospective change) in, the laws or any regulations
thereunder of the United States or any political subdivision or taxing authority
thereof or therein, or as a result of any official administrative pronouncement
or judicial decision interpreting or applying such laws or regulations, which
amendment or change is effective or which pronouncement or decision is announced
on or after the date of the Agreement, there is more than an insubstantial risk
that (i) the Trust is, or will be within 90 days of the date of such opinion,
subject to United States federal income tax with respect to income received or
accrued on the Debentures, (ii) the interest payable by the Debenture Issuer on
the Debentures is not, or within 90 days of the date of such opinion will not
be, deductible by the Debenture Issuer, in whole or in part, for United States
federal income tax purposes, or (iii) the Trust is, or will be within 90 days of
the date of such opinion, subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
"Tax Event Redemption Price" shall mean a price equal to [the greater of
(i)] 100% of the Liquidation Amount of Securities to be redeemed [or (ii) the
sum, as determined by a Quotation Agent (as defined in the Indenture), of the
present values of the remaining scheduled payments of principal and interest
thereon discounted to the redemption date on a _________ basis (assuming a
360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate
(as defined in the Indenture), plus, in each case, accumulated and unpaid
Distributions thereon, if any, to the date of such redemption].
(d) On and from the date fixed by the Administrative Trustees for any
distribution of Debentures and liquidation of the Trust: (i) the Securities will
no longer be deemed to be outstanding, (ii) the Clearing Agency or its nominee
(or any successor Clearing Agency or its nominee), as the Holder of the
Preferred Securities, will receive a registered global
I-5
76
certificate or certificates representing the Debentures to be delivered upon
such distribution and (iii) any certificates representing Securities not held by
the Clearing Agency or its nominee (or any successor Clearing Agency or its
nominee) will be deemed to represent beneficial interests in Debentures until
such certificates are presented to the Debenture Issuer or its agent for
transfer or reissue.
(e) The Trust may not redeem fewer than all the outstanding Securities
unless all accumulated and unpaid Distributions have been paid on all Securities
for all Distribution periods terminating on or before the Redemption Date.
(f) The procedure with respect to redemptions or distributions of
Debentures shall be as follows:
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution
Notice") will be given by an Administrative Trustee on behalf of the
Trust by mail to each Holder of Securities to be redeemed or exchanged
not fewer than 30 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of a redemption, will
be the date fixed for redemption of the Debentures. For purposes of the
calculation of the date of redemption or exchange and the dates on
which notices are given pursuant to this Section 4(f)(i), a Redemption/
Distribution Notice shall be deemed to be given on the day such notice
is first mailed by first-class mail, postage prepaid, to Holders of
Securities. Each Redemption/Distribution Notice shall be addressed to
the Holders of Securities at the address of each such Holder appearing
in the books and records of the Trust. No defect in the Redemption/
Distribution Notice or in the mailing of either thereof with respect to
any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(ii)In the event that fewer than all the outstanding
Securities are to be redeemed, the Securities to be redeemed shall be
redeemed on a Pro Rata basis from each Holder of Preferred Securities,
it being understood that, in respect of Preferred Securities registered
in the name of and held of record by the Clearing Agency or its nominee
(or any successor Clearing Agency or its nominee) or any nominee, the
distribution of the proceeds of such redemption will be made to the
Clearing Agency and disbursed by such Clearing Agency in accordance
with the procedures applied by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice (which notice will be irrevocable), then
(A) with respect to Global Preferred Securities representing Preferred
Securities issued in book-entry form, by 12:00 noon, New York City
time, on the Redemption Date, provided that the Debenture Issuer has
paid the Property Trustee a sufficient amount of cash in connection
with the related redemption or maturity of the Debentures by 10:00
a.m., New York City time, on the stated maturity date or the date of
earlier redemption, as the case requires, the Property Trustee will
deposit irrevocably with the Clearing Agency or its nominee (or
I-6
77
successor Clearing Agency or its nominee) funds sufficient to pay the
applicable Redemption Price with respect to such Preferred Securities
and will give the Clearing Agency irrevocable instructions and
authority to pay the Redemption Price to the relevant Participants, and
(B) with respect to Definitive Preferred Securities and Common
Securities, provided that the Debenture Issuer has paid the Property
Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Debentures, the Property Trustee will pay
the relevant Redemption Price to the Holders of such Securities by
check mailed to the address of such Holder appearing on the books and
records of the Trust on the redemption date. If a
Redemption/Distribution Notice shall have been given and funds
deposited as required, then immediately prior to the close of business
on the date of such deposit, or on the Redemption Date, as applicable,
Distributions will cease to accumulate on the Securities so called for
redemption and all rights of Holders of such Securities so called for
redemption will cease, except the right of the Holders of such
Securities to receive the Redemption Price, but without interest on
such Redemption Price, and such Securities shall cease to be
outstanding.
(iv) Payment of accumulated and unpaid Distributions on the
Redemption Date will be subject to the rights of Holders of Securities
on the close of business on a record date in respect of a Distribution
Date occurring on or prior to such Redemption Date.
(v) Neither the Administrative Trustees nor the Trust shall be
required to register or cause to be registered the transfer of (i) any
Securities beginning on the opening of business 15 days before the day
of mailing of a notice of redemption or any notice of selection of
Securities for redemption or (ii) any Securities selected for
redemption except the unredeemed portion of any Security being
redeemed. If a Redemption Date is not a Business Day, then payment of
the Redemption Price payable on such date will be made on the next
succeeding Business Day, and no interest or other payment in respect of
any such delay will accumulate for the period to but excluding such
Business Day. If payment of the Redemption Price in respect of any
Securities is improperly withheld or refused and not paid either by the
Property Trustee or by the Sponsor as guarantor pursuant to the
relevant Securities Guarantee, Distributions on such Securities will
continue to accumulate from the original redemption date to the actual
date of payment, in which case the actual payment date will be
considered the Redemption Date for purposes of calculating the
Redemption Price.
(vi) Redemption/Distribution Notices shall be sent by the
Property Trustee on behalf of the Trust to (A) in respect of the
Preferred Securities, the Clearing Agency or its nominee (or any
successor Clearing Agency or its nominee) if the Global Preferred
Securities have been issued or, if Definitive Preferred Securities have
been issued, to the Holders thereof, and (B) in respect of the Common
Securities, to the Sponsor.
(vii) Subject to the foregoing and applicable law (including,
without limitation, United States Federal securities laws and banking
laws), the Sponsor or any of
I-7
78
its subsidiaries may at any time and from time to time purchase
outstanding Preferred Securities by tender, in the open market or by
private agreement.
5. Voting Rights - Preferred Securities.
(a) Except as provided under Sections 5(b) and 7 and as otherwise
required by law or the Agreement, the Holders of the Preferred Securities will
have no voting rights.
(b) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding with respect to any remedy available to the Debenture Trustee, or
exercise any trust or power conferred upon the Debenture Trustee, with respect
to the Debentures, (ii) waive any past default that is waivable under the
Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Debentures, or (iv) consent
to any amendment, modification or termination of the Indenture or the Debentures
where such consent shall be required, without, in each case, obtaining (1) the
prior approval of the Holders of a Majority in Liquidation Amount of all
outstanding Preferred Securities; provided, however, that where a 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 approval of each Holder of the Preferred Securities and (2) an Opinion of
Counsel delivered to the Trust from tax counsel experienced in such matters to
the effect that the Trust will not be classified as an association taxable as
corporation for United States Federal income tax purposes on account of such
action.
Notwithstanding anything to the contrary contained herein, if an Event of
Default under the Agreement has occurred and is continuing and such event is
attributable to the failure of the Debenture Issuer to pay principal of or
premium, if any, or interest on the Debentures on the date such principal,
premium, if any, or interest is otherwise payable (or, in the case of
redemption, on the Redemption Date), then a Holder of Preferred Securities may
directly institute a proceeding against the Debenture Issuer for enforcement of
payment to such Holder of the principal of or premium, if any, or interest on a
Like Amount of Debentures (a "Direct Action") on or after the respective due
date specified in the Debentures. In connection with such a Direct Action, (i)
the rights of the Common Securities Holder will be subordinated to the rights of
Holders of Preferred Securities with respect to payments made or required to be
made by the Debenture Issuer in such Direct Action and (ii) the Debenture Issuer
shall remain obligated to pay the principal of, premium, if any, or interest on
such Debentures, and the Debenture Issuer shall be subrogated to the rights of
such Holder of Preferred Securities to the extent of any payment made by the
Debenture Issuer to such Holder in such Direct Action.
Any approval or direction of Holders of Preferred Securities may be given
at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities or pursuant to written
consent. The Property Trustees will cause a notice of any meeting at which
Holders of Preferred Securities are entitled to vote to be mailed to each Holder
of record of Preferred Securities. Each such notice will include a statement
setting forth (i) the date of such meeting, (ii) a description of any resolution
proposed for adoption at such
I-8
79
meeting on which such Holders are entitled to vote and (iii) instructions for
the delivery of proxies.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities, or to
distribute the Debentures, in accordance with the Agreement and these terms of
the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned by the Sponsor or any Affiliate of the Sponsor shall
not be entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b) and 7 as otherwise required
by law or the Agreement, the Holders of the Common Securities will have no
voting rights.
(b) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding with respect to any remedy available to the Debenture Trustee, or
exercise any trust or power conferred upon the Debenture Trustee, with respect
to the Debentures, (ii) waive any past default that is waivable under the
Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Debentures or (iv) consent
to any amendment, modification or termination of the Indenture or the Debentures
where such consent shall be required, without, in each case, obtaining (1) the
prior approval of the Holders of a Majority in Liquidation Amount of all
outstanding Common Securities; provided, however, that where a 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 approval of the Common Securities Holder and (2) an Opinion of Counsel
delivered to the Trust from tax counsel experienced in such matters to the
effect that the Trust will not be classified as an association taxable as a
corporation for United States Federal income tax purposes on account of such
action.
Notwithstanding anything to the contrary contained herein, if an Event of
Default under the Agreement has occurred and is continuing and such event is
attributable to the failure of the Debenture Issuer to pay principal of or
premium, if any, or interest on the Debentures on the date such principal,
premium, if any, or interest is otherwise payable (or, in the case of
redemption, on the Redemption Date), then a Holder of Common Securities may
institute a Direct Action against the Debenture Issuer for enforcement of
payment to such Holder of the principal of or premium, if any, or interest on a
Like Amount of Debentures on or after the respective due date specified in the
Debentures. In connection with such a Direct Action, (i) the rights of the
Common Securities Holder will be subordinated to the rights of Holders of
Preferred Securities with respect to payments made or required to be made by the
Debenture Issuer in such Direct Action and (ii) the Debenture Issuer shall
remain obligated to pay the principal of, premium, if any, or interest on such
Debentures, and the Debenture Issuer shall be subrogated to the rights of such
Holder of
I-9
80
Preferred Securities to the extent of any payment made by the Debenture Issuer
to such Holder in such Direct Action.
Any approval or direction of Holder(s) of Common Securities may be given at
a separate meeting of Holder(s) of Common Securities convened for such purpose,
at a meeting of all of the Holders of Securities or pursuant to written consent.
The Administrative Trustees will cause a notice of any meeting at which
Holder(s) of Common Securities are entitled to vote, to be mailed to each Holder
of record of Common Securities. Each such notice will include a statement
setting forth (i) the date of such meeting, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holder(s) are entitled to
vote and (iii) instructions for the delivery of proxies.
No vote or consent of the Holder(s) of the Common Securities will be
required for the Trust to redeem and cancel Common Securities, or to distribute
the Debentures, in accordance with the Agreement and these terms of the
Securities.
7. Amendments to Agreement.
In addition to the requirements set out in Section 12.1 of the Agreement,
the Agreement may be amended from time to time by the Sponsor and the Trustees
with (i) the consent of Holders of a Majority in Liquidation Amount of all
outstanding Securities, and (ii) receipt by the Trustees of an opinion of
counsel experienced in such matters to the effect that such amendment or the
exercise of any power granted to the Trustees in accordance with such amendment
will not affect the Trust's status as a grantor trust for United States Federal
income tax purposes or the Trust's exemption from status as an Investment
Company under the Investment Company Act; provided, however, that, without the
consent of each Holder of the Securities, the Agreement may not be amended to
(i) change the Distribution Rate (or manner of calculation of the Distribution
Rate), amount, timing or currency or otherwise adversely affect the method of
any required payment, (ii) change the purposes of the Trust, (iii) authorize the
issuance of any additional beneficial interests in the Trust, (iv) change the
redemption provisions, (v) change the conditions precedent for the Sponsor to
elect to dissolve the Trust and distribute the Debentures to the Holders of the
Securities, (vi) change the Liquidation Distribution or other provisions
relating to the distribution of amounts payable upon the dissolution and
liquidation of the Trust, (vii) affect the limited liability of any Holder of
the Securities or (viii) restrict the right of a Holder of the Securities to
institute suit for the enforcement of any required payment on or after the due
date therefor (or, in the case of redemption, on the Redemption Date).
8. Pro Rata.
A reference herein to any payment, distribution or treatment as being "Pro
Rata" shall mean pro rata to each Holder of Securities according to the
aggregate Liquidation Amount of the Securities held by such Holder in relation
to the aggregate Liquidation Amount of all Securities outstanding unless, in
relation to a payment, an Event of Default under the Agreement has occurred and
is continuing, in which case any funds legally available to make such payment
shall
I-10
81
be paid first to each Holder of the Preferred Securities pro rata according to
the aggregate Liquidation Amount of Preferred Securities held by such Holder
relative to the aggregate Liquidation Amount of all Preferred Securities
outstanding, and only after satisfaction of all amounts owed to the Holders of
the Preferred Securities, to each Holder of Common Securities pro rata according
to the aggregate Liquidation Amount of Common Securities held by such Holder
relative to the aggregate Liquidation Amount of all Common Securities
outstanding.
9. Ranking.
The Preferred Securities rank pari passu with the Common Securities and
payment thereon shall be made Pro Rata with the Common Securities, except that,
if an Event of Default under the Agreement occurs and is continuing, no payments
in respect of Distributions on, or payments upon liquidation, redemption or
otherwise with respect to, the Common Securities shall be made until the Holders
of the Preferred Securities shall be paid in full the Distributions, Redemption
Price, Liquidation Distribution and other payments to which they are entitled at
such time.
10. Acceptance of Securities Guarantees and Indenture.
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee, the Common Securities Guarantee and the Indenture, including the
subordination provisions therein.
11. No Preemptive Rights.
The Holders of the Securities shall have no preemptive or similar rights to
subscribe for any additional securities of the Trust.
12. Miscellaneous.
These terms constitute a part of the Agreement.
The Sponsor will provide a copy of the Agreement, the Preferred Securities
Guarantee or the Common Securities Guarantee (as may be appropriate) and the
Indenture (including any supplemental indenture) to a Holder without charge on
written request to the Sponsor at its principal place of business.
I-11
82
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[IF THIS PREFERRED SECURITY IS A GLOBAL PREFERRED SECURITY, INSERT: THIS
PREFERRED SECURITY IS A GLOBAL PREFERRED SECURITY WITHIN THE MEANING OF THE
AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING
AGENCY. THIS PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE AGREEMENT AND NO TRANSFER OF
THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED SECURITY AS A
WHOLE BY THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE
OF THE CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING
AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE CLEARING AGENCY TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CAPITAL SECURITY ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE CLEARING AGENCY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
A1-1
83
Certificate Number Number of Preferred
Securities
_________________ ____________________
CUSIP NO. __________
Certificate Evidencing Preferred Securities
of
HERCULES TRUST III
[____%] [Floating Rate] Preferred Securities
(liquidation amount $ ____ per Preferred Security)
HERCULES TRUST III, a statutory business trust created under the laws
of the State of Delaware (the "Trust"), hereby certifies that ______________
(the "Holder") is the registered owner of __________ securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the [____%] [Floating Rate] Preferred Securities (liquidation amount
$ ____ 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.
The designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Preferred Securities represented hereby are
issued and shall in all respects be subject to the provisions of the Amended and
Restated Trust Agreement of the Trust dated as of _____________, ____, as the
same may be amended from time to time (the "Agreement"), including the
designation of the terms of the Preferred Securities as set forth in Annex I to
the Agreement. Capitalized terms used but not defined herein shall have the
meaning given them in the Agreement. The Sponsor will provide a copy of the
Agreement, the Preferred Securities Guarantee and the Indenture to a Holder
without charge upon written request to the Trust at its principal place of
business.
Upon receipt of this certificate, the Holder is bound by the Agreement
and is entitled to the benefits thereunder and to the benefits of the Preferred
Securities Guarantee to the extent provided therein.
By acceptance, the Holder agrees to treat, for United States Federal
income tax purposes, the Debentures as indebtedness and the Preferred Securities
as evidence of indirect beneficial ownership in the Debentures.
A1-2
84
IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of ______________,_____.
HERCULES TRUST III
By: ___________________________________
Name:
Title: Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Agreement.
Dated:
THE CHASE MANHATTAN BANK,
as Property Trustee
By: __________________________________
Authorized Signatory
A1-3
85
[FORM OF REVERSE OF SECURITY]
Distributions on each Preferred Security will be payable at a rate per
annum [of ____ %] [equal to LIBOR plus ____%] (the "Distribution Rate") of the
Liquidation Amount of $ ____ per Preferred Security, such rate being the rate of
interest payable on the Debentures to be held by the Property Trustee. [LIBOR
and the amount payable in respect of a Distribution for a Distribution Period
will be calculated by the Calculation Agent in the same manner as LIBOR and the
interest payable in respect of each Interest Period for the Debentures, as set
forth in the Indenture.] Distributions in arrears for more than one ______
period will bear additional distributions thereon compounded ______ at the
applicable periodic Distribution Rate (to the extent permitted by applicable
law). The term "Distributions", as used herein, includes any such additional
distributions unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Debentures held by the Property
Trustee and to the extent the Property Trustee has funds legally available
therefor.
Distributions on the Preferred Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or,
if no Distributions have been paid, from _____________, ____, to but excluding
the related Distribution Date (as defined herein) or any date fixed for
redemption (a "Redemption Date") and will be payable ______ in arrears on
_________, [___________, _________] and ________ of each year, commencing
______________, _____ (each, a "Distribution Date"), except as otherwise
described below and in the Agreement. The amount of Distributions payable for
any Distribution Period will be computed on the basis of [a 360-day year
consisting of twelve 30-day months] [the actual number of days elapsed in such
period and a year of 360 days]. "Distribution Period" means the period from and
including the immediately preceding Distribution Date (or _______, _____, in the
case of the first Distribution Period) to but excluding the applicable
Distribution Date or Redemption Date. If a Distribution Date is not a Business
Day, then (such Distribution Date and the first day of the Distribution Period
commencing on such Distribution Date will be the next succeeding Business Day,
except if such Business Day is in the next succeeding calendar month, such
Distribution Date and the first day of such Distribution Period will be the
immediately preceding Business Day] [payments of any Distribution payable on
such date will be made on the next succeeding Business Day, and no interest or
other payment in respect of such delay shall accumulate for the period to but
excluding such Business Day].
As long as no Event of Default has occurred and is continuing under the
Indenture, the Debenture Issuer has the right under the Indenture to defer
payments of interest by extending the interest payment period at any time and
from time to time on the Debentures for a period not exceeding ______
consecutive _______ periods (each, an "Extension Period"), provided that an
Extension Period must end on an interest payment date for the Debentures and may
not extend beyond the stated maturity date or redemption date for the
Debentures. As a consequence of such deferral, Distributions will also be
deferred. Despite such deferral, ______ Distributions
A1-4
86
will continue to accumulate with additional interest thereon (to the extent
permitted by applicable law but not at a rate greater than the rate at which
interest is then accruing on the Debentures) at the Distribution Rate then in
effect compounded ______ during any such Extension Period. Prior to the
termination of any such Extension Period, the Debenture Issuer may further defer
payments of interest by further extending such Extension Period; provided that
such Extension Period, together with all such previous and further extensions,
may not exceed ______ consecutive ______ periods, must end on an interest
payment date for the Debentures and may not extend beyond the Maturity Date or
Redemption Date of the Debentures. At the end of the Extension Period, all
accumulated and unpaid Distributions (but only to the extent payments are made
in respect of the Debentures held by the Property Trustee and to the extent the
Property Trustee has funds available therefor) will be payable to the Holders as
they appear on the books and records of the Trust on the record date immediately
preceding the end of the Extension Period. Upon the termination of any Extension
Period (or any extension period thereof) and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
foregoing requirements.
The Preferred Securities shall be redeemable [and convertible] [and
exchangeable] as provided in the Agreement.
A1-5
87
ASSIGNMENT
---------------------
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
-----------------------
Signature:
--------------------
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature Guarantee**:
------------------------------------
--------
*** Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities and
Exchange Act of 1934, as amended.
A1-6
88
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS CERTIFICATE IS NOT TRANSFERABLE SUBJECT
TO THE TERMS OF THE AGREEMENT (AS DEFINED HEREIN)
Certificate Number Number of Common Securities
_________________________ ___________________________
Certificate Evidencing Common Securities
of
HERCULES TRUST III
[____ %] [Floating Rate] Common Securities
(liquidation amount $ ____ per Common Security)
HERCULES TRUST III, a statutory business trust created under the laws
of the State of Delaware (the "Trust"), hereby certifies that Hercules
Incorporated (the "Holder") is the registered owner of __________ securities of
the Trust representing undivided beneficial interests in the assets of the Trust
designated the [____%] [Floating Rate] Common Securities (liquidation amount $
____ per Common Security) (the "Common Securities"). The Common Securities are
not transferable. The designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Common Securities represented hereby are
issued and shall in all respects be subject to the provisions of the Amended and
Restated Trust Agreement of the Trust dated as of ______________, ______, as the
same may be amended from time to time (the "Agreement"), including the
designation of the terms of the Common Securities as set forth in Annex I to the
Agreement. Capitalized terms used but not defined herein shall have the meaning
given them in the Agreement. The Sponsor will provide a copy of the Agreement,
the Common Securities Guarantee and the Indenture to a Holder without charge
upon written request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Agreement
and is entitled to the benefits thereunder and to the benefits of the Common
Securities Guarantee to the extent provided therein.
By acceptance, the Holder agrees to treat, for United States Federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
A2-1
89
IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of ___________________, _____.
HERCULES TRUST III
By:______________________________
Name:
Title: Administrative Trustee
A2-2
90
[FORM OF REVERSE OF SECURITY]
Distributions on each Common Security will be payable at a rate per
annum [of ____%] [equal to LIBOR plus ____ %] (the "Distribution Rate") of the
Liquidation Amount of $ ____ per Common Security, such rate being the rate of
interest payable on the Debentures to be held by the Property Trustee. [LIBOR
and the amount payable in respect of a Distribution for a Distribution Period
will be calculated by the Calculation Agent in the same manner as LIBOR and the
interest payable in respect of each Interest Period for the Debentures, as set
forth in the Indenture.] Distributions in arrears for more than one ____ period
will bear additional distributions thereon compounded ____ at the applicable
periodic Distribution Rate (to the extent permitted by applicable law). The term
"Distributions", as used herein, includes any such additional distributions
unless otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the Property Trustee and
to the extent the Property Trustee has funds legally available therefor.
Distributions on the Common Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or,
if no Distributions have been paid, from __________, ____ , to but excluding the
related Distribution Date (as defined herein) or any date fixed for redemption
(a "Redemption Date"), and will be payable ______ in arrears on _________[,
____________, ___________] and ____________ of each year, commencing __________
, _____ (each, a "Distribution Date"), except as otherwise described below and
in the Agreement. The amount of Distributions payable for any Distribution
Period will be computed on the basis of [a 360-day year consisting of twelve
30-day months] [the actual number of days elapsed in such period and a year of
360 days]. "Distribution Period" means the period from and including the
immediately preceding Distribution Date (or ________, _____, in the case of the
first Distribution Period) to but excluding the applicable Distribution Date or
Redemption Date. If a Distribution Date is not a Business Day, then [such
Distribution Date and the first day of the Distribution Period commencing on
such Distribution Date will be the next succeeding Business Day, except if such
Business Day is in the next succeeding calendar month, such Distribution Date
and the first day of such Distribution Period will be the immediately preceding
Business Day] [payment s of any Distributions payable on such date will be made
on the next succeeding Business Day, and no interest or other payment in respect
of any such delay shall accumulate for the period to but excluding such Business
Day].
As long as no Event of Default has occurred and is continuing under the
Indenture, the Debenture Issuer has the right under the Indenture to defer
payments of interest by extending the interest payment period at any time and
from time to time on the Debentures for a period not exceeding ______
consecutive ______ periods (each, an "Extension Period"), provided that an
Extension Period must end on an interest payment date for the Debentures and may
not extend beyond the stated maturity date or redemption date for the
Debentures. As a consequence of
A2-3
91
such deferral, Distributions will also be deferred. Despite such deferral,
______ Distributions will continue to accumulate with additional interest
thereon (to the extent permitted by applicable law but not at a rate greater
than the rate at which interest is then accruing on the Debentures) at the
Distribution Rate then in effect compounded ______ during any such Extension
Period. Prior to the termination of any such Extension Period, the Debenture
Issuer may further defer payments of interest by further extending such
Extension Period; provided that such Extension Period, together with all such
previous and further extensions, may not exceed ______ consecutive ______
periods, must end on an interest payment date for the Debentures and may not
extend beyond the Maturity Date or Redemption Date of the Debentures. At the end
of the Extension Period, all accumulated and unpaid Distributions (but only to
the extent payments are made in respect of the Debentures held by the Property
Trustee and to the extent the Property Trustee has funds legally available
therefor) will be payable to the Holders as they appear on the books and records
of the Trust on the record date immediately preceding the end of the Extension
Period. Upon the termination of any Extension Period and the payment of all
amounts then due, the Debenture Issuer may commence a new Extension Period,
subject to the foregoing requirements.
The Common Securities shall be redeemable [and convertible] [and
exchangeable] as provided in the Agreement.
A2-4
92
EXHIBIT B
[Insert Specimen Debenture]
B-1
93
EXHIBIT C
[Insert Purchase Agreement]
C-1
