1
Exhibit 4.2
AMENDED AND RESTATED TRUST AGREEMENT
HERCULES TRUST II
Dated as of July 27, 1999
2
TABLE OF CONTENTS
PAGE
----
ARTICLE I.
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions....................................................................... 2
ARTICLE II.
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.................................................. 10
SECTION 2.2 List of Holders of Securities..................................................... 10
SECTION 2.3 Reports by the Property Trustee................................................... 10
SECTION 2.4 Periodic Reports to Property Trustee.............................................. 11
SECTION 2.5 Evidence of Compliance with Conditions Precedent.................................. 11
SECTION 2.6 Events of Default; Waiver......................................................... 11
SECTION 2.7 Event of Default; Notice.......................................................... 13
ARTICLE III.
ORGANIZATION
SECTION 3.1 Name.............................................................................. 13
SECTION 3.2 Office............................................................................ 13
SECTION 3.3 Purpose........................................................................... 14
SECTION 3.4 Authority......................................................................... 14
SECTION 3.5 Title to Property of the Trust.................................................... 14
SECTION 3.6 Powers and Duties of the Administrative Trustees.................................. 14
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.............................. 17
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................................................ 21
SECTION 3.11 Delaware Trustee.................................................................. 24
SECTION 3.12 Execution of Documents............................................................ 24
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities............................ 24
SECTION 3.14 Duration of Trust................................................................. 24
SECTION 3.15 Mergers........................................................................... 25
3
ARTICLE IV.
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities........................................... 26
SECTION 4.2 Responsibilities of the Sponsor................................................... 27
SECTION 4.3 Right to Proceed.................................................................. 27
ARTICLE V.
TRUSTEES
SECTION 5.1 Number of Trustees; Appointment of Co-Trustee..................................... 27
SECTION 5.2 Delaware Trustee.................................................................. 28
SECTION 5.3 Property Trustee; Eligibility..................................................... 28
SECTION 5.4 Certain Qualifications of Administrative Trustees and Delaware Trustee
Generally......................................................................... 29
SECTION 5.5 Administrative Trustees........................................................... 29
SECTION 5.6 Delaware Trustee.................................................................. 30
SECTION 5.7 Appointment, Removal and Resignation of Trustees.................................. 30
SECTION 5.8 Vacancies among Trustees.......................................................... 32
SECTION 5.9 Effect of Vacancies............................................................... 32
SECTION 5.10 Meetings.......................................................................... 32
SECTION 5.11 Delegation of Power............................................................... 33
SECTION 5.12 Merger, Conversion, Consolidation or Succession to Business....................... 33
SECTION 5.13 Compensation...................................................................... 33
ARTICLE VI.
DISTRIBUTIONS; REMARKETING
SECTION 6.1 Distributions..................................................................... 34
SECTION 6.2 Remarketing....................................................................... 34
ARTICLE VII.
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities........................................... 35
SECTION 7.2 Execution and Authentication...................................................... 36
SECTION 7.3 Form and Dating................................................................... 36
SECTION 7.4 Registrar and Paying Agent........................................................ 38
SECTION 7.5 Paying Agent to Hold Money in Trust............................................... 38
SECTION 7.6 Replacement Securities............................................................ 39
SECTION 7.7 Outstanding Preferred Securities.................................................. 39
SECTION 7.8 Preferred Securities in Treasury.................................................. 39
SECTION 7.9 Temporary Securities.............................................................. 39
ii
4
SECTION 7.10 Cancellation...................................................................... 40
SECTION 7.11 CUSIP Numbers..................................................................... 40
SECTION 7.12 Amendment to Securities Certificates.............................................. 40
ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1 Dissolution of Trust.............................................................. 41
ARTICLE IX.
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities............................................................ 42
SECTION 9.2 Transfer Procedures and Restrictions.............................................. 42
SECTION 9.3 Deemed Security Holders........................................................... 45
SECTION 9.4 Book Entry Interests.............................................................. 45
SECTION 9.5 Notices to Clearing Agency........................................................ 46
SECTION 9.6 Appointment of Successor Clearing Agency.......................................... 46
ARTICLE X.
LIMITATION OF LIABILITY OF HOLDERS
OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability......................................................................... 46
SECTION 10.2 Exculpation....................................................................... 47
SECTION 10.3 Fiduciary Duty.................................................................... 47
SECTION 10.4 Indemnification................................................................... 48
SECTION 10.5 Outside Businesses................................................................ 51
ARTICLE XI.
ACCOUNTING
SECTION 11.1 Fiscal Year....................................................................... 51
SECTION 11.2 Certain Accounting Matters........................................................ 51
SECTION 11.3 Banking........................................................................... 52
SECTION 11.4 Withholding....................................................................... 52
iii
5
ARTICLE XII.
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments........................................................................ 53
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.................. 55
SECTION 12.3 Power of Attorney................................................................. 56
ARTICLE XIII.
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee................................ 56
SECTION 13.2 Representations and Warranties of Delaware Trustee................................ 57
ARTICLE XIV.
MISCELLANEOUS
SECTION 14.1 Notices........................................................................... 58
SECTION 14.2 Governing Law..................................................................... 59
SECTION 14.3 Intention of the Parties.......................................................... 59
SECTION 14.4 Headings.......................................................................... 59
SECTION 14.5 Successors and Assigns............................................................ 60
SECTION 14.6 Partial Enforceability............................................................ 60
SECTION 14.7 Counterparts...................................................................... 60
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)......................................................... 2.2(b)
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(e)
317(a)................................................................. 3.8(h)
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.
i
7
AMENDED AND RESTATED
TRUST AGREEMENT
OF
HERCULES TRUST II
AMENDED AND RESTATED TRUST AGREEMENT (the "Agreement") dated
and effective as of July 27, 1999 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 II (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:
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.
"Accreted Liquidation Amount" means, at any date, the sum of
the initial purchase price of a Preferred Security (i.e. $741.46) plus accrual
of the discount (i.e. the difference between the Scheduled Liquidation Amount of
$1,000 payable in respect of such Preferred Security on June 30, 2029 and such
initial purchase price), calculated from July 27, 1999 to the date of
calculation on a quarterly bond equivalent yield basis using a 360-day year of
twelve 30-day months until such sum equals $1,000 on June 30, 2029; provided,
however, if the Preferred Securities are Remarketed, then, at all times on and
after the Reset Date, the term "Accreted Liquidation Amount" shall mean the
Accreted Liquidation Amount, calculated as described above, as of the Reset
Date.
"Acquisition Reset Event" shall occur if (i) all of the shares
of the Sponsor's common stock are acquired by a third party and all or a portion
of the consideration of such acquisition involves cash and (ii) the total
consideration per share of the Sponsor's common stock exceeds the Exercise Price
Per Share (after giving effect to the reduction of the Warrant Exercise Price as
contemplated in Section 6.3 of the Warrant Agreement upon the occurrence of a
Reset Event).
"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.
2
9
"Agent" means any Paying Agent or Registrar.
"Agreement" means this Amended and Restated Trust Agreement,
dated as of July 27, 1999, including Annex I and all the exhibits hereto.
"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 registered in the name of a Clearing Agency or its nominee,
ownership and transfers of which shall be maintained and made through book
entries by such 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 Section 3801 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
Underwriting 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 set forth in Section
7.1(a).
"Common Securities Guarantee" means the Common Securities
Guarantee Agreement, dated as of July 27, 1999, 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.
3
10
"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,
Attention: Capital Markets Fiduciary Services.
"Covered Person" means: (a) any officer, director,
shareholder, partner, member, representative, employee or agent of (i) the Trust
or (ii) any of the Trust's Affiliates; and (b) any Holder of Securities.
"CRESTS Unit" means a unit consisting of one Preferred
Security and one Warrant to purchase shares of the Sponsor's common stock in
accordance with the terms of the Warrant Agreement.
"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 Series A Junior Subordinated Deferrable
Interest Debentures 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 or
lapse of time, or both, would constitute an Event of Default.
"Definitive Preferred Securities" has the meaning set forth in
Section 7.3.
"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.
"Exercise Price Per Share" has the meaning specified in the
Warrant Agreement.
"Expiration Date" has the meaning specified in the Warrant
Agreement.
4
11
"Failed Remarketing" has the meaning set forth in Section 2 of
Annex I hereto.
"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.
"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.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Junior Subordinated Debentures
Indenture, dated as of March 17, 1999, between the Debenture Issuer and the
Debenture Trustee relating to the Debenture Issuer's junior subordinated
debentures, as amended or supplemented from time to time, including the First
Supplemental Indenture thereto, dated as of July 27, 1999.
"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(g).
"Like Amount" has the meaning set forth in Section 3 of Annex
I hereto.
"Liquidation Amount" means either the Accreted Liquidation
Amount or the Scheduled Liquidation Amount, as the context requires.
"Liquidation Distribution" has the meaning set forth in
Section 3 of Annex I hereto.
"List of Holders" has the meaning set forth in Section 2.2(a)
hereof.
"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 Common Securities voting separately as a class, who are the record
owners of more than 50% of the aggregate Accreted 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 President, the Chief
Financial Officer or a Vice President, and
5
12
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;
(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
Option CRESTS Units (as defined in the Underwriting Agreement).
"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 set forth in Section 7.3(a).
"Paying Agent" has the meaning set forth in Section 7.4.
"Payment Amount" has the meaning set forth 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 set forth in Section
7.1(a).
"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).
"Preferred Securities Guarantee" means the Preferred
Securities Guarantee Agreement, dated as of July 27, 1999, of the Sponsor in
respect of the Preferred Securities.
6
13
"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).
"Prospectus" has the meaning specified in the Warrant
Agreement.
"Quorum" means a majority of the Administrative Trustees or,
if there are only two Administrative Trustees, both of them.
"Redemption Date" has the meaning set forth in Section 4 of
Annex I hereto.
"Redemption Price" has the meaning set forth in Section 4 of
Annex I hereto.
"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.
"Remarketing" means a remarketing of Preferred Securities at
the Remarketing Rate upon the occurrence of a Reset Event pursuant to the terms
of this Agreement, and "Remarket" and "Remarketed" have related meanings.
"Remarketing Agent" means a nationally recognized investment
banking firm selected by the Sponsor to Remarket the Preferred Securities.
"Remarketing Rate" means, in the event of a Remarketing, the
annual distribution rate that enables a resale of the Preferred Securities at a
price equal to at least 100.25% (after provision for the fee of the Remarketing
Agent) of the Accreted Liquidation Amount thereof as of the Reset Date, plus
accumulated distributions, if any, to the Reset Date.
"Reset Date" has the meaning set forth in Section 2 of Annex I
hereto.
"Reset Event" means an Acquisition Reset Event or a Trading
Reset Event.
"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.
"Scheduled Liquidation Amount" has the meaning set forth in
Section 2 of Annex I hereto.
7
14
"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.
"Shelf Registration Statement" has the meaning specified in
the Warrant Agreement.
"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).
"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 Common Securities voting separately as a class, who are the record
owners of 10% or more of the aggregate Accreted 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.
"Trading Day" means any day on which shares of common stock of
the Sponsor, or other capital stock issuable upon exercise of a Warrant in
accordance with the terms of the Warrant Agreement, are traded on the New York
Stock Exchange or, if such shares are not listed or admitted for trading on the
New York Stock Exchange, on the principal national securities exchange on which
such shares are listed or admitted or, if such shares are not listed or admitted
for trading on any national securities exchange, on the Nasdaq National Market
or, if such shares are not quoted on the Nasdaq National Market, in the
applicable securities market in which such shares are traded.
A "Trading Reset Event" shall occur if (A)(i) on any date
after July 27, 2004, the closing price of the Sponsor's common stock (taking
into account any other capital stock issued in exchange for the Sponsor's common
stock, calculated on an as adjusted basis for each share of the Sponsor's common
stock) has exceeded $51.24 per share for at least 20 Trading Days within the
immediately preceding 30 Trading Days and (ii) the Sponsor elects, at its
option, to cause the remarketing of the Preferred Securities to occur and to
accelerate the
8
15
expiration date of the Warrants, and gives written notice of any such election
to the holders of the CRESTS Units, the Preferred Securities and the Warrants or
(B) on January 31, 2029, the closing price of the Sponsor's common stock (taking
into account any other capital stock issued in exchange for the Sponsor's common
stock, calculated on an as adjusted basis for each share of the Sponsor's common
stock) has exceeded $40.56 per share for at least 20 Trading Days within the
immediately preceding 30 Trading Days.
"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" 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 a Trustee in accordance with
the provisions hereof, and references herein to a Trustee shall refer to such
Person solely in its capacity as trustee hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement,
dated July 21, 1999, by and among the Trust, the Sponsor and the underwriters
named therein relating to the CRESTS Units.
"Unit Agreement" means an agreement, dated July 27, 1999,
among the Sponsor, the Trust and The Chase Manhattan Bank, as unit agent, as
amended or supplemented from time to time.
"Warrant Agreement" means the Warrant Agreement, dated as of
July 27, 1999, between the Sponsor and The Chase Manhattan Bank, as warrant
agent.
"Warrant Exercise Price" has the meaning specified in the
Warrant Agreement.
"Warrants" means the warrants to purchase common stock of the
Sponsor issued pursuant to the Warrant Agreement.
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.
9
16
(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 List 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, 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"), 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, (i) within 14 days after each
record date for payment of Distributions as of such record date and (ii) at any
other time, within 30 days of receipt by the Trust of a written request from the
Property Trustee for a List of Holders as of a date no more than 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
its 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.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after September 1 of each year, commencing
September 1, 1999, 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.
10
17
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 holders of a greater than
a majority in aggregate accreted 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 of the aggregate Accreted
Liquidation Amount of the Preferred Securities that the relevant Super
Majority represents of the aggregate accreted principal amount of the
Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this 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
11
18
(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 of
the aggregate Accreted Liquidation Amount of the Common Securities that
the relevant Super Majority represents of the aggregate accreted
principal amount of the Debentures outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
all Events of Default with respect to the Common Securities and their
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 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 a default in the payment of
principal of or interest on any of the Debentures, 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:
12
19
(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.
ARTICLE III.
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "Hercules Trust II" 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) to use the proceeds from the sale of the
Securities to acquire the Debentures in an aggregate principal amount equal to
the aggregate Scheduled Liquidation Amount of such Securities on the date of
issuance 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
13
20
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.
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 and the Underwriting
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) a simultaneous issuance
of both Preferred Securities and Common Securities at the Closing Time and the
Option Closing Date, if any, and (B) an issuance of replacement Preferred
Securities and Common Securities in accordance with Section 7.12 upon the
occurrence of a Remarketing;
(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 or the CRESTS Units for sale;
(ii) execute and deliver letters, documents, or instruments
with DTC and other Clearing Agencies relating to the Preferred
Securities or the CRESTS Units; and
(iii) 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 or the CRESTS Units;
(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 enter into such agreements (including the Unit Agreement) and
arrangements as may be necessary or desirable in connection with the issue and
sale of the Preferred Securities
14
21
or the CRESTS Units or the Remarketing of the Preferred Securities and, in each
case, 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 establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights 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;
(f) to take all actions and perform such duties as may be required of
the Administrative Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) 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;
(i) to comply with the Trust's obligations under the Trust Indenture
Act;
(j) to give the certificate required by Section 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Administrative Trustee;
(k) to incur expenses that are necessary or incidental to carry out any
of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, Registrar for the
Securities or to appoint a Paying Agent for the Securities as provided in
Section 7.4 except for such time as such power to appoint a Paying Agent is
vested in the Property Trustee;
(m) 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;
(n) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(o) 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:
15
22
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act; and
(ii) causing the Trust to be classified for United States
Federal income tax purposes as a grantor trust;
(p) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Administrative Trustees, on behalf of
the Trust; and
(q) 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 forth 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:
(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;
16
23
(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 other than a grantor trust 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.
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 in 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).
(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
17
24
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 whose long-term
senior unsecured indebtedness is rated at least investment grade 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 the distribution of the
Debentures 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 satisfaction of the
conditions specified herein; and
(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 with 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 having an aggregate Accreted
Liquidation Amount at least 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 to the failure of the
Debenture Issuer to pay the principal of or interest on the Debentures on the
date such principal 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 for enforcement of payment to such Holder of the
principal of or interest on the Debentures having an accreted principal amount
equal to the aggregate Accreted Liquidation Amount of the Preferred Securities
of such Holder on or after the respective due date specified in the Debentures
(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:
18
25
(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 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.
19
26
(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:
(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;
20
27
(vi) the Property Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of
the Debentures or the payment of any taxes or assessments levied
thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree
in writing with the Sponsor, and any 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 re-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
21
28
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 conducting any proceeding for any remedy
available to the Property Trustee or exercising any trust or 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 of the Accreted 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;
(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
22
29
(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 (or any Successor Property Trustee) 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 (or any
Successor Property Trustee) 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 (or any Successor Property
Trustee) 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 (or any Successor Delaware Trustee) are executed and 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 (or any Successor
Delaware Trustee) 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 (or any Successor Delaware
23
30
Trustee) 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 June 30, 2034.
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, 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
24
31
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, if
applicable;
(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, if applicable;
(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:
(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
25
32
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% of the Accreted 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 Accreted
Liquidation Amount of Common Securities at any time shall not be less than 3% of
the aggregate Accreted Liquidation Amount of all Securities 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 redemption of all the
Securities or certain mergers, consolidations or amalgamations, each as
permitted by this 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 prepare any required
prospectus in connection with the issue and
26
33
sale of the Preferred Securities or the CRESTS Units or with any Remarketing of
the Preferred Securities;
(b) to determine the jurisdictions in which to take appropriate action
to qualify or register for sale all or part of the Preferred Securities or the
CRESTS Units 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; and
(c) to negotiate the terms of, execute, enter into and deliver the
Underwriting Agreement and a remarketing agreement on behalf of the Trust.
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.
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,
27
34
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 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
proviso contained in Section 310(b) of the Trust Indenture Act.
28
35
(e) The initial Property Trustee shall be:
The Chase Manhattan Bank
One Xxxxxxx Xxxxx, 00xx Xxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Capital Markets Fiduciary Services
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
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) 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 this Agreement.
SECTION 5.6 Delaware Trustee.
The initial Delaware Trustee shall be:
Chase Manhattan Bank Delaware
0000 Xxxxxx Xxxxxx
00
00
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Department
Telephone: (000) 000-0000
Telecopier: (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 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;
(iii) whether or not an Event of Default shall have occurred
and be continuing after the issuance of the Securities, for cause by
vote of the Holders of a Majority in Liquidation Amount of the
Preferred Securities voting as a class at a meeting of the 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); and
(iv) if an Event of Default shall have occurred and be
continuing after the issuance of the Securities, 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) (i) 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
(ii) 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.
30
37
(c) A Trustee appointed to office shall hold office until his or her
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:
(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.
(d) 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.
(e) 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.
(f) No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
SECTION 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
31
38
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.
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
32
39
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; REMARKETING
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 any
compounded interest and additional interest) on and principal of 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
33
40
distribution (a "Distribution") of the Payment Amount to Holders in accordance
with the applicable terms of the Securities.
SECTION 6.2 Remarketing.
(a) Upon the occurrence of a Reset Event, the Sponsor shall send a
written notice to the Holders of the Preferred Securities, the Trustees and the
holders of the CRESTS Units and the Warrants identifying the type of Reset
Event, the Reset Date, the identity and address of the Remarketing Agent and the
procedures to be followed for a Holder of the Preferred Securities to
participate in the Remarketing.
(b) In order for any Preferred Securities to be Remarketed and resold,
prior to the close of business on the fifth Business Day preceding the Reset
Date the Holder thereof or of a CRESTS Unit must (1) notify the Remarketing
Agent of such Holder's election to sell the desired number of Preferred
Securities or Preferred Securities included in CRESTS Units, if any, and (2)
tender such Preferred Securities or CRESTS Units to the Remarketing Agent. In
the event that any such Preferred Security is a component of a CRESTS Unit and
such Holder elects not to exercise the Warrant component of such CRESTS Unit,
then the Remarketing Agent shall be authorized to notify the Unit Agent under
the Unit Agreement to separate such CRESTS Unit in accordance with Section
3.1(b) of the Unit Agreement. Proceeds from the Remarketing of Preferred
Securities, less the Remarketing Agent's fee, shall be disbursed by the
Remarketing Agent to Holders of such Preferred Securities, unless a Holder holds
a Preferred Security as part of a CRESTS Unit and is simultaneously exercising
the Warrant component of such CRESTS Unit, in which case a portion of such
proceeds will automatically be applied toward payment of the Warrant Exercise
Price of such Warrant. In the case of a Global Preferred Security, the notice
and tender requirements shall be governed by the procedures of the Clearing
Agency.
(c) In the case of a Failed Remarketing, the original terms of the
Preferred Securities shall be deemed to have been in effect at all times since
their original issuance under the circumstances referred to in the first
paragraph of Section 2(a) of Annex I hereto.
(d) The Sponsor will promptly give written notice of the completion of
a Remarketing to the Holders of the Preferred Securities and the Trustees. Such
notice shall include the new distribution rate and the Redemption Date. The
Sponsor will give written notice of a Failed Remarketing to all Holders of
Preferred Securities and the Trustees prior to the close of business on the
sixth Business Day following the proposed Reset Date.
(e) The Sponsor shall appoint a Remarketing Agent and use its best
efforts (together with the Remarketing Agent) to facilitate a Remarketing as
provided herein.
ARTICLE VII.
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Administrative Trustees shall on behalf of the Trust issue:
34
41
(i) 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
(ii) 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, and shall
issue such Securities at the Closing Time, on any Option Closing Date and, if
applicable, as required by Section 7.12.
(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.
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.
35
42
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 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 an Administrative Trustee on behalf of the Trust and authenticated by the
Property Trustee as hereinafter provided. The Global Preferred Security shall
represent such of the outstanding Preferred Security as shall be specified in
the "Schedule of Exchanges of Interests of Global Preferred Security" attached
thereto or otherwise in accordance with the procedures, of the Clearing Agency,
which, in the case of a Global Preferred Security that is not a component of a
CRESTS Unit, initially shall have a zero balance, and the Property Trustee shall
make the necessary endorsement to the "Schedule of Exchanges of Interests of
Global Preferred Security" or otherwise comply with the procedures of the
Clearing Agency to increase the number of outstanding Preferred Securities
represented by a Global Preferred Security that is not a component of a CRESTS
Unit upon a separation of a CRESTS Unit in accordance with the Unit Agreement.
The Property Trustee shall make such other necessary endorsements to the Global
Preferred Security to reflect the appropriate number of outstanding Preferred
Securities represented thereby. The Holder of a
36
43
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"). 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 may
appoint one or more co-registrars and one or more additional paying agents in
such other locations as it shall determine. The term "Registrar" includes any
additional registrar and the term "Paying Agent" includes any additional paying
agent. The Trust may change any Registrar or Paying 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, 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. The Trust shall act as
Registrar and Paying 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
37
44
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 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 the Redemption Price of 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 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.
38
45
A Preferred Security does not cease to be outstanding because
the Trust, the Sponsor or an Affiliate of the Sponsor holds such Preferred
Security, but such Preferred Security is not counted as outstanding for purposes
of voting or consent by the Holders as set forth in Section 5 of Annex I hereto.
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 Preferred Securities surrendered to them for
registration of transfer, redemption, exchange or payment. The Property Trustee
shall promptly cancel all Preferred Securities surrendered for registration of
transfer, redemption, exchange, payment, replacement 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.
SECTION 7.11 CUSIP Numbers.
The Trust, in issuing Preferred Securities that are not
components of CRESTS Units, shall use a separate "CUSIP" number for such
Preferred Securities, and, accordingly, the Property Trustee shall use such
"CUSIP" number in notices of redemption as a convenience to Holders of such
Preferred Securities; provided that any such notice may state that no
representation is made as to the correctness of such number either as printed on
such 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 such
Preferred Securities, and any such redemption
39
46
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 any such CUSIP
number.
SECTION 7.12 Amendment to Securities Certificates
In the event the Trust is required to issue replacement
Preferred Securities because of amendments to the provisions of this Agreement
or the terms of the Preferred Securities (as a result of the Remarketing or
otherwise in accordance with Section 12.1 or Section 7 of Annex I hereto), an
Administrative Trustee shall execute and deliver any such replacement Preferred
Securities to the Property Trustee and the Property Trustee shall authenticate
such replacement Preferred Securities by manual signature of an authorized
signatory of the Property Trustee and deliver such replacement Preferred
Securities to the Holders of the prior Preferred Securities. The Holders, by
acceptance of the Preferred Securities, expressly waive any and all rights to
enforce the provisions of the prior Preferred Securities after the replacement
Preferred Securities are issued and delivered. The prior Preferred Securities
shall be deemed to be cancelled as of the effective date of the applicable
amendment, and shall no longer be outstanding.
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 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;
40
47
(v) the 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.
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 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 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.
41
48
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
Scheduled Liquidation Amount of each such Definitive Preferred
Security,
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 written instrument of transfer in
form reasonably satisfactory to the Property Trustee and the Registrar, duly
executed by the Holder thereof or the Holder's 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 Accreted
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 Accreted 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 Accreted 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
42
49
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
Scheduled Liquidation Amount of Securities of authorized denominations
in the form of 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
writing.
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 Securities. 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 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.
43
50
(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.
(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 therein, 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.
44
51
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.
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 Security and receiving approvals, votes or
consents hereunder) as the Holder of the Preferred Securities and the sole
holder of the Global Preferred Security 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 Preferred Security 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 Holder of the Global Preferred Security to the Clearing Agency and
shall have no notice obligations to the Preferred Security Beneficial Owners.
45
52
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.
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.
46
53
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.
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
47
54
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, the Company Indemnified Person shall be
indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by such
Company Indemnified Person in connection therewith.
(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 the Company Indemnified Person 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.
48
55
(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 such Company Indemnified Person 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.
(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 such Company Indemnified
Person and incurred by such Company Indemnified Person in any such
capacity, or arising out of the status as such, whether or not the
Sponsor would have the power to indemnify such Company Indemnified
Person 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
49
56
this Section 10.4(a) with respect to the resulting or surviving entity
as he or she 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 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.
50
57
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 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.
51
58
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:
(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:
52
59
(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 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 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).
(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.
53
60
(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.
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 may then be 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 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 may then be
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 aggregate Accreted
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.
54
61
(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 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 may then be 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.
SECTION 12.3 Power of Attorney.
Each Holder, by acceptance of the Preferred Securities, hereby
irrevocably constitutes and appoints the Remarketing Agent and each of its
officers as the Holder's true and lawful representative and attorney-in-fact,
with full power and authority in the Holder's name, place and stead to make,
execute, acknowledge, deliver, swear to, record and file with respect to the
Preferred Securities any and all instruments, documents and certificates which,
from time to time, may be required in connection with the Remarketing of the
Preferred Securities and to take any other action which the Remarketing Agent
may deem necessary or appropriate, in its discretion, in connection with the
Remarketing of the Preferred Securities. This power of attorney is coupled with
an interest and shall continue in full force and effect and shall not be
affected by the subsequent death, disability, insolvency, bankruptcy,
termination or incapacity of
55
62
a Holder and may be exercised by an officer of the Remarketing Agent signing
individually for any Holder or for all Holders exercising any particular
instrument.
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
this Agreement have been duly authorized by all necessary corporate action on
the part of the Property Trustee; and this 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
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
56
63
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 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 II
c/o Hercules Incorporated
Hercules Plaza
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
57
64
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(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
Telephone: (000) 000-0000
Telecopier: (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
c/o Chase Manhattan Trust Company, N.A.
Xxx Xxxxxxx Xxxxx, 00xx Xxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Capital Markets Fiduciary Services
Telephone: (000) 000-0000
Telecopier: (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
Telephone: (000) 000-0000
Telecopier: (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
58
65
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.
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.
59
66
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.
Xxx X. Xxxx, not in her individual capacity
but solely as Administrative Trustee of the Trust
/s/ XXX X. XXXX
--------------------------------------
Xxxxxx X. Xxxxxx, not in his individual capacity
but solely as Administrative Trustee of the Trust
/s/ XXXXXX X. XXXXXX
---------------------------------------
Xxxxxx X. Xxxxx, not in his individual capacity
but solely as Administrative Trustee of the Trust
/s/ XXXXXX X. XXXXX
---------------------------------------
Chase Manhattan Bank Delaware, not in its
individual capacity but solely as Delaware
Trustee of the Trust
By: /s/ XXXXX XXXXX
------------------------------------
Name: Xxxxx Xxxxx
Title: Assistant Vice President
The Chase Manhattan Bank, not in its individual
capacity but solely as Property Trustee of the
Trust
By: /s/ XXXXXX X. XXXXXX
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Authorized Officer
60
67
Hercules Incorporated,
as Sponsor of the Trust
By: /s/ XXXXXX XXXXXXXXX
--------------------------------------
Name: Xxxxxx XxxXxxxxx
Title: Senior Vice President and
Chief Financial Officer
61
68
ANNEX I
TERMS OF
PREFERRED SECURITIES
COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Trust
Agreement of the Trust, dated as of July 27, 1999 (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 400,000 Preferred Securities of the
Trust, with an aggregate Scheduled Liquidation Amount with respect to the assets
of the Trust of Four Hundred Million Dollars ($400,000,000), and with a
Scheduled Liquidation Amount with respect to the assets of the Trust of $1,000
per security, are hereby designated for the purposes of identification only as
"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.
(b) Common Securities. Up to 12,372 Common Securities of the Trust,
with an aggregate Scheduled Liquidation Amount with respect to the assets of the
Trust of Twelve Million Three Hundred Seventy Two Thousand Dollars
($12,372,000), and with a Scheduled Liquidation Amount with respect to the
assets of the Trust of $1,000 per security, are hereby designated for the
purposes of identification only as "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 6.50% of the scheduled liquidation amount of $1,000 per Security (the
"Scheduled Liquidation Amount"), such rate being the rate of interest payable on
the Debentures to be held by the Property Trustee; provided, however, that
Distributions on each Security on and after a Reset Date, if any, will be
payable at the annual rate determined in the related Remarketing of the
Preferred Securities based on the Accreted Liquidation Amount thereof (for the
avoidance of doubt, the Distribution payable on the Distribution Date (as
defined below) immediately following a Reset Date shall be the sum of (i) the
Distributions accumulated from and including the last Distribution Date to but
excluding the Reset Date at the Distribution Rate (as defined below) in effect
prior to the Reset Date, plus (ii) the Distributions accumulated from and
including the Reset Date to but excluding the applicable Distribution
I-1
69
Date at the Distribution Rate determined in the Remarketing). Distributions in
arrears for more than one quarterly period will bear additional distributions
thereon compounded quarterly at the then applicable Distribution Rate (to the
extent permitted by applicable law). The term "Distributions," as used herein,
includes any such additional distributions unless otherwise stated. The term
"Distribution Rate," as used herein, means a rate per annum equal to 6.50% of
the Scheduled Liquidation Amount or, in the case of a Remarketing of Preferred
Securities, the annual rate determined in such Remarketing based on the Accreted
Liquidation Amount. A Distribution is payable only to the extent that payments
are made by the Sponsor in respect of the Debentures held by the Property
Trustee and to the extent the Property Trustee has funds legally available
therefor.
Upon the occurrence of a Reset Event (other than a Reset Event
within the meaning of clause (B) of the definition of a Trading Reset Event in
Article I of the Agreement), if any, the Sponsor shall select a date, not less
than 30 nor more than 60 days after the date notice is given to the Holders of
the Preferred Securities and not more than 70 days after the occurrence of such
Reset Event, on which the Remarketing of the Preferred Securities shall occur
and modifications to the terms of the Preferred Securities and the Debentures
referred to herein shall become effective (the "Reset Date"). Upon the
occurrence of a Reset Event within the meaning of clause (B) of the definition
of a Trading Reset Event in Article I of the Agreement, the "Reset Date" shall
automatically be the date 15 Business Days prior to the Expiration Date of the
Warrants.
Notwithstanding the foregoing, there shall not be a "Reset
Date" if (i) in the case of a Trading Reset Event, an Event of Default under the
Agreement or a deferral of Distributions to Holders of the Preferred Securities
has occurred and is continuing; (ii) in the case of a Trading Reset Event, the
closing price of the Sponsor's common stock on the New York Stock Exchange (or,
if not then listed on such exchange, any other national securities exchange) as
of fifth Business Day preceding the Reset Date or as of the Reset Date is less
than the Exercise Price Per Share (determined without regard to the Reset Date);
(iii) in the case of a Trading Reset Event, (A) the Shelf Registration Statement
is not effective under the Securities Act or (B) the Sponsor shall have notified
the Warrant Agent under the Warrant Agreement, which notice shall not have been
withdrawn by it, that it is unable as of the Reset Date to deliver a then
current Prospectus to exercising holders of the Warrants; or (iv) the
Remarketing Agent is unable to Remarket all of the Preferred Securities to be
Remarketed at the Remarketing Rate prior to the close of business on the fifth
Business Day following the Reset Date or all of the conditions precedent to such
Remarketing referred to in the Agreement have not been fulfilled (a "Failed
Remarketing").
The Administrative Trustees will give notice of a Failed
Remarketing to all Holders of the Preferred Securities and to the Property
Trustee and the Delaware Trustee prior to the close of business on the sixth
Business Day following the Reset Date. Following a Failed Remarketing (or the
absence of a Remarketing due to a failure to satisfy one of the other conditions
referred to above), (i) in the case of a Trading Reset Event, the Preferred
Securities may be Remarketed again, in the manner described in the Agreement if
a Reset Event subsequently occurs and (ii) in the case of an Acquisition Reset
Event, the Preferred Securities shall be Remarketed every fifteenth day
thereafter until there has been a successful Remarketing, in which case the date
of the successful Remarketing will be the "Reset Date."
I-2
70
The Sponsor shall notify the Trustee and the Debenture Trustee
within five Business Days after the occurrence of a Reset Date.
(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 and including July 27, 1999, to but
excluding the related Distribution Date or Redemption Date (as defined below)
and will be payable quarterly in arrears on March 31, June 30, September 30 and
December 31 of each year, commencing September 30, 1999, (each, a "Distribution
Date"), and on the Redemption 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. "Distribution
Period" means the period from and including the immediately preceding
Distribution Date (or July 27, 1999, in the case of the first Distribution
Period), to but excluding the applicable Distribution Date, or Redemption Date,
as the case may be. If a Distribution Date is not a Business Day, then such
Distribution will be made on the next succeeding Business Day. However, if the
next succeeding Business Day is in the next succeeding calendar year, such
Distribution will be made on the immediately preceding 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 20
consecutive quarterly periods (each quarterly period as to which quarterly
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 of the Debentures, as the case may be. As a consequence of
such deferral, Distributions on the Securities will also be deferred during an
Extension Period. Despite such deferral, quarterly 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
quarterly 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 20 consecutive
quarterly 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 of
the Debentures, as the case may be. 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 immediately preceding such Distribution Date. If the Preferred Securities
are ever issued in the form of Definitive Preferred Securities, the record date
for the payment of Distributions shall be the 15th day of the calendar
I-3
71
month in which the Distribution Date occurs, even if that day is not a Business
Day. 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) 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 Accreted Liquidation Amount 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 an aggregate Scheduled Liquidation Amount equal to
the aggregate 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, Debentures having an aggregate principal amount equal to the
aggregate Scheduled 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 on their stated
maturity date or date of earlier redemption, 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 on their stated maturity date, the Maturity
Redemption Price (as defined below) and (ii) in the case of the redemption of
the Debentures following the Remarketing of the Preferred Securities, the
Optional Redemption Price (as defined below). The Maturity Redemption Price and
the Optional Redemption Price are referred
I-4
72
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 in accordance with Section 4(e). 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) The "Maturity Redemption Price" shall mean a price equal
to the Scheduled Liquidation Amount of the Securities plus accumulated and
unpaid Distributions thereon, if any, to the Redemption Date. The "Optional
Redemption Price" shall mean a price equal to the Accreted Liquidation Amount of
the Securities plus accumulated and unpaid Distributions thereon, if any, to the
Redemption Date.
(c) If fewer than all the outstanding Securities are to be so
redeemed, the Securities will be redeemed on a Pro Rata basis and the Preferred
Securities to be redeemed will be determined as described in Section 4(e)(ii)
below.
(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 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 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 (with a copy
to the Property Trustee) 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(e)(i), a
Redemption/Distribution Notice shall be deemed to be given on
the day such notice is first mailed by first-class mail,
postage prepaid, to Holders of 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.
I-5
73
(ii) In the event that fewer than all the outstanding
Preferred Securities are to be redeemed, the Preferred
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 the 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 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
I-6
74
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 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 the
principal of or interest on the Debentures on the date such principal 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 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
I-7
75
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 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 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 interest on the Debentures on the date such principal or interest is
otherwise payable (or, in the case of redemption, on the Redemption
I-8
76
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 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 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 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
Administrative 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.
I-9
77
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 Scheduled Liquidation Amount of the Securities held by such
Holder in relation to the aggregate Scheduled 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 be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate Scheduled Liquidation
Amount of Preferred Securities held by such Holder relative to the aggregate
Scheduled 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 Scheduled Liquidation Amount of Common Securities held by such Holder
relative to the aggregate Scheduled 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 other 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-10
78
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
THIS PREFERRED SECURITY IS A GLOBAL PREFERRED SECURITY WITHIN THE MEANING OF THE
TRUST AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "DEPOSITORY") OR A NOMINEE OF THE DEPOSITORY. THIS
PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE TRUST AGREEMENT AND NO TRANSFER OF THIS PREFERRED
SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED SECURITY AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO
THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY 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.
Certificate Number PS- Number of Preferred Securities Up to:
--- ---------
CUSIP No. 427 098 207
Certificate Evidencing Preferred Securities
of
HERCULES TRUST II
Trust II Preferred Securities
(scheduled liquidation amount $1,000 per Preferred Security)
HERCULES TRUST II, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that CEDE & CO. (the
"Holder") is the registered owner of up to ________ preferred securities of the
Trust representing undivided beneficial interests in the assets of the Trust
designated as the Trust II Preferred Securities (scheduled liquidation amount
$1,000 per Preferred Security) (the "Preferred Securities") as reflected on the
Schedule of Exchanges of Interests of Global Preferred Security attached hereto.
The Preferred Securities are transferable on the books and records of the Trust,
in person or by a duly authorized attorney, upon surrender of
A1-1
79
this certificate duly endorsed and in proper form for transfer and otherwise
complies with the terms of this Preferred Security.
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 July 27, 1999, as the same
may be amended from time to time (the "Trust Agreement"), including the
designation of the terms of the Preferred Securities as set forth in Annex I to
the Trust Agreement. Capitalized terms used but not defined herein shall have
the respective meanings given them in the Trust Agreement. The Sponsor will
provide a copy of the Trust 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 Trust
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
80
IN WITNESS WHEREOF, the Trust has executed this certificate this 27th
day of July, 1999.
HERCULES TRUST II
By:
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Trust Agreement.
THE CHASE MANHATTAN BANK,
as Property Trustee
By:
------------------------------------
Authorized Signatory
A1-3
81
[REVERSE OF PREFERRED SECURITY]
Distributions on this Preferred Security will be payable at a rate per
annum of 6 1/2% of the Scheduled Liquidation Amount of $1,000 per Preferred
Security (the "Scheduled Liquidation Amount"), such rate being the rate of
interest payable on the Debentures to be held by the Property Trustee, except
that if the Preferred Securities are Remarketed, Distributions on this Preferred
Security on and after the Reset Date will be payable at the annual distribution
rate established in the Remarketing on the Accreted Liquidation Amount of this
Preferred Security. Distributions not paid when due will themselves accumulate
distributions at the then applicable annual rate (to the extent permitted by
law). The term "Distributions," as used herein, includes any such additional
distributions unless otherwise stated. The term "Distribution Rate," as used
herein, means a rate per annum equal to 6 1/2% of the Scheduled Liquidation
Amount or, in the case of a Remarketing, the annual rate established thereby
based on the Accreted Liquidation Amount. 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 on hand legally
available therefor.
Distributions on the Preferred Securities will be cumulative, will
accumulate from and including the most recent date on which Distributions have
been paid or, if no Distributions have been paid, from and including July 27,
1999, to but excluding the relevant Distribution Date (as defined below) or any
date fixed for redemption (a "Redemption Date"), and will be payable quarterly
in arrears on March 31, June 30, September 30 and December 31 of each year,
commencing on September 30, 1999 (each, a "Distribution Date"), except as
otherwise described below and in the Trust Agreement. The amount of
Distributions payable for any period shall be computed on the basis of a 360-day
year consisting of twelve 30-day months. "Distribution Period" means the period
from and including the immediately preceding Distribution Date (or July 27,
1999, 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 will be made on the next succeeding
Business Day (and without any interest or other payment in respect of such
delay), except if such Business Day is in the next succeeding calendar year,
such Distribution will be made on the immediately preceding 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 20 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 date of earlier redemption for the Debentures. As a
consequence of such deferral, Distributions will also be deferred. Despite such
deferral, quarterly Distributions will continue to accumulate with additional
distributions thereon (to the extent permitted by 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 quarterly 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
A1-4
82
Period, together with all such previous and further extensions, may not exceed
20 consecutive quarterly 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 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 thereof) and the payment of all amounts then due, the
Debenture Issuer may commence a new Extension Period, subject to the foregoing
requirements.
Subject to certain conditions set forth in the Trust Agreement and the
Indenture, the Property Trustee may, at the direction of the Sponsor, dissolve
the Trust at any time and cause the Debentures to be distributed to the Holders
of the Preferred Securities in liquidation of the Trust or, simultaneously with
the maturity or any redemption of the Debentures, cause a Like Amount of the
Preferred Securities to be redeemed by the Trust.
The Preferred Securities shall be redeemable as provided in the Trust
Agreement.
Upon a Remarketing, certain terms of the Preferred Securities referred
to in the Trust Agreement will be modified as of the Reset Date.
A1-5
83
-----------------------
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(1):
-------------------------------------
----------
(1) Signature must be guaranteed by an "eligible guarantor institution" 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 Exchange Act of 1934, as amended.
A1-6
84
SCHEDULE OF EXCHANGES OF INTERESTS OF GLOBAL PREFERRED SECURITY
Unless otherwise specified below, the Preferred Securities represented
by this Global Preferred Security shall have a zero balance.
The following exchanges of a part of this Global Preferred Security have been
made:
Amount of increase in
number of Preferred Number of Preferred Signature of
Securities in this Securities in this Global authorized
Global Preferred Preferred Security signatory of
Date of Exchange Security following such increase Property Trustee
---------------- --------------------- ------------------------- ----------------
A1-7
85
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
TRANSFER OF THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS SET FORTH IN THE TRUST
AGREEMENT REFERRED TO BELOW.
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD UNLESS SUCH OFFER AND SALE ARE REGISTERED UNDER OR ARE EXEMPT
FROM REGISTRATION UNDER THE SECURITIES ACT.
Certificate Number CS-001 Number of Common Securities: 10,825
Certificate Evidencing Common Securities
of
HERCULES TRUST II
Trust II Common Securities
(scheduled liquidation amount $1,000 per Common Security)
HERCULES TRUST II, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that Hercules Incorporated
(the "Holder") is the registered owner of 10,825 common securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated as the Trust II Common Securities (scheduled liquidation amount
$1,000 per common security) (the "Common Securities"). The Common 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 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 July 27, 1999, as the same
may be amended from time to time (the "Trust Agreement"), including the
designation of the terms of the Common Securities as set forth in Annex I to the
Trust Agreement. Capitalized terms used but not defined herein shall have the
respective meanings given them in the Trust Agreement. The Sponsor will provide
a copy of the Trust 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 Trust
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
86
IN WITNESS WHEREOF, the Trust has executed this certificate this 27th
day of July, 1999.
HERCULES TRUST II
By:
-----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Administrative Trustee
A2-2
87
[REVERSE OF COMMON SECURITY CERTIFICATE]
Distributions on this Common Security will be payable at a rate per
annum of 6 1/2% of the Scheduled Liquidation Amount of $1,000 per Common
Security (the "Scheduled Liquidation Amount"), such rate being the rate of
interest payable on the Debentures to be held by the Property Trustee, except
that if the Preferred Securities are Remarketed, Distributions on this Common
Security will be payable at the annual distribution rate established in the
Remarketing on the Accreted Liquidation Amount of this Common Security.
Distributions not paid when due will themselves accumulate distributions at the
then applicable annual rate (to the extent permitted by law). The term
"Distributions," as used herein, includes any such additional distributions
unless otherwise stated. The term "Distribution Rate," as used herein, means a
rate per annum equal to 6 1/2% of the Scheduled Liquidation Amount or, in the
case of a Remarketing, the annual rate established thereby based on the Accreted
Liquidation Amount. 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 on hand legally available therefor.
Distributions on the Common Securities will be cumulative, will
accumulate from and including the most recent date on which Distributions have
been paid or, if no Distributions have been paid, from and including July 27,
1999, to but excluding the relevant Distribution Date (as defined below) or any
date fixed for redemption (a "Redemption Date") and will be payable quarterly in
arrears on March 31, June 30, September 30 and December 31 of each year,
commencing on September 30, 1999 (each, a "Distribution Date"), except as
otherwise described below and in the Trust Agreement. The amount of
Distributions payable for any period shall be computed on the basis of a 360-day
year consisting of twelve 30-day months. "Distribution Period" means the period
from and including the immediately preceding Distribution Date (or July 27,
1999, 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 will be made on the next succeeding
Business Day (and without any interest or other payment in respect of such
delay), except if such Business Day is in the next succeeding calendar year,
such Distribution will be made on the immediately preceding 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 20 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 date of earlier redemption for the Debentures. As a
consequence of such deferral, Distributions will also be deferred. Despite such
deferral, quarterly Distributions will continue to accumulate with additional
distributions thereon (to the extent permitted by 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 quarterly 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 20 consecutive
A2-3
88
quarterly 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 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 thereof) and the payment of all amounts then due, the Debenture
Issuer may elect a new Extension Period, subject to the foregoing requirements.
Subject to certain conditions set forth in the Trust Agreement and the
Indenture, the Property Trustee may, at the direction of the Sponsor, dissolve
the Trust at any time and cause the Debentures to be distributed to the Holders
of the Common Securities in liquidation of the Trust or simultaneously with the
maturity or any redemption of the Debentures, cause a Like Amount of the Common
Securities to be redeemed by the Trust.
The Common Securities shall be redeemable as provided in the Trust
Agreement.
Upon Remarketing, certain terms of the Common Securities referred to in
the Trust Agreement will be modified as of the Reset Date.
A2-4
89
-----------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
---------------------------------------------------------------
(Insert assignee's social security or tax identification number)
---------------------------------------------------------------
---------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints _________________________________________________ agent
to transfer this Common Security Certificate on the books of the Trust. The
agent may substitute another to act for him or her.
Date:
--------------
Signature:
--------------------------------------------
(Sign exactly as your name appears on the
other side of this Common Security Certificate)
Signature Guarantee(1):
-------------------------------
--------------------
(1) Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the 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 Exchange
Act of 1934, as amended.
A2-5
