AMENDED AND RESTATED DECLARATION OF TRUST
Published on March 19, 1997
EXHIBIT 4.1
CONFORMED COPY
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AMENDED AND RESTATED DECLARATION
OF TRUST
RENAISSANCERE CAPITAL TRUST
dated as of March 7, 1997
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TABLE OF CONTENTS
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Page
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ARTICLE I. INTERPRETATION AND DEFINITIONS....................................1
SECTION 1.1. Definitions..........................................1
ARTICLE II. TRUST INDENTURE ACT..............................................9
SECTION 2.1. Trust Indenture Act; Application.....................9
SECTION 2.2. Lists of Holders of Securities......................10
SECTION 2.3. Reports by the Property Trustee.....................10
SECTION 2.4. Periodic Reports to Property Trustee................10
SECTION 2.5. Evidence of Compliance with Conditions
Precedent...........................................11
SECTION 2.6. Events of Default; Waiver...........................11
SECTION 2.7. Event of Default; Notice............................13
ARTICLE III. ORGANIZATION...................................................13
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............................................18
SECTION 3.8. Powers and Duties of the Property Trustee...........18
SECTION 3.9. Certain Duties and Responsibilities of the
Property Trustee....................................21
SECTION 3.10. Certain Rights of Property Trustee..................23
SECTION 3.11. Delaware Trustee....................................25
SECTION 3.12. Execution of Documents..............................26
SECTION 3.13. Not Responsible for Recitals or Issuance of
Securities..........................................26
SECTION 3.14. Duration of Trust...................................26
SECTION 3.15. Mergers.............................................26
ARTICLE IV. SPONSOR.........................................................28
SECTION 4.1. Sponsor's Purchase of Common Securities.............28
SECTION 4.2. Responsibilities of the Sponsor.....................28
SECTION 4.3. Right to Proceed....................................29
ARTICLE V. TRUSTEES.........................................................29
SECTION 5.1. Number of Trustees; Appointment of Co-Trustee.......29
SECTION 5.2. Delaware Trustee....................................30
SECTION 5.3. Property Trustee; Eligibility.......................30
SECTION 5.4. Certain Qualifications of Administrative
Trustees and Delaware Trustee Generally.............31
SECTION 5.5. Administrative Trustees.............................31
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SECTION 5.6. Delaware Trustee....................................32
SECTION 5.7. Appointment, Removal and Resignation of
Trustees............................................32
SECTION 5.8. Vacancies among Trustees............................34
SECTION 5.9. Effect of Vacancies.................................34
SECTION 5.10. Meetings............................................34
SECTION 5.11. Delegation of Power.................................35
SECTION 5.12. Merger, Conversion, Consolidation or
Succession to Business..............................35
ARTICLE VI. DISTRIBUTIONS...................................................35
SECTION 6.1. Distributions.......................................35
ARTICLE VII. ISSUANCE OF SECURITIES.........................................36
SECTION 7.1. General Provisions Regarding Securities.............36
SECTION 7.2. Execution and Authentication........................36
SECTION 7.3. Form and Dating.....................................37
SECTION 7.4. Registrar and Paying Agent..........................42
SECTION 7.5. Paying Agent to Hold Money in Trust.................42
SECTION 7.6. Replacement Securities..............................43
SECTION 7.7. Outstanding Capital Securities......................43
SECTION 7.8. Capital Securities in Treasury......................43
SECTION 7.9. Temporary Securities................................44
SECTION 7.10. Cancellation........................................44
SECTION 7.11. CUSIP Numbers.......................................44
ARTICLE VIII. DISSOLUTION OF TRUST..........................................45
SECTION 8.1. Dissolution of Trust................................45
ARTICLE IX. TRANSFER OF INTERESTS...........................................46
SECTION 9.1. Transfer of Securities..............................46
SECTION 9.2. Transfer Procedures and Restrictions................47
SECTION 9.3. Deemed Security Holders.............................56
SECTION 9.4. Book Entry Interests................................56
SECTION 9.5. Notices to Clearing Agency..........................57
SECTION 9.6. Appointment of Successor Clearing Agency............57
ARTICLE X. LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES
OR OTHERS.................................................57
SECTION 10.1. Liability...........................................57
SECTION 10.2. Exculpation.........................................58
SECTION 10.3. Fiduciary Duty......................................58
SECTION 10.4. Indemnification.....................................59
SECTION 10.5. Outside Businesses..................................63
ARTICLE XI. ACCOUNTING......................................................64
SECTION 11.1. Fiscal Year.........................................64
SECTION 11.2. Certain Accounting Matters..........................64
SECTION 11.3. Banking.............................................64
SECTION 11.4. Withholding.........................................65
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ARTICLE XII. AMENDMENTS AND MEETINGS........................................65
SECTION 12.1. Amendments..........................................65
SECTION 12.2. Meetings of the Holders of Securities; Action
by Written Consent..................................67
ARTICLE XIII. REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE......69
SECTION 13.1. Representations and Warranties of Property
Trustee.............................................69
SECTION 13.2. Representations and Warranties of Delaware
Trustee.............................................70
ARTICLE XIV. REGISTRATION RIGHTS............................................71
Section 14.1. Registration Rights Agreement; Liquidated
Damages.............................................71
ARTICLE XV. MISCELLANEOUS...................................................71
SECTION 15.1. Notices.............................................71
SECTION 15.2. Governing Law.......................................72
SECTION 15.3. Intention of the Parties............................72
SECTION 15.4. Headings............................................72
SECTION 15.5. Successors and Assigns..............................73
SECTION 15.6. Partial Enforceability..............................73
SECTION 15.7. Counterparts........................................73
ANNEX I: TERMS OF SECURITIES
EXHIBIT A-1: FORM OF CAPITAL SECURITIES
EXHIBIT A-2: FORM OF COMMON SECURITIES
EXHIBIT B-1: FORM OF NON-U.S. CERTIFICATE
EXHIBIT B-2: FORM OF REGULATION S CERTIFICATE
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AMENDED AND RESTATED DECLARATION OF TRUST ("Trust Agreement") dated
and effective as of March 7, 1997, by the Trustees (as defined herein) and the
Sponsor (as defined herein);
WHEREAS, the Trustees and the Sponsor established RenaissanceRe
Capital Trust (the "Trust"), a statutory business trust formed under the
Business Trust Act (as defined herein) pursuant to a Declaration of Trust
dated as of February 25, 1997(the "Original Declaration"), and a Certificate
of Trust filed with the Secretary of State of the State of Delaware on
February 25,1997;
WHEREAS, as of the date hereof, no interests in the Trust have
been issued;
WHEREAS, all of the Trustees and the Sponsor, by this Trust
Agreement, amend and restate each and every term and provision of the
Original Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Trust 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 Trust Agreement.
ARTICLE I.
INTERPRETATION AND DEFINITIONS
SECTION 1.1. Definitions.
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Unless the context otherwise requires:
(a) Capitalized terms used in this Trust 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 Trust Agreement has the same
meaning throughout;
(c) all references to "the Trust Agreement" or "this Trust
Agreement" are to this Trust Agreement (including AnnexaI hereto and
Exhibit A hereto) as modified, supplemented or amended from time to
time;
(d) all references in this Trust Agreement to Articles and
Sections and Annexes and Exhibits are to Articles and Sections of and
Annexes and Exhibits to this Trust Agreement unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Trust Agreement unless otherwise defined in
this Trust Agreement or the context otherwise requires; and
(f) a term defined in the Indenture (as defined below) has the
same meaning when used in this Trust Agreement unless otherwise defined
in this Trust Agreement or the context otherwise requires;
(g) a reference to the singular includes the plural and vice
versa.
"Administrative Trustee" has the meaning set forth in Section 5.1.
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"Affiliate" has the same meaning as given to that term in Rule
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405 under the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent, Registrar or Exchange Agent.
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"Authorized Officer" of a Person means any other Person that is
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duly authorized to legally bind such former Person.
"Beneficial Owner" means, with respect to a Book Entry Interest,
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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 Participant
or as an indirect participant, in each case in accordance with the rules of
such Clearing Agency).
"Book Entry Interest" means a beneficial interest in a Global
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Capital Security registered in the name of a Clearing Agency or its nominee,
ownership of which shall be maintained and transfers of which shall be made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday or a Sunday or
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a day on which banking institutions in The City of New York, New York are
authorized or required by law or executive order to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
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Code, 12 Del. Code (S) 3801 et seq., as it may be amended from time to time or
any successor legislation.
"Capital Securities" means the Series A Capital Securities and/or
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the Series B Capital Securities, as appropriate.
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"Capital Securities Guarantee" means the guarantee agreement
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dated as of March 7, 1997 of the Sponsor in respect of the Capital Securities.
"Cedel" means Cedel, S.A.
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"Clearing Agency" means an organization registered as a "Clearing
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Agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the Capital 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
Capital Securities.
"Closing Time" means the "Closing Time" under the Purchase
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Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from
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time to time, or any successor legislation.
"Commission" means the United States Securities and Exchange
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Commission as from time to time constituted, or if at any time after the
execution of this Trust Agreement such Commission is not existing and
performing the duties now assigned to it under applicable Federal securities
laws, then the body performing such duties at such time.
"Common Securities" has the meaning specified in Section 7.1(a).
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"Common Securities Guarantee" means the guarantee agreement dated
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as of March 7, 1997 of the Sponsor in respect of the Common Securities.
"Company Indemnified Person" means (a) any Administrative
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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.
"Corporate Trust Office" means the office of the Property Trustee
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at which the corporate trust business of the Property Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at 101 Barclay Street, 21-W, New York,
NY 10286, Attention: Corporate Trust Administration.
"Covered Person" means: (a) any officer, director, shareholder,
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partner, member, representative, employee or agent of (i) the Trust or (ii)
the Trust's Affiliates; and (b) any Holders of Securities.
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"Debenture Issuer" means RenaissanceRe Holdings Ltd., a Bermuda
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company, 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.
"Debenture Trustee" means The Bank of New York, a New York
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banking corporation, as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.
"Debentures" means the 8.54% Junior Subordinated Deferrable
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Interest Debentures due March 1, 2027 of the Debenture Issuer issued pursuant
to the Indenture (including, as applicable, those Debentures issued upon
consummation of the Exchange Offer).
"Definitive Capital Securities" shall have the meaning set forth
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in Section 7.3(c).
"Delaware Trustee" has the meaning set forth in Section 5.2.
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"Direct Action" shall have the meaning set forth in Section
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3.8(e).
"Distribution" means a distribution payable to Holders of
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Securities in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing
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Agency.
"Euroclear" means the Euroclear System.
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"Event of Default" in respect of the Capital Securities means an
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Event of Default as defined in the Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as
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amended from time to time, or any successor legislation.
"Exchange Agent" has the meaning set forth in Section 7.4
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"Exchange Offer" means the exchange offer (including any private
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exchange offer) contemplated in Section 2(a) of the Registration Rights
Agreement.
"Fiduciary Indemnified Person" has the meaning set forth in
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Section 10.4(b).
"Global Capital Securities" means the Regulation S Global Capital
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Securities, the Rule 144A Global Capital Securities and the Unrestricted
Global Capital Securities.
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"Holder" means a Person in whose name a Security is registered,
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such Person being a beneficial owner within the meaning of the Business Trust
Act.
"Indemnified Person" means a Company Indemnified Person or a
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Fiduciary Indemnified Person.
"Indenture" means the Indenture, dated as of March 7, 1997, among
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the Debenture Issuer and the Debenture Trustee, as amended or supplemented
from time to time.
"Investment Company" means an investment company as defined in
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the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
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1940, as amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
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"Like Amount" has the meaning set forth in Annex I.
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"Liquidation Amount" with respect to any Security means the
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amount designated as such with respect thereto in Annex I hereto.
"Majority in Liquidation Amount" means, with respect to the Trust
------------------------------
Securities, Holder(s) of outstanding Trust Securities voting together as a
single class who are the record owners of more than 50% of the aggregate
Liquidation Amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions
to the date upon which the voting percentages are determined) of all
outstanding Securities of the relevant class.
"Maturity" has the meaning specified in the Indenture.
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"Offering Memorandum" has the meaning set forth in Section 3.6(b).
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"Officers' Certificate" means, with respect to any Person, a
---------------------
certificate signed by the Chairman, a Vice Chairman, the Chief Executive
Officer, the President, a Senior Vice President, a Vice President, or the
Secretary or an Assistant Secretary of such Person or in the case of the
Trust, an Administrative Trustee. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this Trust
Agreement shall include:
(a) a statement that each officer signing the Certificate has
read the covenant or condition and the definitions relating thereto;
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(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the 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.
"Opinion of Counsel" shall mean a written opinion of counsel, who
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may be an employee of the Sponsor, and who shall be acceptable to the
Property Trustee, which acceptance shall not be unreasonably withheld.
"Participants" has the meaning set forth in Section 7.3(b).
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"Paying Agent" has the meaning specified in Section 7.4.
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"Person" means a legal person, including any individual,
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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.
"Property Trustee" has the meaning set forth in Section 5.3(a).
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"Property Trustee Account" has the meaning set forth in
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Section 3.8(c).
"Purchase Agreement" means the Purchase Agreement for the initial
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offering and sale of Capital Securities.
"QIBs" shall mean qualified institutional buyers as defined in
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Rule 144A.
"Quorum" means a majority of the Administrative Trustees or, if
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there are only two Administrative Trustees, both of them.
"Registrar" has the meaning set forth in Section 7.4.
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"Registration Rights Agreement" means the Registration Rights
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Agreement, dated as of the Closing Date, by and among the Sponsor, the Trust
and the initial purchasers named therein, as such agreement may be amended,
modified or supplemented from time to time.
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"Regulation S" means Regulation S under the Securities Act, as
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such regulation may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission.
"Regulation S Global Capital Security" has the meaning set forth
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in Section 7.3(a).
"Regulation S Permanent Global Capital Security" has the meaning
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specified in Section 7.3(d).
"Regulation S Temporary Global Capital Security" has the meaning
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specified in Section 7.3(d).
"Related Party" means, with respect to the Sponsor, any direct or
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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.
"Release Date" shall have the meaning set forth in Section 7.3(d).
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"Responsible Officer" means, with respect to the Property
-------------------
Trustee, any officer within the Corporate Trust Office of the Property
Trustee, including any vice president, any assistant vice president, any
assistant secretary, the treasurer, 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 to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Restricted Capital Security" means a Capital Security required
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by Section 9.2 to contain a Restricted Securities Legend.
"Restricted Definitive Capital Securities" has the meaning set
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forth in Section 7.3(c).
"Restricted Global Capital Security" has the meaning set forth in
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Section 7.3.
"Restricted Period" means the 40-day restricted period running
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from the Closing Time through, but not including, the Release Date, as
provided in Regulation S.
"Restricted Securities Legend" has the meaning set forth in
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Section 9.2.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act, or
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any successor rule or regulation.
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"Rule 144" means Rule 144 under the Securities Act, as such rule
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may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission.
"Rule 144A" means Rule 144A under the Securities Act, as such
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rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.
"Rule 144A Global Capital Security" has the meaning set forth in
---------------------------------
Section 7.3(a).
"Securities" or "Trust Securities" means the Common Securities
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and the Capital Securities (including, as applicable, the Series A Capital
Securities and the Series B Capital 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
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the Capital Securities Guarantee.
"Series A Capital Securities" has the meaning specified in
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Section 7.1(a).
"Series B Capital Securities" has the meaning specified in
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Section 7.1(a).
"Special Event" has the meaning set forth in the Indenture.
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"Special Event Redemption" has the meaning set forth in the
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Indenture.
"Sponsor" means RenaissanceRe Holdings Ltd., a Bermuda company,
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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
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5.7(b).
"Successor Entity" has the meaning set forth in Section 3.15(b).
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"Successor Property Trustee" has the meaning set forth in Section
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5.7(b).
"Successor Securities" has the meaning set forth in Section
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3.15(b).
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
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"10% in Liquidation Amount" means, with respect to the Trust
-------------------------
Securities, Holder(s) of outstanding Trust Securities voting together as a
single class or, as the context may require, Holders of outstanding Capital
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of 10% of the aggregate Liquidation Amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all outstanding Securities of the
relevant class.
"Treasury Regulations" means the income tax regulations,
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including temporary and proposed regulations, promulgated under the Code by
the United States Treasury, as such regulations may be amended from time to
time (including corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
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Trust Agreement as a trustee (including the Property Trustee, the Delaware
Trustee and Administrative Trustee), so long as such Person shall continue in
office in accordance with the terms hereof, and all other Persons who may
from time to time be duly appointed, qualified and serving as Trustees in
accordance with the provisions hereof, and references herein to a Trustee or
the Trustees shall refer to such Person or Persons solely in their capacity
as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
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amended from time to time, or any successor legislation.
"Unrestricted Global Capital Security" has the meaning set forth
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in Section 9.2(b).
ARTICLE II.
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
--------------------------------
(a) This Trust Agreement is subject to the provisions of the
Trust Indenture Act that are required to be part of this Trust Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Trust
Agreement limits, qualifies or conflicts with the duties imposed by (S)(S) 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control, except as expressly provided herein.
(d) The application of the Trust Indenture Act to this Trust
Agreement shall not affect the nature of the Securities as
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equity securities representing undivided beneficial interests in the assets of
the Trust.
SECTION 2.2. Lists of Holders of Securities.
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(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, with a list (i) within 14 days after
each record date for payment of Distributions, in such form as the Property
Trustee may reasonably require, of the names and addresses of the Holders of
the Securities ("List of Holders") as of such record date, provided that
neither the Sponsor nor the Administrative Trustees on behalf of the Trust
shall be obligated to provide such List of Holders at any time the List of
Holders does not differ from the most recent List of Holders given to the
Property Trustee by the Sponsor and the Administrative Trustees on behalf of
the Trust, and (ii) at any other time, within 30 days of receipt by the
Property Trustee of a written request for a List of Holders as of a date no
more than 14 days before such List of Holders is given to the Property
Trustee. The Property Trustee shall preserve, in as current a form as is
reasonably practicable, all information contained in a List of Holders given
to it or which it receives in the capacity as Paying Agent (if acting in such
capacity), provided that the Property Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under
(S)(S) 311(a), 311(b) and 312(b) of the Trust Indenture Act
SECTION 2.3. Reports by the Property Trustee.
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Within 60 days after December 15 of each year, commencing
December 15, 1997, the Property Trustee shall provide to the Holders of the
Capital Securities such reports as are required by (S) 313 of the Trust
Indenture Act, if any, in the form and in the manner provided by (S) 313 of the
Trust Indenture Act. The Property Trustee shall also comply with the
requirements of (S) 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 (S) 314 (if any) and the compliance certificate
required by (S) 314 of the Trust Indenture Act in the form, in the manner and
at the times required by (S) 314 of the Trust Indenture Act.
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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 Trust Agreement that
relate to any of the matters set forth in (S) 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given by an officer pursuant
to (S) 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.
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(a) The Holders of a Majority in Liquidation Amount of Capital
Securities may, by vote, on behalf of the Holders of all of the Capital
Securities, waive any past Event of Default in respect of the Capital
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 this Trust Agreement shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
aggregate principal amount of the holders of the Debentures (a "Super
Majority") to be waived under the Indenture, the Event of Default under
this Trust Agreement may only be waived by the vote of the Holders of
at least the proportion in aggregate Liquidation Amount of the Capital
Securities that the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of
(S) 316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Trust 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 Capital Securities arising therefrom shall be deemed to have
been cured, for every purpose of this Trust Agreement, but no such waiver
shall extend to any subsequent or other default or an Event of Default with
respect to the Capital Securities or impair any right consequent thereon.
Any waiver by the Holders of the Capital Securities of an Event of Default
with respect to the Capital 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 Trust
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
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with respect to the Common Securities and its consequences, provided that, if
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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 this Trust Agreement as provided below in this Section
2.6(b), the Event of Default under the Trust Agreement shall also not
be waivable; or
(ii) requires the consent or vote of a Super Majority to be
waived, except where the Holders of the Common Securities are deemed to
have waived such Event of Default under this Trust Agreement as
provided below in this Section 2.6(b), the Event of Default under the
Trust Agreement may only be waived by the vote of the Holders of at
least the proportion in aggregate Liquidation Amount of the Common
Securities that the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding;
provided further, each Holder of Common Securities will be deemed to have
- -------- -------
waived any such Event of Default and all Events of Default with respect to
the Common Securities and its consequences if all Events of Default with
respect to the Capital 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 Capital Securities and only the Holders of
the Capital 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 (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of
the Trust Indenture Act and such (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act are hereby expressly excluded from this Trust 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 Trust 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 Debentures,
constitutes a waiver of the corresponding Event of Default with respect to
the Trust Securities under this Trust Agreement. The foregoing provisions of
this Section 2.6(c) shall be in lieu of (S) 316(a)(1)(B) of the Trust Indenture
Act and such (S) 316(a)(1)(B) of the Trust Indenture Act is hereby expressly
excluded from this Trust
12
Agreement and the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7. Event of Default; Notice.
------------------------
(a) The Property Trustee shall, within five days after the
occurrence of an Event of Default actually known to the Property Trustee,
transmit by mail, first class postage prepaid, to the Holders of the
Securities, the Administrative Trustees and the Sponsor, unless such Event of
Default has been cured before the giving of such notice; provided that,
except for a default in the payment of principal of or premium, if any, or
interest on any of the Debentures, the Property Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the
Property Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders of the Securities.
(b) For purposes of this Section 2.7, the Property Trustee shall
not be deemed to have knowledge of any default or Event of Default except:
(i) a default under Sections 5.1(1) and 5.1(2) of the Indenture;
or
(ii) any default as to which the Property Trustee shall have
received written notice or of which a Responsible Officer of the
Property Trustee charged with the administration of the Trust Agreement
shall have actual knowledge.
(c) 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 Trust Agreement.
ARTICLE III.
ORGANIZATION
SECTION 3.1. Name.
----
The Trust is named "RenaissanceRe Capital Trust" as such name may
be modified from time to time by the Administrative Trustees following
written notice to 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 The Bank
of New York, 101 Barclay Street - 21W, New York, NY 10286, Attention:
Corporate Trust Administration, with a copy to RenaissanceRe Holdings Ltd.,
Renaissance House, 8-12 East
13
Broadway, Pembroke HM 19 Bermuda. On ten Business Days' prior written notice to
the Holders of Securities, the Administrative Trustees may designate another
principal office within the United States.
SECTION 3.3. Purpose.
-------
The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities (including effecting the Exchange Offer), (b) use
the proceeds from the sale of the Securities to acquire the Debentures and
(c) except as otherwise limited herein, to engage in only those other
activities necessary, advisable or incidental thereto. The Trust shall not
borrow money, issue debt or reinvest proceeds derived from investments,
mortgage or pledge any of its assets, or otherwise undertake (or permit to be
undertaken) any activity that would cause the Trust not to be classified for
United States federal income tax purposes as a grantor trust.
SECTION 3.4. Authority.
---------
Subject to the limitations provided in this Trust 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 the Administrative Trustees in accordance with
their powers, as set forth in Section 5.5, shall constitute the act of and
serve to bind the Trust and an action taken by the Property Trustee on behalf
of the Trust in accordance with its powers shall constitute the act of and
serve to bind the Trust. In dealing with the Trustees acting on behalf of
the Trust, no Person shall be required to inquire into the authority of the
Trustees to bind the Trust. Persons dealing with the Trust are entitled to
rely conclusively on the power and authority of the Trustees as set forth in
this Trust 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 Trust
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 to cause the Trust to engage in the following activities:
(a) to issue and sell the Securities in accordance with this
Trust Agreement; provided, however, that (i) the Trust
14
may issue no more than two series of Capital 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:
(x) a simultaneous issuance of both Capital Securities and Common Securities at
the Closing Time and (y) the issuance of a second series of Capital Securities
upon the consummation of the Exchange Offer.
(b) in connection with the issue and sale of the Securities and
the consummation of the Exchange Offer, at the direction of the Sponsor, to:
(i) prepare and execute, if necessary, an offering memorandum
(the "Offering Memorandum") in preliminary and final form prepared by
the Sponsor, in relation to the offering and sale of Capital Securities
(x) to QIBS in reliance on Rule 144A under the Securities Act, (y) to
institutional "accredited investors" (as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act) and (z) outside the United
States to non-U.S. Persons in offshore transactions in reliance on
Regulation S under the Securities Act;
(ii) 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 Capital Securities in any State
in which the Sponsor has determined to qualify or register such Capital
Securities for sale;
(iii) execute and file an application, prepared by the Sponsor,
to the New York Stock Exchange or any other national stock exchange or
the Nasdaq Stock Market's National Market, or any similar organizations
for listing or quotation of the Capital Securities;
(iv) execute and deliver letters, documents, or instruments with
DTC and other Clearing Agencies relating to the Capital Securities;
(v) if required, execute and file with the Commission a
registration statement on Form 8-A, including any amendments thereto,
prepared by the Sponsor, relating to the registration of the Capital
Securities under Section 12(b) of the Exchange Act; and
(vi) execute and enter into the Purchase Agreement providing for
the sale of the Capital Securities, the Registration Rights Agreement,
a subscription agreement providing for the sale of the Common
Securities, a subscription agreement providing for the sale of the
Debentures and any other agreements and other instruments that may be
required to be delivered by the Trust in connection with the issuance
and sale of Securities;
15
(c) to acquire the Debentures with the proceeds of the sale of
the Capital Securities and the Common Securities and to exchange such
Debentures for a like principal amount of substantially similar Debentures,
pursuant to the Exchange Offer; 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
Capital Securities and the Holder of the Common Securities;
(d) to give the Sponsor and the Property Trustee prompt written
notice of the occurrence of a Special Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and with
respect to, for the purposes of (S) 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Capital Securities and Holders of Common
Securities as to such actions and applicable record dates;
(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 cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(j) to give the certificate required by (S) 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 appoint a Registrar and Exchange Agent 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
16
interest on the Debentures by extending the interest payment period under the
Indenture;
(n) to execute all documents or instruments, perform all duties
and powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for
the preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Capital
Securities or to enable the Trust to effect the purposes for which the Trust
was created;
(p) to take any action, not inconsistent with this Trust
Agreement or with applicable law, that the Administrative Trustees determine
in their discretion to be necessary or desirable in carrying out the
activities of the Trust as set out in this Section 3.6, including, but not
limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes; and
(q) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with
respect to the Trust to be duly prepared and filed by the Administrative
Trustees, on behalf of the Trust.
The Administrative Trustees must exercise the powers set forth in
this Section 3.6 in a manner that is consistent with the purposes and
functions of the Trust set out in Section 3.3, and the Administrative
Trustees shall not take any action that is inconsistent with the purposes and
functions of the Trust set forth in Section 3.3.
Subject to this Section 3.6, the Administrative Trustees shall
have none of the powers or the authority of the Property Trustee set forth in
Section 3.8.
Any expenses incurred by the Administrative Trustees pursuant to
this Section 3.6 shall be reimbursed by the Debenture Issuer.
17
SECTION 3.7. Prohibition of Actions by the Trust and the Trustees.
----------------------------------------------------
(a) The Trust shall not, and the Trustees (including the
Property Trustee) shall not, engage in any activity other than as required or
authorized by this Trust Agreement. 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 Trust 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;
(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; or
(vii) other than as provided in this Trust Agreement or Annex I,
(A) direct the time, method and place of conducting any proceeding with
respect to any remedy available to the Debenture Trustee, or exercising
any right or power conferred upon the Debenture Trustee with respect to
the Debentures, (B) waive any past default that is waivable under the
Indenture, (C) exercise any right to rescind or annul any declaration
that the principal of all the Debentures shall be due and payable, or
(D) consent to any amendment, modification or termination of the
Indenture or the Debentures where such consent shall be required unless
the Trust shall have received an opinion of a nationally recognized
independent tax counsel experienced in such matters to the effect that
such modification will not cause more than an insubstantial risk that
for United States federal income tax purposes the Trust will be
classified 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
Holders of the Securities. The right, title and interest of the Property
Trustee to the
18
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 to the
Holders of the Capital Securities and Holders of the Common Securities
from the Property Trustee Account in accordance with Section 6.1.
Funds in the Property Trustee Account shall be held uninvested until
disbursed in accordance with this Trust Agreement. The Property
Trustee Account shall be an account that is maintained with a banking
institution the rating on whose long-term unsecured indebtedness is at
least equal to the rating assigned to the Capital Securities by a
"nationally recognized statistical rating organization", as that term
is defined for purposes of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be necessary
or appropriate to effect the redemption of the Capital Securities and
the Common Securities to the extent the Debentures are redeemed or
mature; and
(iii) upon written notice issued by the Administrative Trustees
in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect
the distribution of the Debentures to Holders of Securities upon the
occurrence of certain events.
(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 the Securities.
(e) Subject to Section 3.9(a), the Property Trustee shall take
any Legal Action which arises out of or in connection with an Event of
Default of which a Responsible Officer of the Property Trustee has actual
knowledge or the Property Trustee's duties and obligations under this Trust
Agreement or the Trust Indenture Act so require, and if such Property Trustee
shall have
19
failed to take such Legal Action, the Holders of the Capital Securities may take
such Legal Action, to the same extent as if such Holders of Capital Securities
held an aggregate principal amount of Debentures equal to the aggregate
Liquidation Amount of such Capital Securities, 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 premium, if any, or interest on
the Debentures on the date such principal, premium, if any, or interest is
otherwise payable (or in the case of redemption, on the redemption date), then a
Holder of Capital Securities may directly institute a proceeding for enforcement
of payment to such Holder of the principal of or premium, if any, or interest on
the Debentures having a principal amount equal to the aggregate Liquidation
Amount of the Capital Securities of such Holder (a "Direct Action") on or after
the respective due date specified in the Debentures. In connection with such
Direct Action, the rights of the Holders of the Common Securities will be
subrogated to the rights of such Holders of Capital Securities to the extent of
any payment made by the Debenture Issuer to such Holders of Capital Securities
in such Direct Action. Except as provided in the preceding sentences, the
Holders of Capital Securities will not be able to exercise directly any other
remedy available to the holders of the Debentures.
(f) The Property Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the proceeds of
the liquidation distributed to the Holders of Securities pursuant to
the terms of the Securities; or
(ii) a Successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 5.7.
(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
such Securities.
(h) The Property Trustee shall be authorized to undertake any
actions set forth in (S) 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
20
behalf of the Trust with respect to all Securities and any such Paying Agent
shall comply with (S) 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.
(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.
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, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9. Certain Duties and Responsibilities of the Property Trustee.
-----------------------------------------------------------
(a) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Trust Agreement and in the Securities and no implied covenants shall be
read into this Trust 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 Trust Agreement, and use the same degree of care
and skill in their exercise, as a prudent Person would exercise or use under
the circumstances in the conduct of his or her own affairs.
(b) No provision of this Trust Agreement shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of 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
Trust 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 Trust Agreement
and in the Securities, and no implied
21
covenants or obligations shall be read into this Trust 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 Trust 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 Trust Agreement;
(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 not less than a
Majority in Liquidation Amount of the Securities relating to the time,
method and place of conducting any proceeding for any remedy available
to the Property Trustee, or exercising any right or power conferred
upon the Property Trustee under this Trust Agreement;
(iv) no provision of this Trust 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 Trust
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, safe keeping 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 Trust Agreement
and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability for or
with respect to the value, genuineness,
22
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. 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 Trust 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 reasonably
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 Trust Agreement may be sufficiently
evidenced by an Officers' Certificate;
(iii) whenever in the administration of this Trust 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 rerecording, refiling or registration thereof;
23
(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. The Property
Trustee shall have the right at any time to seek instructions
concerning the administration of this Trust 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 Trust
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 provided, that, nothing contained in this Section
-------- ----
3.10(a)(vi) shall be taken to relieve the Property Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Trust 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 rights 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
24
provisions of this Trust 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 Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Property Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the
Holders of the same proportion in Liquidation Amount of the Securities
as would be entitled to direct the Property Trustee under the terms of
the Securities in respect of such remedy, right or action, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in accordance with such instructions;
(xi) except as otherwise expressly provided by this Trust
Agreement, the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Trust Agreement; and
(xii) the Property Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith, without
negligence, and reasonably believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Trust
Agreement.
(b) No provision of this Trust 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.
SECTION 3.11. Delaware Trustee.
----------------
Notwithstanding any other provision of this Trust 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 Trust Agreement. 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 (S) 3807 of the Business Trust Act.
25
SECTION 3.12. Execution of Documents.
----------------------
Unless otherwise determined by the Administrative Trustees, and
except as otherwise required by the Business Trust Act or applicable law, any
Administrative Trustee is authorized to execute on behalf of the Trust any
documents that the Administrative Trustees have the power and authority to
execute pursuant to Section 3.6.
SECTION 3.13. Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained in this Trust 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 Trust 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 up to March 7, 2038.
SECTION 3.15. Mergers.
-------
(a) The Trust may not merge or convert with or into,
consolidate, amalgamate, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any Person, except as
described in Section 3.15(b) and (c).
(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 or convert with or into, consolidate, amalgamate, or be replaced by, or
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to, a trust organized as such under the laws of
any State; provided that:
-------- ----
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities: or
(B) substitutes for the Securities other securities having
substantially the same terms as the Securities (the "Successor
Securities") so long as the Successor Securities rank the same as
the Securities rank with respect to Distributions and payments
upon liquidation, redemption and otherwise;
26
(ii) the Sponsor expressly appoints a trustee of the Successor
Entity that possesses the same powers and duties as the Property
Trustee as the Holder of the Debentures;
(iii) the Successor Securities are listed, or any Successor
Securities will be listed upon notification of issuance, on any
national securities exchange or with another organization on which the
Capital Securities are then listed or quoted, if any;
(iv) such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the Capital
Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization;
(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 any Successor Securities) in any material respect (other
than any dilution of such Holders' interests in the new entity);
(vi) such 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 counsel 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 any Successor Securities) in any
material respect (other than with respect to any dilution of the
Holders' interest in the new entity); and
(B) following such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, neither
the Trust nor the Successor Entity 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 such Successor Entity and guarantees
the obligations of such Successor Entity under the Successor Securities
at least to the extent provided by the Capital Securities Guarantee and
the Common Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except
with the consent of Holders of 100% in liquidation
27
amount of the Securities, consolidate, amalgamate, merge or convert with or
into, or be replaced by, or convey, transfer or lease its properties and assets
as an entirety or substantially as an entirety to, any other entity or permit
any other entity to consolidate, amalgamate, merge with or into, or replace it
if such consolidation, amalgamation, merger, conversion, replacement,
conveyance, transfer or lease would cause the Trust or the Successor Entity not
to be classified as a grantor trust for United States federal income tax
purposes.
ARTICLE IV.
SPONSOR
SECTION 4.1. Sponsor's Purchase of Common Securities.
---------------------------------------
At the Closing Time, the Sponsor will purchase all of the Common
Securities then issued by the Trust, in an amount at least equal to
approximately 3% of the capital of the Trust, at the same time as the Capital
Securities are issued and sold.
SECTION 4.2. Responsibilities of the Sponsor.
-------------------------------
In connection with the issue and sale of the Capital Securities
and the Common Securities, the Sponsor shall have the exclusive right and
responsibility to engage in the following activities:
(a) to prepare the Offering Memorandum and any supplements
thereto and to prepare for filing by the Trust with the Commission any
Registration Statement, including any amendments or supplements thereto, as
contemplated by the Registration Rights Agreement;
(b) to determine the States in which to take appropriate action
to qualify or register for sale all or part of the Capital Securities and to
do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust, as
the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States;
(c) if deemed necessary or advisable by the Sponsor, to prepare
for filing by the Trust an application to The New York Stock Exchange, Inc.
or any other national stock exchange or the Nasdaq National Market, or any
similar organization, for listing or quotation of the Capital Securities;
(d) if required, to prepare for filing by the Trust with the
Commission a registration statement on Form 8-A relating to the registration
of the Capital Securities under Section 12(b) of the Exchange Act, including
any amendments or supplements thereto; and
28
(e) to negotiate the terms of the Purchase Agreement providing
for the sale of the Capital Securities.
SECTION 4.3. Right to Proceed.
----------------
The Sponsor acknowledges the rights of the Holders of Capital
Securities, in the event that a failure of the Trust to pay Distributions on
the Capital Securities is attributable to the failure of the Debenture Issuer
to pay interest or principal on the Debentures, to institute a proceeding
directly against the Debenture Issuer for enforcement of its payment
obligations on the Debentures.
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, in the case of a natural Person, shall be a Person who is a
resident of the State of Delaware or that, if not a natural Person, is an
entity which has its principal place of business in the State of Delaware
(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 Trust Agreement is required to qualify as an indenture under the Trust
Indenture Act, and such Trustee may also serve as Delaware Trustee if it
meets the applicable requirements. Notwithstanding the above, unless an
Event of Default shall have occurred and be continuing, at any time or times,
for the purpose of meeting the legal requirements of the Trust Indenture Act
or of any jurisdiction in which any part of the Trust's property may at the
time be located, the Holders of a Majority in Liquidation Amount of the
Common Securities acting as a class at a meeting of the Holders of the Common
Securities, and the Administrative Trustees, shall have power to appoint one
or more Persons either to act as a co-trustee, jointly with the Property
Trustee, of all or any part of the Trust's property, or to act as separate
trustee of any such property, in either case with such powers as may be
provided in the instrument of appointment, and to vest in such Person or
Persons in such capacity any property, title,
29
right or power deemed necessary or desirable, subject to the provisions of this
Trust 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.
----------------
If required by the Business Trust Act, one Trustee (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 that, if the Property Trustee has
its principal place of business in the State of Delaware and otherwise meets
the requirements of applicable law, then the Property Trustee shall also be
the Delaware Trustee and Section 3.11 shall have no application.
SECTION 5.3. Property Trustee; Eligibility.
-----------------------------
(a) There shall at all times be one Trustee (the "Property
Trustee") which shall act as Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted by
the Commission to act as an institutional 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 million
U.S. dollars ($50,000,000), and subject to supervision or examination
by Federal, State, Territorial or District of Columbia authority. If
such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the supervising or examining
authority referred to above, then for the purposes of this Section
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 (S) 310(b) of the
30
Trust Indenture Act, the Property Trustee and the Holder of the Common
Securities (as if it were the obligor referred to in (S) 310(b) of the Trust
Indenture Act) shall in all respects comply with the provisions of (S) 310(b) of
the Trust Indenture Act.
(d) The Capital Securities Guarantee shall be deemed to be
specifically described in this Trust Agreement for purposes of clause (i) of
the first provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
The Bank of New York, as trustee
101 Barclay Street, 21-W
New York, NY 10286
Attention: Corporate Trust Administration
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.
-----------------------
(a) The initial Administrative Trustees shall be:
Keith S. Hynes
John D. Nichols, Jr.
Martin Merritt
(b) Except as expressly set forth in this Trust 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.
(c) Unless otherwise determined by the Administrative Trustees,
and except as otherwise required by the Business Trust Act or applicable law,
any Administrative Trustee is authorized to execute on behalf of the Trust
any documents which the Administrative Trustees have the power and authority
to cause the Trust to execute pursuant to Section 3.6.
(d) An 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 purposes of signing any documents which
the Administrative Trustees have power and authority to cause the Trust to
execute pursuant to Section 3.6.
31
SECTION 5.6. Delaware Trustee.
----------------
The initial Delaware Trustee shall be:
The Bank of New York (Delaware), as trustee
White Clay Center, Route 373
Newark, Delaware 19711
Attention: Corporate Trust Administration
SECTION 5.7. Appointment, Removal and Resignation of Trustees.
------------------------------------------------
(a) Subject to Section 5.7(b) of this Trust Agreement and to
Section 6(b) of Annex I hereto, any Trustee may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor;
(ii) in the case of Administrative Trustees, 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) in the case of the Property Trustee and the Delaware
Trustee, unless an Event of Default shall have occurred and be
continuing after the issuance of any Securities, by vote of the Holders
of a Majority in Liquidation Amount of the Common Securities voting as
a class at a meeting of the Holders of the Common Securities; and
(iv) in the case of the Property Trustee and the Delaware
Trustee, 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 Capital Securities voting as a class at a
meeting of the Holders of the Capital 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 possessing the qualifications to act as Property Trustee under
Section 5.3 (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 this Section 5.7(a) until a successor
Delaware 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
32
such Successor Delaware Trustee and delivered to the Administrative
Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been duly 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 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 or removal of the Trustee that acts as
the Property Trustee shall be effective:
(A) until a Successor Property Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Property Trustee and delivered to the Trust, the
Sponsor and the resigning Property Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Securities; and
(ii) no such resignation or removal of the Trustee that acts as
the Delaware Trustee shall be effective until a Successor Delaware
Trustee has been appointed and has accepted such appointment by
instrument executed by such Successor Delaware Trustee and delivered to
the Trust, the Sponsor and the resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor
Property Trustee, as the case may be, if the Property Trustee or the Delaware
Trustee delivers an instrument of resignation in accordance with this Section
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 30 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 appropriate, 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.
33
SECTION 5.8. Vacancies among Trustees.
------------------------
If a Trustee ceases to hold office for any reason and the number
of Trustees is not reduced pursuant to Section 5.1, or if the number of
Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the Administrative
Trustees or, if there are more than two, a majority of the Administrative
Trustees, shall be conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance with Section
5.7.
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 annul the Trust. 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
Trust 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 as needed 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 Trust 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
34
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, or making any other governmental
filing; and
(b) The Administrative Trustees shall have power to delegate
from time to time to such of their number 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 otherwise as the
Administrative Trustees may deem expedient, to the extent such delegation is
not prohibited by applicable law or contrary to the provisions of the Trust,
as set forth herein.
SECTION 5.12. Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
Any corporation into which any Trustee (excluding any
Administrative Trustee that is a natural Person) may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which such Trustee shall be a party,
or any corporation succeeding to all or substantially all the corporate trust
business of such Trustee, shall be the successor of such Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further act
on the part of any of the parties hereto.
ARTICLE VI.
DISTRIBUTIONS
SECTION 6.1. Distributions.
-------------
Each Holder shall receive Distributions in accordance with the
applicable terms of such Holder's Securities. If and to the extent that the
Debenture Issuer makes a payment of interest, principal or Redemption Price
(as defined in the Indenture) on the Debentures held by the Property Trustee
or any other payments pursuant to the Registration Rights Agreement with
respect to the Debentures held by the Property Trustee (the amount of any
such payment being a "Payment Amount"), the Property Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
Distribution of the Payment Amount to Holders of the Securities in accordance
with the respective terms of the Securities held by them.
35
ARTICLE VII.
ISSUANCE OF SECURITIES
SECTION 7.1. General Provisions Regarding Securities.
---------------------------------------
(a) The Administrative Trustees shall on behalf of the Trust
issue one class of capital securities representing undivided beneficial
interests in the assets of the Trust having such terms as are set forth in
Annex I (the "Series A Capital Securities") and one class of common
securities representing undivided beneficial interests in the assets of the
Trust having such terms as are set forth in Annex I (the "Common
Securities"). The Administrative Trustees shall on behalf of the Trust issue
one class of capital securities representing undivided beneficial interests
in the Trust having such terms as set forth in Annex I (the "Series B Capital
Securities") in exchange for Series A Capital Securities accepted for
exchange in the Exchange Offer, which Series B Capital Securities shall not
bear the legends required by Section 9.2(i) unless the Holder of such Series
A Capital Securities is either (A) a broker-dealer who purchased such Series
A Capital Securities directly from the Trust for resale pursuant to Rule 144A
or any other available exemption under the Securities Act, (B) a Person
participating in the distribution of the Series A Capital Securities or (C) a
Person who is an "affiliate" (as defined in Rule 144A) of the Trust. The
Trust shall issue no securities or other interests in the assets of the Trust
other than the Capital Securities and the Common Securities.
(b) The consideration received by the Trust for the issuance of
the Securities shall constitute a contribution to the capital of the Trust
and shall not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this Trust
Agreement, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable undivided beneficial interests in the assets of
the Trust.
(d) Every Person, by virtue of having become a Holder or a
Beneficial Owner in accordance with the terms of this Trust Agreement, shall
be deemed to have expressly assented and agreed to the terms of, and shall be
bound by, this Trust 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 ceases 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
36
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 the Trust Agreement any such Person was not such an Administrative
Trustee.
(b) One Administrative Trustee shall sign the Capital Securities
for the Trust by manual or facsimile signature. Unless otherwise determined
by the Trust, such signature shall, in the case of Common Securities, be a
manual signature.
A Capital 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 Capital Security has been
authenticated under this Trust Agreement.
Upon a written order of the Trust signed by one Administrative
Trustee, the Property Trustee shall authenticate the Capital Securities for
original issue. The aggregate number of Capital Securities outstanding at
any time shall not exceed the number set forth in Annex I hereto except as
provided in Section 7.6.
The Property Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Capital Securities. An
authenticating agent may authenticate Capital Securities whenever the
Property Trustee may do so. Each reference in this Trust Agreement to
authentication by the Property Trustee includes authentication by such
agent. An authenticating agent has the same rights as the Property Trustee
to deal with the Sponsor or an Affiliate.
SECTION 7.3. Form and Dating.
---------------
The Capital 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 Trust
Agreement. Certificates representing the Securities may be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrative Trustees, as evidenced by their
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 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). The Trust at the
direction of the Sponsor shall furnish any such legend not contained in
Exhibit A-1 to the Property Trustee in writing. Each Capital 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 Trust
37
Agreement and to the extent applicable, the Property Trustee, Administrative
Trustees and the Sponsor, by their execution and delivery of this Trust
Agreement, expressly agree to be bound thereby.
(a) Global Capital Securities. Securities offered and sold to
-------------------------
QIBs in reliance on Rule 144A or offered and sold outside the United States
to non-U.S. Persons in offshore transactions in reliance on Regulation S, as
provided in the Purchase Agreement, shall be issued in the form of one or
more Global Capital Securities in definitive, fully registered form without
Distribution coupons with the appropriate global legends and Restricted
Securities Legend set forth in Exhibit A-1 hereto (respectively, a "Rule 144A
Global Capital Security" or "Regulation S Global Capital Security," as
appropriate), and in the case of a Regulation S Temporary Global Capital
Security, the legend set forth in Section 7.3(d) hereof. Global Capital
Securities shall be deposited on behalf of the purchasers of the Capital
Securities represented thereby with the Property Trustee, at its New York
office, as custodian for the Clearing Agency, and registered in the name of
the Clearing Agency or a nominee of the Clearing Agency, duly executed by the
Trust and authenticated by the Property Trustee as hereinafter provided. The
number of Capital Securities represented by the Rule 144A Global Capital
Security and the Regulation S Global Capital Security may from time to time
be increased or decreased by adjustments made on the records of the Property
Trustee and the Clearing Agency or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 7.3(b) shall apply only
---------------------
to the Rule 144A Global Capital Securities, the Regulation S Global Capital
Securities and such other Capital Securities in global form as may be
authorized by the Trust to be deposited with the Clearing Agency or its
custodian.
The Trust shall execute and the Property Trustee shall, in
accordance with this Section 7.3, authenticate and make available for
delivery initially one or more Rule 144A Global Capital Securities and one or
more Regulation S Global Capital Securities that (i) shall be registered in
the name of Cede & Co. or other designated nominee of the Clearing Agency and
(ii) shall be delivered by the Property Trustee to the Clearing Agency or its
custodian for the Clearing Agency.
Members of, or participants in, the Clearing Agency ("Participants")
shall have no rights under this Trust Agreement with respect to any Rule 144A
Global Capital Security or any Regulation S Global Capital Security held on
their behalf by the Clearing Agency or by the Property Trustee as the custodian
of the Clearing Agency or under such Rule 144A Global Capital Security or such
38
Regulation S Global Capital 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 Rule 144A Global Capital Security or such
Regulation S Global Capital 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
Rule 144A Global Capital Security or any Regulation S Global Capital Security.
(c) Definitive Capital Securities. Except as provided in
-----------------------------
Section 7.9, a Beneficial Owner of a Rule 144A Global Capital Security or a
Regulation S Global Capital Security will not be entitled to receive physical
delivery of certificated Capital Securities ("Definitive Capital
Securities"). Purchasers of Securities who are "accredited investors" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and did
not purchase Capital Securities in reliance on Regulation S will receive
Capital Securities in the form of individual certificates in definitive,
fully registered form without distribution coupons and with the Restricted
Securities Legend set forth in Exhibit A-1 hereto ("Restricted Definitive
Capital Securities"); provided, however, that upon transfer of such
Restricted Definitive Capital Securities to a QIB, such Restricted Definitive
Capital Securities will be exchanged for an interest in a Rule 144A Global
Capital Security pursuant to the provisions of Section 9.2, unless the Rule
144A Global Capital Security has previously been exchanged pursuant to the
Exchange Offer, in which case the Restricted Definitive Capital Securities
will be exchanged for an interest in an Unrestricted Global Capital
Security. Restricted Definitive Capital Securities will bear the Restricted
Securities Legend set forth on Exhibit A-1 unless removed in accordance with
this Section 7.3 or Section 9.2.
(d) Regulation S Global Capital Securities; Regulation S
----------------------------------------------------
Certificates.
- ------------
Capital Securities issued to Holders in reliance on Regulation S
will be initally issued in the form of a single temporary global security
(the "Regulation S Temporary Global Capital Security"). Each Global Capital
Security that constitutes a Regulation S Temporary Global Capital Security
shall bear the following legend:
"THIS GLOBAL CAPITAL SECURITY IS A TEMPORARY GLOBAL NOTE FOR PURPOSES
OF REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "1933 ACT"). NEITHER THIS TEMPORARY GLOBAL CAPITAL
SECURITY NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD OR DELIVERED,
EXCEPT AS PERMITTED UNDER THE TRUST AGREEMENT REFERRED TO BELOW.
NO BENEFICIAL OWNERS OF THIS TEMPORARY GLOBAL CAPITAL SECURITY SHALL BE
ENTITLED TO RECEIVE PAYMENT OF
39
DISTRIBUTIONS HEREON UNLESS THE REQUIRED CERTIFICATIONS HAVE BEEN
DELIVERED PURSUANT TO THE TERMS OF THE TRUST AGREEMENT."
Beneficial interests in a Regulation S Temporary Global Capital
Security will be exchangeable for beneficial interests in a single permanent
global security (the "Regulation S Permanent Global Capital Security",
together with the Regulation S Temporary Global Capital Security, the
"Regulation S Global Capital Security") on or after the expiration of the
Restricted Period (the "Release Date") and only in accordance with the
following provisions:
(i) On or prior to the Release Date, each Beneficial Owner of a
Regulation S Temporary Capital Global Security shall deliver to Euroclear or
Cedel (as applicable) a certificate certifying that the Beneficial Owner of
the Regulation S Temporary Global Capital Security is a non-United States
Person within the meaning of Regulation S (a "Regulation S Certificate"),
substantially in the form of Exhibit B-2 attached hereto; provided, however,
-----------
that any Beneficial Owner of a Regulation S Temporary Global Capital Security
on the Release Date or any payment date that has previously delivered a
Regulation S Certificate hereunder shall not be required to deliver any
subsequent Regulation S Certificate (unless the certificate previously
delivered is no longer true as of such subsequent date, in which case such
beneficial owner shall promptly notify Euroclear or Cedel, as applicable,
thereof and shall deliver an updated Regulation S Certificate). Euroclear or
Cedel, as applicable, shall deliver to the Paying Agent a certificate,
substantially in the form of Exhibit B-1 attached hereto (a "Non-U.S.
-----------
Certificate") promptly upon the receipt of each such Regulation S
Certificate, and no such Beneficial Owner (or transferee from such Beneficial
Owner) shall be entitled to receive an interest in a Regulation S Permanent
Global Capital Security or any payment of any Distributions or any other
payment with respect to its interest in a Regulation S Temporary Global
Capital Security prior to the Paying Agent receiving such Non-U.S.
Certificate from Euroclear or Cedel with respect to the portion of the
Regulation S Temporary Global Capital Security owned by such Beneficial Owner
(and, with respect to an interest in the Regulation S Permanent Global
Capital Security, prior to the Release Date).
(ii) Any payments of Distributions or any other payment on a
Regulation S Temporary Global Capital Security received by Euroclear or Cedel
with respect to any portion of such Regulation S Global Capital Security
owned by a Beneficial Owner that has not delivered the Regulation S
Certificate required by Section 7.3(d)(i) hereof shall be held by Euroclear
and Cedel solely as agents for the Paying Agent. Euroclear and Cedel shall
remit such payments to the applicable Beneficial Owner (or to a Euroclear or
Cedel member on behalf of such Beneficial Owner) only after Euroclear or
Cedel has received the
40
requisite Regulation S Certificate. Until the Paying Agent has received a
certification from Euroclear or Cedel, as applicable, that it has received the
requisite Regulation S Certificate with respect to the Book-Entry Interest in
any portion of a Regulation S Temporary Global Capital Security, the Paying
Agent may revoke the right of Euroclear or Cedel, as applicable, to hold any
payments made with respect to such portion of such Regulation S Global Capital
Security. If the Paying Agent exercises its right of revocation pursuant to the
immediately preceding sentence, Euroclear or Cedel, as applicable, shall return
such payments to the Paying Agent and the Paying Agent shall hold such payments
until Euroclear or Cedel, as applicable, has provided necessary Non-U.S.
Certificates to the Paying Agent (at which time the Paying Agent shall forward
such payments to Euroclear or Cedel, as applicable, to be remitted to the
Beneficial Owner that is entitled thereto on the records of Euroclear or Cedel
(or on the records of their respective members)).
(iii) Each Beneficial Owner of a Regulation S Temporary Global
Capital Security shall exchange its interest therein for an interest in a
Regulation S Permanent Global Capital Security on or after the Release Date
upon furnishing to Euroclear or Cedel (as applicable) the Regulation S
Certificate and upon receipt by the Paying Agent of the Non-U.S. Certificate
thereof from Euroclear or Cedel, as applicable, in each case pursuant to the
terms of Section 7.3(d)(i) hereof. On and after the Release Date, upon
receipt by the Paying Agent of any Non-U.S. Certificate from Euroclear or
Cedel described in the immediately preceding sentence, (A) with respect to
the first such Non-U.S. Certificate, the Trust shall execute and the Property
Trustee shall authenticate, upon receipt of an order from the Trust for the
authentication, and deliver to the Clearing Agency the applicable Regulation
S Permanent Global Capital Security and (B) with respect to the first and all
subsequent Non-U.S. Certificates, the Clearing Agency shall exchange on
behalf of the applicable Beneficial Owners the portion of the applicable
Regulation S Temporary Global Capital Security covered by such Non-U.S.
Certificates for a comparable portion of the applicable Regulation S
Permanent Global Capital Security. Upon any exchange of a portion of a
Regulation S Temporary Global Capital Security for a comparable portion of a
Regulation S Permanent Global Capital Security, the Clearing Agency shall
endorse on the schedules affixed to each of such Regulation S Global Capital
Security (or on continuations of such schedules affixed to each of such
Regulation S Global Security and made parts thereof) appropriate notations
evidencing the date of transfer and (x) with respect to the applicable
Regulation S Temporary Global Capital Security, a decrease in the Liquidation
Amount thereof equal to the amount covered by the applicable certification
and (y) with respect to the applicable Regulation S Permanent Global Capital
Security, an increase in the Liquidation Amount thereof equal to the
Liquidation Amount of the decrease in the applicable Regulation S Temporary
Global Capital Security pursuant to clause (x) above.
41
(e) The Series A Capital Securities are issuable only in
denominations of $100,000 and any integral multiple of $1,000 in excess
thereof.
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 Capital Securities may be presented
for registration of transfer ("Registrar"), (ii) an office or agency where
Capital Securities may be presented for payment ("Paying Agent") and (iii) an
office or agency where Securities may be presented for exchange ("Exchange
Agent"). The Registrar shall keep a register of the Capital Securities and
of their transfer. The Trust shall appoint the Registrar, the Paying Agent
and the Exchange Agent and may appoint one or more co-Registrars and one or
more additional Paying Agents in such other locations within the United
States as it shall determine. The term "Registrar" includes any additional
registrar, the term "Paying Agent" includes any additional paying agent and
the term "Exchange Agent" includes any additional Exchange Agent. The Trust
may change any Paying Agent, Registrar or co-Registrar or Exchange Agent
without prior notice to any Holder. The Paying Agent shall be permitted to
resign as Paying Agent upon 30 days' written notice to the Property Trustee
and the Trust. The Trust shall notify the Property Trustee of the name and
address of any Agent not a party to this Trust Agreement. If the Trust fails
to appoint or maintain another entity as Registrar, Paying Agent or Exchange
Agent, the Property Trustee shall act as such. The Trust or any of its
Affiliates may act as Paying Agent, Registrar or Exchange Agent. The Trust
shall act as Paying Agent, Registrar, co-Registrar and Exchange Agent for the
Common Securities.
The Trust initially appoints the Property Trustee as Registrar,
Paying Agent and Exchange Agent for the Capital Securities.
SECTION 7.5. Paying Agent to Hold Money in Trust.
-----------------------------------
The Trust shall require each Paying Agent other than the Property
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Property Trustee all money held by the Paying Agent
for the payment of Liquidation Amounts or Distributions on the Securities,
and will notify the Property Trustee if there are insufficient funds for such
purpose. While any such insufficiency continues, the Property Trustee may
require a Paying Agent to pay all money held by it to the Property Trustee.
The Trust at any time may require a Paying Agent to pay all money held by it
to the Property Trustee and to account for any money disbursed by it. Upon
payment over to the Property Trustee, the Paying Agent (if other than the
Trust or an Affiliate of the Trust) shall have no further liability for the
money. If the Trust or the Sponsor or
42
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 the 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 Capital Securities to
the Property Trustee, the Trust shall issue and the Property Trustee shall
authenticate 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 Capital Securities.
------------------------------
The Capital Securities outstanding at any time are all the
Capital 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 Capital 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
Capital Security is held by a bona fide purchaser.
If Capital Securities are considered paid in full, including any
and all distributions and liquidation preferences, in accordance with the
terms of this Trust Agreement, they cease to be outstanding and Distributions
on them shall cease to accumulate.
A Capital Security does not cease to be outstanding because one
of the Trustees, the Sponsor or an Affiliate of the Sponsor holds the
Security.
SECTION 7.8. Capital Securities in Treasury.
------------------------------
In determining whether the Holders of the required amount of
Securities have concurred in any direction, waiver or consent, Capital
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
43
fully protected in relying on any such direction, waiver or consent, only
Securities which 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 Trust may
prepare and, in the case of the Capital 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 Trust shall prepare and, in the case of the Capital
Securities, the Property Trustee shall authenticate Definitive Securities in
exchange for temporary Securities.
SECTION 7.10. Cancellation.
------------
The Trust at any time may deliver Capital Securities to the
Property Trustee for cancellation. The Registrar and Paying Agent shall
forward to the Property Trustee any Capital Securities surrendered to them
for registration of transfer, redemption, exchange or payment. The Property
Trustee shall promptly cancel all Capital Securities surrendered for
registration of transfer, redemption, exchange, payment, replacement or
cancellation and shall dispose of canceled Capital Securities as the Trust
directs, provided that the Property Trustee shall not be obligated to destroy
Capital Securities. The Trust may not issue new Capital Securities to
replace Capital Securities that it has paid 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 the Capital Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Property Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders of
Capital Securities; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as
printed on the Capital Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Capital Securities, and any such redemption shall not
be affected by any defect in or omission of such numbers. The Sponsor will
promptly notify the Property Trustee of any change in the CUSIP numbers.
44
ARTICLE VIII.
DISSOLUTION OF TRUST
SECTION 8.1. Dissolution of Trust.
--------------------
(a) The Trust shall automatically dissolve:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or
liquidation or its equivalent with respect to the Sponsor, or the
revocation of the Sponsor's charter and the expiration of 90 days after
the date of revocation without a reinstatement thereof;
(iii) following the distribution of a Like Amount of the
Debentures to the Holders of the Securities pursuant to the terms
thereof upon receipt of the following: (A) a written direction from
the Sponsor (which direction is optional and, except as otherwise
expressly provided below, within the discretion of the Sponsor) while
the Debentures are outstanding requiring the Administrative Trustees to
dissolve the Trust and distribute a Like Amount of the Debentures to
Holders of the Securities; and (B) an opinion of counsel addressed to
the Trust, which opinion may rely on published rulings of the Internal
Revenue Service, 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) upon the entry of a decree of judicial dissolution of the
Trust by a court of competent jurisdiction;
(v) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the Securities;
(vi) upon the repayment of the Debentures or at such time as no
Debentures are outstanding;
(vii) the expiration of the term of the Trust provided in
Section 3.14; or
(viii) following the distribution of a Like Amount of the
Debentures to the Holders of the Securities pursuant to the terms
thereof upon receipt of a written notice from the Sponsor that it
intends to effect a Special Event Redemption and directing the
Administrative Trustees to dissolve the Trust and distribute a Like
Amount of the Debentures to the Holders of the Securities.
45
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Trust shall be wound up pursuant to
Section 3808 of the Business Trust Act and the Administrative Trustees shall
file a certificate of cancellation with the Secretary of State of the State
of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive
the dissolution 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 Trust Agreement
and in the terms of the Securities. Any transfer or purported transfer of
any Security not made in accordance with this Trust Agreement shall be
entirely null and void.
(b) Subject to this Article IX, Capital Securities may only be
transferred, in whole or in part, in accordance with the terms and conditions
set forth in this Trust Agreement. Any transfer or purported transfer of any
security not made in accordance with this Trust Agreement shall be entirely
null and void.
(c) Subject to Section 3.15, the Common Securities may not be
transferred except to the Sponsor or an Affiliate of the Sponsor, or any of
their permitted successors.
(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 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 Trust Agreement.
46
SECTION 9.2. Transfer Procedures and Restrictions.
------------------------------------
(a) General. Except as otherwise provided in Section 9.2(b), if
-------
Capital Securities are issued upon the transfer, exchange or replacement of
Capital Securities bearing the Restricted Securities Legend set forth in
Exhibit A-1 hereto, or if a request is made to remove such Restricted
Securities Legend on Capital Securities, the Capital Securities so issued
shall bear the Restricted Securities Legend, or the Restricted Securities
Legend shall not be removed, as the case may be, unless there is delivered to
the Trust and the Property Trustee such satisfactory evidence, which shall
include an Opinion of Counsel licensed to practice law in the State of New
York, as may be reasonably required by the Sponsor and the Property Trustee,
that neither the legend nor the restrictions on transfer set forth therein
are required to ensure that transfers thereof are made pursuant to an
effective registration statement filed with the Commission under the
Securities Act or pursuant to an exception from the registration requirements
of the Securities Act or, with respect to Restricted Securities, that such
Securities are not "restricted" within the meaning of Rule 144. Upon
provision of such satisfactory evidence, the Property Trustee, at the written
direction of the Trust, shall authenticate and deliver Capital Securities
that do not bear the legend.
(b) Transfers After Effectiveness of a Registration Statement.
---------------------------------------------------------
After the effectiveness of a Registration Statement with respect to any
Capital Securities, all requirements pertaining to Securities Act legends on
such Capital Securities will cease to apply, and beneficial interests in a
Capital Security in global form without legends will be available to
transferees of such Capital Securities, upon exchange of the transferring
holder's Restricted Definitive Capital Security or directions to transfer
such Holder's beneficial interest in the Global Capital Security. No such
transfer or exchange of a Restricted Definitive Capital Security or of an
interest in the Global Capital Security shall be effective unless the
transferor delivers to the Trust a certificate in a form substantially
similar to that attached hereto as the "Form of Assignment" in Exhibit A-1.
Except as otherwise provided in Section 9.2(m), after the effectiveness of a
Registration Statement, the Trust shall issue and the Property Trustee, upon
a written order of the Trust signed by one Administrative Trustee, shall
authenticate a Global Capital Security without the Restricted Securities
Legend (the "Unrestricted Global Capital Security") to deposit with the
Clearing Agency to evidence transfers of beneficial interests from the (i)
Global Capital Security and (ii) Restricted Definitive Capital Securities.
(c) Transfer and Exchange of Definitive Capital Securities.
------------------------------------------------------
When Definitive Capital Securities are presented to the Registrar or
co-Registrar
47
(x) to register the transfer of such Definitive Capital
securities or
(y) to exchange such Definitive Capital Securities which
became mutilated, destroyed, defaced, stolen or lost, for an equal
number of Definitive Capital Securities,
the Registrar or co-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 Capital Securities surrendered
for transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Trust and
the Registrar or co-Registrar, duly executed by the Holder thereof or
his attorney duly authorized in writing; and
(ii) in the case of Definitive Capital Securities that are
Restricted Definitive Capital Securities:
(A) if such Restricted Capital Securities are being
delivered to the Registrar by a Holder for registration in the
name of such Holder, without transfer, a certification from such
Holder to that effect; or
(B) if such Restricted Capital Securities are being
transferred: (i) a certification from the transferor in a form
substantially similar to that attached hereto as the "Form of
Assignment" in Exhibit A-1, and (ii) if the Trust or Registrar so
requests, evidence reasonably satisfactory to them as to the
compliance with the restrictions set forth in the Restricted
Securities Legend.
(d) Restrictions on Transfer of a Definitive Capital Security
---------------------------------------------------------
for a Beneficial Interest in a Global Capital Security. A Definitive Capital
- ------------------------------------------------------
Security may not be exchanged for a beneficial interest in a Global Capital
Security except upon satisfaction of the requirements set forth below. Upon
receipt by the Property Trustee of a Definitive Capital Security, duly
endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Property Trustee, together with:
(i) if such Definitive Capital Security is a Restricted Capital
Security, a written certificate (in a form substantially similar to
that attached hereto as the "Form of Assignment" in Exhibit A-1); and
(ii) whether or not such Definitive Capital Security is a
Restricted Capital Security, written instructions directing the
Property Trustee to make, or to direct the
48
Clearing Agency to make, an adjustment on its books and records with
respect to the appropriate Global Capital Security to reflect an increase
in the number of the Capital Securities represented by such Global Capital
Security,
then the Property Trustee shall cancel such Definitive Capital Security and
cause, or direct the Clearing Agency to cause, the aggregate number of
Capital Securities represented by the appropriate Global Capital Security to
be increased accordingly. If no Global Capital Securities are then
outstanding, the Trust shall issue and the Property Trustee shall
authenticate, upon written order of any Administrative Trustee, an
appropriate number of Global Capital Securities.
(e) Transfer and Exchange of Global Capital Securities. Subject
--------------------------------------------------
to Section 9.02(f), the transfer and exchange of Global Capital Securities or
beneficial interests therein shall be effected through the Clearing Agency,
in accordance with this Trust Agreement (including applicable restrictions on
transfer set forth herein, if any) and the procedures of the Clearing Agency
therefor.
(f) Transfer of a Beneficial Interest in a Global Capital
-----------------------------------------------------
Security for a Definitive Capital Security.
- ------------------------------------------
(i) Subject to the provisions of Section 7.3(d), any Person
having a beneficial interest in a Global Capital Security may upon
request, but only upon 20adays prior notice to the Property Trustee,
and if accompanied by the information specified below, upon transfer of
such beneficial interest to a person who is an "accredited investor"
(as defined in Rule 501(a)(1)(2)(3) or (7) under Regulation D under the
Securities Act, exchange such beneficial interest for a Definitive
Capital Security representing the same number of Capital Securities.
Upon receipt by the Property Trustee from the Clearing Agency or its
nominee on behalf of any Person having a beneficial interest in a
Global Capital Security of written instructions or such other form of
instructions as is customary for the Clearing Agency or the Person
designated by the Clearing Agency as having such a beneficial interest
in a Restricted Capital Security and a certification from the
transferor (in a form substantially similar to that attached hereto as
the "Form of Assignment" in Exhibit A-1), which may be submitted by
facsimile, then the Property Trustee will cause the aggregate number of
Capital Securities represented by Global Capital Securities to be
reduced on its books and records and, following such reduction, the
Trust will execute and the Property Trustee will authenticate and make
available for delivery to the transferee a Definitive Capital Security.
(ii) Definitive Capital Securities issued in exchange for a
beneficial interest in a Global Capital Security
49
pursuant to this Section 9.2(f) shall be registered in such names and in
such authorized denominations as the Clearing Agency, pursuant to
instructions from its Participants or indirect participants or otherwise,
shall instruct the Property Trustee in writing. The Property Trustee shall
deliver such Capital Securities to the Persons in whose names such Capital
Securities are so registered in accordance with such instructions of the
Clearing Agency.
(g) Restrictions on Transfer and Exchange of Global Capital
-------------------------------------------------------
Securities. Notwithstanding any other provisions of this Trust Agreement
- ----------
(other than the provisions set forth in subsection (g) of this Section 9.2),
a Global Capital 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.
Until the later of the Release Date and the provision of the
certifications required by Section 7.3(d), beneficial interests in any
Regulation S Temporary Global Security may be held only through members
acting for and on behalf of Euroclear and Cedel.
Beneficial interests in the Rule 144A Global Capital Security may
be transferred to a Person who takes delivery in the form of an interest in
the Regulation S Permanent Global Capital Security, after the Release Date,
only if the transferor first delivers to the Property Trustee a written
certificate (in a form substantially similar to that attached hereto as the
"Form of Assignment" in Exhibit A-1) to the effect that such transfer is
being made in accordance with Rule 903 or 904 of Regulation S or Rule 144 (if
available).
(h) Authentication of Definitive Capital Securities. If at any
-----------------------------------------------
time:
(i) there occurs a Default or an Event of Default which is
continuing,
(ii) the Trust, in its sole discretion, notifies the Property
Trustee in writing that it elects to cause the issuance of Definitive
Capital Securities under this Trust Agreement, or
(iii) the Clearing Agency notifies the Sponsor that it is
unwilling or unable to continue as Clearing Agency for such Global
Capital Security or if at any time such Clearing Agency ceases to be a
"clearing agency" registered under the Exchange Act and a Clearing
Agency is not appointed by the Sponsor within 90 days of such notice.
50
then the Trust will execute, and the Property Trustee, upon receipt of a
written order of the Trust signed by one Administrative Trustee requesting
the authentication and delivery of Definitive Capital Securities to the
Persons designated by the Trust, will authenticate and make available for
delivery Definitive Capital Securities, equal in number to the number of
Capital Securities represented by the Global Capital Securities, in exchange
for such Global Capital Securities.
Any Global Capital Security that is transferable to the
beneficial owners thereof in the form of certificated Capital Securities
pursuant to Section 7.9 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 Capital Security, an equal
aggregate Liquidation Amount of Securities of authorized denominations in the
form of certificated Capital Securities. Any portion of a Global Capital
Security transferred pursuant to this Section shall be registered in such
names as the Clearing Agency shall direct. Any Capital Security in the form
of certificated Capital Securities delivered in exchange for an interest in
the Restricted Global Capital Security shall, except as otherwise provided by
Sections 7.3 and 9.1, bear the Restricted Securities Legend set forth in
Exhibit A-1 hereto.
In the event of the occurrence of any of the events specified in
this Section, the Trust will promptly make available to the Property Trustee
a reasonable supply of certificated Capital Securities in fully registered
form without distribution coupons.
(i) Legend.
------
(i) Except as permitted by the following paragraph (ii), each
Capital Security certificate evidencing the Global Capital Securities
and the Definitive Capital Securities (and all Capital Securities
issued in exchange therefor or substitution thereof, except in the
Exchange Offer) shall bear a legend (the "Restricted Securities
Legend") in substantially the following form:
THE CAPITAL SECURITIES REPRESENTED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES
LAW. NEITHER THIS CAPITAL SECURITY NOR ANY INTEREST
OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, REGISTRATION.
51
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE
HEREOF AGREES NOT TO OFFER, SELL OR OTHERWISE
TRANSFER THIS CAPITAL SECURITY, PRIOR TO THE DATE
(THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS
THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE
DATE HEREOF AND THE LAST DATE ON WHICH THE
CORPORATION OR ANY "AFFILIATE" OF THE CORPORATION WAS
THE OWNER OF THIS CAPITAL SECURITY (OR ANY
PREDECESSOR OF THIS CAPITAL SECURITY) EXCEPT (A) TO
THE SPONSOR OR THE TRUST, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS
THIS CAPITAL SECURITY IS ELIGIBLE FOR RESALE PURSUANT
TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"),
TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S.
PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN
THE MEANING OF REGULATION S UNDER THE SECURITIES ACT,
(E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7)
OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN ACCOUNT,
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS UNDER THE
SECURITIES ACT, SUBJECT TO THE RIGHT OF THE TRUST AND
THE SPONSOR PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
(i) PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND (ii) PURSUANT TO CLAUSE (E), TO REQUIRE
THAT THE TRANSFEROR DELIVER TO THE TRUST A LETTER
FROM THE TRANSFEREE SUBSTANTIALLY IN THE FORM OF
ANNEX A TO THE OFFERING MEMORANDUM DATED MARCH 4,
1997. SUCH HOLDER FURTHER AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS CAPITAL SECURITY
IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT
OF THIS LEGEND.
52
and in the case of the Regulation S Global Capital Security:
THIS CAPITAL SECURITY HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT AND MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS UNLESS REGISTERED UNDER THE
SECURITIES ACT OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT IS AVAILABLE.
In addition, the Regulation S Temporary Global Capital Security shall
bear the legends required under Section 7.3(d) hereof.
(ii) Upon any sale or transfer of a Restricted Capital Security
(including any Restricted Capital Security represented by a Global
Capital Security) pursuant to an effective registration statement under
the Securities Act or pursuant to Rule 144 under the Securities Act:
(A) in the case of any Restricted Capital Security that is
a Definitive Capital Security, the Registrar shall permit the
Holder thereof to exchange such Restricted Capital Security for a
Definitive Capital Security that does not bear the Restricted
Securities Legend and rescind any restriction on the transfer of
such Restricted Capital Security; and
(B) in the case of any Restricted Capital Security that is
represented by a Global Capital Security, the Registrar shall
permit the Holder of such Global Capital Security to exchange
such Global Capital Security for another Global Capital Security
that does not bear the Restricted Securities Legend.
(j) Cancellation or Adjustment of Global Capital Security. At
-----------------------------------------------------
such time as all beneficial interests in a Global Capital Security have
either been exchanged for Definitive Capital Securities to the extent
permitted by this Trust Agreement or redeemed, repurchased or canceled in
accordance with the terms of this Trust Agreement, such Global Capital
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 Capital Security is
exchanged for Definitive Capital Securities, Capital Securities represented
by such Global Capital Security shall be reduced and an adjustment shall be
made on the books and records of the Clearing Agency to reflect such
reduction.
53
(k) Obligations with Respect to Transfers and Exchanges of
------------------------------------------------------
Capital Securities.
- ------------------
(i) To permit registrations of transfers and exchanges, the
Trust shall execute and the Property Trustee shall authenticate
Definitive Capital Securities and Global Capital Securities at the
Registrar's or co-Registrar's request in accordance with the terms of
this Trust Agreement.
(ii) Registrations of transfers or exchanges will be effected
without charge, but only upon payment (with such indemnity as the Trust
or the Sponsor may require) in respect of any tax or other governmental
charge that may be imposed in relation to it.
(iii) The Registrar or co-Registrar shall not be required to
register the transfer of or exchange of (a) Capital 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 Capital
Securities for redemption and ending at the close of business on the
day of such mailing; or (b) any Capital Security so selected for
redemption in whole or in part, except the unredeemed portion of any
Capital Security being redeemed in part.
(iv) Prior to the due presentation for registration of transfer
of any Capital Security, the Trust, the Property Trustee, the Paying
Agent, the Registrar or any co-Registrar may deem and treat the Person
in whose name a Capital Security is registered as the absolute Holder
of such Capital Security for the purpose of receiving Distributions on
such Capital Security and for all other purposes whatsoever, and none
of the Trust, the Property Trustee, the Paying Agent, the Registrar or
any co-Registrar shall be affected by notice to the contrary.
(v) All Capital Securities issued upon any transfer pursuant to
the terms of this Trust Agreement shall evidence the same security and
shall be entitled to the same benefits under this Trust Agreement as
the Capital Securities surrendered upon such transfer or exchange.
(l) No Obligation of the Property Trustee.
-------------------------------------
(i) The Property Trustee shall have no responsibility or
obligation to any beneficial owner of a Global Capital Security, a
Participant in the Clearing Agency or other Person with respect to the
accuracy of the records of the Clearing Agency or its nominee or of any
Participant thereof, with respect to any ownership interest in the
Capital 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
54
redemption) or the payment of any amount, under or with respect to such
Capital Securities. All notices and communications to be given to the
Holders and all payments to be made to Holders under the Capital
Securities shall be given or made only to or upon the order of the
registered Holders (which shall be the Clearing Agency or its nominee in
the case of a Global Capital Security). The rights of beneficial owners in
any Global Capital 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 Trust Agreement or under
applicable law with respect to any transfer of any interest in any
Capital Security (including any transfers between or among Participants
or beneficial owners in any Global Capital 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 Trust Agreement, and to
examine the same to determine substantial compliance as to form with
the express requirements hereof.
(m) Exchange of Series A Capital Securities for Series B Capital
------------------------------------------------------------
Securities. The Series A Capital Securities may be exchanged for Series B
- ----------
Securities pursuant to the terms of the Exchange Offer. The Property Trustee
shall make the exchange as follows:
The Sponsor shall present the Property Trustee with an Officers'
Certificate certifying the following:
(A) upon issuance of the Series B Capital Securities,
the transactions contemplated by the Exchange Offer shall have
been consummated; and
(B) the number of Series A Capital Securities properly
tendered in the Exchange Offer that are represented by a Global
Capital Security and the number of Series A Capital Securities
properly tendered in the Exchange Offer that are represented by
Definitive Capital Securities, the name of each Holder of such
Definitive Capital Securities, the liquidation amount of Capital
Securities properly tendered in the Exchange Offer by each such
Holder and the name and address to which Definitive Capital
Securities for Series B Capital Securities shall be registered
and sent for each such Holder.
55
The Property Trustee, upon receipt of (i) such Officers'
Certificate, (ii) an Opinion of Counsel (x) to the effect that the Series B
Capital Securities have been registered under Section 5 of the Securities Act
and the Indenture has been qualified under the Trust Indenture Act and (y)
with respect to the matters set forth in Section 3(m) of the Registration
Rights Agreement and (iii) a Company Order, shall authenticate (A) a Global
Capital Security for Series B Capital Securities in aggregate liquidation
amount equal to the aggregate liquidation amount of Series A Capital
Securities represented by a Global Capital Security indicated in such
Officers' Certificate as having been properly tendered and (B) Definitive
Capital Securities representing Series B Capital Securities registered in the
names of, and in the liquidation amounts indicated in such Officers'
Certificate.
If, upon consummation of the Exchange Offer, less than all the
outstanding Series A Capital Securities shall have been properly tendered and
not withdrawn, the Property Trustee shall make an endorsement on the Global
Capital Security for Series A Capital Securities indicating the reduction in
the number and aggregate liquidation amount represented thereby as a result
of the Exchange Offer.
The Trust shall deliver such Definitive Capital Securities for
Series B Capital Securities to the Holders thereof as indicated in such
Officers' Certificate.
(n) Minimum Transfers. Capital Securities may only be
-----------------
transferred in minimum blocks of $100,000 aggregate Liquidation Amount and
integral multiples of $1,000 in excess thereof until such Capital Securities
are registered pursuant to an effective registration statement filed under
the Securities Act or "unrestricted" pursuant to Rule 144 under the
Securities Act.
SECTION 9.3. Deemed Security Holders.
-----------------------
The Trustees may treat the Person in whose name any Security
shall be registered on the books and records of the Trust as the sole 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, whether or not the Trust shall have actual or other notice thereof.
SECTION 9.4. Book Entry Interests.
--------------------
Global Capital 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 Beneficial Owner will receive a Definitive Capital
Security representing such Beneficial Owner's interests in such Global
Capital Securities, except as provided in Section 9.2. Unless and until
definitive,
56
fully registered Capital Securities certificates have been issued to the
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 Trust Agreement (including the
payment of Distributions on the Global Capital Securities and receiving
approvals, votes or consents hereunder) as the Holder of the Capital
Securities and the sole holder of the Global Certificates and shall have no
obligation to the Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4
conflict with any other provisions of this Trust Agreement, the provisions of
this Section 9.4 shall control; and
(d) the rights of the Beneficial Owners shall be exercised only
through the Clearing Agency and shall be limited to those established by law
and agreements between such Beneficial Owners and the Clearing Agency and/or
the Participants and receive and transmit payments of Distributions on the
Global Certificates to such Participants. DTC will make book entry transfers
among the Participants.
SECTION 9.5. Notices to Clearing Agency.
--------------------------
Whenever a notice or other communication to the Capital Security
Holders is required under this Trust Agreement, the Trustees shall give all
such notices and communications specified herein to be given to the Holders
of Global Capital Security to the Clearing Agency, and shall have no notice
obligations to the Beneficial Owners.
SECTION 9.6. Appointment of Successor Clearing Agency.
----------------------------------------
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Capital Securities, the
Administrative Trustees may, in their sole discretion, appoint a successor
Clearing Agency with respect to such Capital 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 Trust Agreement, the
Securities Guarantees and the terms of the Securities, the Sponsor shall not
be:
57
(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 (S) 3803(a) of the Business Trust Act, the Holders
of the Capital 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 for 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 Trust
Agreement or by law, except that an Indemnified Person shall be liable for
any such loss, damage or claim incurred by reason of such Indemnified
Person's gross negligence or willful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable
care by or on behalf of the Trust, including information, opinions, reports
or statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets
from which Distributions to Holders of Securities might properly be paid.
SECTION 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 Trust Agreement shall not be liable to the Trust or to any
other Covered Person for its good faith reliance on the provisions of this
Trust
58
Agreement. The provisions of this Trust 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 Persons; or
(ii) whenever this Trust Agreement or any other agreement
contemplated herein 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 Trust 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 Trust 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 Trust
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 or otherwise becomes
involved in any threatened, pending or completed action, suit or
59
proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
Trust) by reason of the fact that he is or was a Company
Indemnified Person against expenses (including attorneys' fees
and expenses), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the Company Indemnified Person did not act in
good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the Trust, and with
respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a
party or is threatened to be made a party to or otherwise becomes
involved in 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
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
60
therein, he shall be indemnified, to the full extent permitted by
law, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of
this Section 10.4(a) (unless ordered by a court) shall be made by
the Sponsor only as authorized in the specific case upon a
determination that indemnification of the Company Indemnified
Person is proper in the circumstances because he has met the
applicable standard of conduct set forth in paragraphs (i) and
(ii). Such determination shall be made (1) by the Administrative
Trustees, by a majority vote of a quorum consisting of such
Administrative Trustees who were not parties to such action, suit
or proceeding, (2) if such a quorum is not obtainable, or, even
if obtainable, if a quorum of disinterested Administrative
Trustees so directs, by independent legal counsel in a written
opinion, or (3) by the Holder of the Common Securities.
(v) Expenses (including attorneys' fees and expenses)
incurred by a Company Indemnified Person in defending or
participating in a civil, criminal, administrative or
investigative action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a) shall be paid by
the Sponsor in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf
of such Company Indemnified Person to repay such amount if it
shall ultimately be determined that he is not entitled to be
indemnified by the Sponsor as authorized in this Section
10.4(a). Notwithstanding the foregoing, no advance shall be made
by the Sponsor if a determination is reasonably and promptly made
(i) by the Administrative Trustees, by a majority vote of a
quorum of disinterested Administrative Trustees, (ii) if such a
quorum is not obtainable, or, even if obtainable, if a quorum of
disinterested Administrative Trustees so directs, by legal
counsel in a written opinion or (iii) the Holder of the Common
Securities, that, based upon the facts known to the
Administrative Trustees, counsel or the Holder of the Common
Securities at the time such determination is made, such Company
Indemnified Person acted in bad faith or in a manner that such
Person did not reasonably 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 any
Administrative Trustee, experienced legal counsel or Holder of
the Common Securities reasonably
61
determines that such Person deliberately breached his duty to the
Trust or the Holders of the Common Securities or of the Capital
Securities.
(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 Holders
of the Common Securities or Capital Securities of the Trust or
otherwise, both as to action in their 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 him and
incurred by him in any such capacity, or arising out of his
status as such, whether or not the Sponsor would have the power
to indemnify him against such liability under the provisions of
this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to
"the Trust" shall include, in addition to the resulting or
surviving entity, any constituent entity (including any
constituent of a constituent) absorbed in a consolidation or
merger, so that any Person who is or was a director, trustee,
officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director,
trustee, officer, employee or agent of another entity, shall
stand in the same position under the provisions of this Section
10.4(a) with respect to the resulting or surviving entity as he
would have with respect to such constituent entity if its
separate existence had continued.
(ix) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 10.4(a) shall,
unless otherwise provided when authorized or ratified, continue
as to a Person who has ceased to be a Company Indemnified Person
and shall inure to the benefit of the heirs, executors and
administrators of such a Person.
62
(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 gross
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses (including reasonable legal fees and expenses) of
defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 10.4(b)
shall survive the satisfaction and discharge of this Trust Agreement.
SECTION 10.5. Outside Businesses.
------------------
Any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar
or dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Trust 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.
63
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
64
held by the Property Trustee shall be made directly to the Property Trustee
Account and no other funds of the Trust shall be deposited in the Property
Trustee Account. The sole signatories for such accounts shall be designated by
the Administrative Trustees; provided, however, that the Property Trustee shall
designate the signatories for the Property Trustee Account.
SECTION 11.4. Withholding.
-----------
The Trust and the Administrative Trustees shall comply with all
withholding requirements under United States federal, state and local law.
The Trust shall request, and the Holders shall provide to the Trust, such
forms or certificates as are necessary to establish an exemption from
withholding with respect to each Holder, and any representations and forms as
shall reasonably be requested by the Trust to assist it in determining the
extent of, and in fulfilling, its 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 claimed over withholding, Holders shall be limited to an
action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may
reduce subsequent Distributions by the amount of such withholding.
ARTICLE XII.
AMENDMENTS AND MEETINGS
SECTION 12.1. Amendments.
----------
(a) Except as otherwise provided in this Trust Agreement or by
any applicable terms of the Securities, this Trust Agreement may only be
amended by a written instrument approved and executed by:
(i) 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.
65
(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 Trust Agreement (including the terms of
the Securities);
(ii) unless, in the case of any proposed amendment which affects
the rights, powers, duties, obligations or immunities of the Property
Trustee, the Property Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and
the Sponsor that such amendment is permitted by, and conforms to,
the terms of this Trust 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 Trust Agreement (including the
terms of the Securities),
provided, however, that the Property Trustee shall not be required to
-------- -------
sign any such amendment, and
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue 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 Securities may be effected only
with such additional requirements as may be set forth in the terms of such
Securities;
(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;
66
(e) Article Four shall not be amended without the consent of the
Holders of a Majority in Liquidation Amount of the Common Securities, and;
(f) The rights of the Holders of the Common Securities under
Article Five to increase or decrease the number of, and appoint and remove
Trustees, shall not be amended without the consent of the Holders of a
Majority in Liquidation Amount of the Common Securities; and
(g) Notwithstanding Section 12.1(c), this Trust Agreement may be
amended by the Property Trustee, the Administrative Trustees and the Sponsor
without the consent of the Holders of the Securities to:
(i) cure any ambiguity, correct or supplement any provision in
this Trust Agreement that may be inconsistent with any other provision
of this Trust Agreement or to make any other provisions with respect to
matters or questions arising under this Trust Agreement which shall not
be inconsistent with the other provisions of the Trust Agreement; and
(ii) to modify, eliminate or add to any provisions of this Trust
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 the case of clause (i), such action shall not
- -------- -------
adversely affect in any material respect the interests of the Holders of the
Securities, and any amendments of this Trust Agreement shall become effective
when notice thereof is sent 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 Trust
Agreement, the terms of the Securities or the rules of any stock exchange or
similar organization on which the Capital Securities are listed or admitted
for trading. The Administrative Trustees shall call a meeting of the Holders
of such class if directed to do so by the Holders of at least 30% in
Liquidation Amount of such class of Securities. 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
67
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) 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. Whenever a
vote, consent or approval of the Holders of Securities is permitted or
required under this Trust Agreement or the rules of any stock exchange
on which the Capital Securities are listed or admitted for trading,
such vote, consent or approval may be given at a meeting of the Holders
of Securities. Any action that may be taken at a meeting of the
Holders of Securities may be taken without a meeting if a consent or
consents in writing setting forth the action so taken is signed by the
Holders of Securities owning not less than the minimum amount of
Securities in Liquidation Amount that would be necessary to authorize
or take such action at a meeting at which all Holders of Securities
having a right to vote thereon were present and voting. Prompt notice
of the taking of action without a meeting shall be given to the Holders
of Securities entitled to vote who have not consented in writing. The
Administrative Trustees may specify that any written ballot submitted
to the Security Holder 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 11 months from the date thereof unless otherwise
provided in the proxy. Every proxy shall be revocable at the pleasure
of the Holder of Securities executing 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
68
other Person that a majority of the Administrative Trustees may designate;
and
(iv) unless the Business Trust Act, this Trust Agreement, the
terms of the Securities, the Trust Indenture Act or the listing rules
of any stock exchange or similar organization on which the Capital
Securities are then listed or trading, otherwise provides, the
Administrative Trustees, in their sole discretion, shall establish all
other provisions relating to meetings of Holders of Securities,
including notice of the time, place or purpose of any meeting at which
any matter is to be voted on by any Holders of Securities, waiver of
any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or
any other matter with respect to the exercise of any such right to vote.
ARTICLE XIII.
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1. Representations and Warranties of Property Trustee.
--------------------------------------------------
The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Trust Agreement,
and each Successor Property Trustee represents and warrants to the Trust and
the Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) The Property Trustee is a New York banking corporation with
trust powers and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Trust Agreement;
(b) The execution, delivery and performance by the Property
Trustee of the Trust Agreement has been duly authorized by all necessary
corporate action on the part of the Property Trustee. The Trust Agreement
has been duly executed and delivered by the Property Trustee 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 Trust
Agreement by the Property Trustee does not conflict with or constitute a
breach of the charter or by-laws of the Property Trustee; and
69
(d) No consent, approval or authorization of, or registration
with or notice to, any New York State or federal banking authority is
required for the execution, delivery or performance by the Property Trustee
of this Trust 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 Trust 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 duly organized, validly existing and
in good standing under the laws of the State of Delaware, with trust power
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Trust Agreement:
(b) The execution, delivery and performance by the Delaware
Trustee of this Trust Agreement has been duly authorized by all necessary
corporate action on the part of the Delaware Trustee. This Trust Agreement
has been duly executed and delivered by the Delaware Trustee 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 Trust
Agreement by the Delaware Trustee does not conflict with or constitute a
breach of the charter or by-laws of the Delaware Trustee; and
(d) No consent, approval or authorization of, or registration
with or notice to, any banking authority is required for the execution,
delivery or performance by the Delaware Trustee of this Trust 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.
70
ARTICLE XIV.
REGISTRATION RIGHTS
Section 14.1. Registration Rights Agreement; Liquidated Damages.
-------------------------------------------------
The Holders of the Capital Securities, the Debentures and the
Capital Securities Guarantee are entitled to the benefits of the Registration
Rights Agreement.
ARTICLE XV.
MISCELLANEOUS
SECTION 15.1. Notices.
-------
All notices provided for in this Trust 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):
c/o The Bank of New York
101 Barclay Street, 21-W
New York, NY 10286
Attention: Corporate Trust Administration
with a copy to:
RenaisanceRe Holdings Ltd.
Renaissance House
8-12 East Broadway
Pembroke HM 19 Bermuda
Attention: Keith S. Hynes
with a copy to:
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022-4677
Attention: John F. D'Alimonte, Esq.
(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):
The Bank of New York (Delaware)
White Clay Center, Route 373
Newark, Delaware 19711
Attention: Corporate Trust Administration
71
(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 Bank of New York
101 Barclay Street, 21-W
New York, New York 10286
Attention: Corporate Trust Administration
(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):
c/o RenaisanceRe Holdings Ltd.
Renaissance House
8-12 East Broadway
Pembroke HM 19 Bermuda
Attention: Keith S. Hynes
Administrative Trustee
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust.
All such notices shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 15.2. Governing Law.
-------------
THIS TRUST AGREEMENT AND THE RIGHTS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY AND INTERPRETED 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 THEREOF.
SECTION 15.3. 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 Trust Agreement shall be interpreted to further this
intention of the parties.
SECTION 15.4. Headings.
--------
Headings contained in this Trust Agreement are inserted for
convenience of reference only and do not affect the interpretation of this
Trust Agreement or any provision hereof.
72
SECTION 15.5. Successors and Assigns.
----------------------
Whenever in this Trust 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 Trust
Agreement by the Sponsor and the Trustees shall bind and inure to the benefit
of their respective successors and assigns, whether so expressed.
SECTION 15.6. Partial Enforceability.
----------------------
If any provision of this Trust Agreement, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Trust 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 15.7. Counterparts.
------------
This Trust Agreement may contain more than one counterpart of the
signature page and this Trust 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.
73
IN WITNESS WHEREOF, the undersigned has caused these presents to
be executed as of the day and year first above written.
/s/ Keith S. Hynes
---------------------------
Keith S. Hynes, as
Administrative Trustee
/s/ John D. Nichols
---------------------------
John D. Nichols, Jr., as
Administrative Trustee
/s/ Martin Merritt
---------------------------
Martin Merritt, as
Administrative Trustee
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: /s/ Mary Jane Morrissey
---------------------------
Name: Mary Jane Morrissey
Title: Authorized Signatory
THE BANK OF NEW YORK,
as Property Trustee
By: /s/ Byron Merino
---------------------------
Name: Byron Merino
Title: Assistant Treasurer
RENAISSANCERE HOLDINGS LTD.,
as Sponsor
By: /s/ Keith S. Hynes
---------------------------
Name: Keith S. Hynes
Title: Senior Vice President and Chief
Financial Officer
74
ANNEX I
TERMS OF
8.54% SERIES A/SERIES B CAPITAL SECURITIES
8.54% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration
of Trust, dated as of March 7, 1997 (as amended from time to time, the "Trust
Agreement"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Capital Securities and the Common
Securities (collectively, the "Securities") are set out below (each
capitalized term used but not defined herein has the meaning set forth in the
Trust Agreement or, if not defined in such Trust Agreement, as defined in the
Indenture or the Offering Memorandum dated March 4, 1997 of the Trust and the
Sponsor relating to the Securities):
1. Designation and Number.
----------------------
(a) Capital Securities. 100,000 Series A Capital Securities of the
------------------
Trust and 100,000 Series B Capital Securities of the Trust, each such series,
with an aggregate Liquidation Amount with respect to the assets of the Trust
of one hundred million dollars $100,000,000, and with a 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 "8.54% Series A Capital
Securities" and "8.54% Series B Capital Securities," respectively
(collectively, the "Capital Securities"). Upon consummation of the Exchange
Offer the Series B Capital Securities may be issued and shall be identical in
all respects to the series of Capital Securities issued at the Closing Time
except that such Capital Securities will not be subject to (i) the transfer
restrictions under the Securities Act contained in the series of Capital
Securities issued at the Closing Time (except Private Exchange Securities (as
defined in the Registration Rights Agreement), which may be subject to such
restrictions), (ii) the $100,000 minimum Liquidation Amount transfer
restriction set forth in Section 9.2(n) of the Trust Agreement or (iii) any
increase in the Distribution rate thereon under the Registration Rights
Agreement as Liquidated Damages. The certificates evidencing the Capital
Securities shall be substantially in the form of Exhibit A-1 to the Trust
Agreement, with such changes and additions thereto or deletions therefrom as
may be required by ordinary usage, custom or practice or to conform to the
rules of any stock exchange or quotation system on which the Capital
Securities are listed or quoted.
(b) Common Securities. 3,092.78351 Common Securities of the Trust
-----------------
with an aggregate Liquidation Amount with respect to the assets of the Trust
of three million ninety-two thousand seven hundred and eighty-three dollars
and fifty-one cents ($3,092,783.51) and a Liquidation Amount with respect to
the assets of the Trust of $1,000 per Security, are hereby designated
I-1
for the purposes of identification only as "8.54% Common Securities" (the
"Common Securities"). The certificates evidencing the Common Securities shall be
substantially in the form of Exhibit A-2 to the Trust Agreement, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.
2. Distributions.
-------------
(a) Distributions payable on each Security will be fixed at a rate per
annum of 8.54% (the "Coupon Rate") of the Liquidation Amount of $1,000 per
Security (the "Liquidation Amount"), such rate being the rate of interest
payable on the Debentures to be held by the Property Trustee. Distributions
in arrears for more than one semi-annual period will bear additional
distributions thereon compounded semi-annually at the Coupon Rate (to the
extent permitted by applicable law). Pursuant to the Registration Rights
Agreement, in certain limited instances the Debenture Issuer will be required
to pay Liquidated Damages (as defined in the Registration Rights Agreement)
with respect to the Debentures. The term "Distributions", as used herein,
includes distributions of any such Liquidated Damages unless otherwise
stated. A Distribution is payable only to the extent that payments are made
in respect of the Debentures held by the Property Trustee and to the extent
the Property Trustee has funds on hand legally available therefor.
(b) Distributions on the Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid
or, if no Distributions have been paid, from March 7, 1997, and will be
payable semi-annually in arrears on March 1 and September 1 of each year,
commencing on September 1, 1997, except as otherwise described below. The
amount of Distributions payable for any period will be computed on the basis
of a 360-day year consisting of twelve 30-day months and for any period of
less than a full calendar month on the basis of the actual number of days
elapsed in such month. If any date on which Distributions are payable on the
Securities is not a Business Day, then payment of the Distribution payable on
such date shall be made on the next succeeding day that is a Business Day
(and without any interest or other payment in respect of any such delay),
with the same force and effect as if made on such date (each date on which
Distributions are payable in accordance with the foregoing, a "Distribution
Date").
So 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 10 consecutive
semi-annual periods, (each an "Extension Period"), provided that no Extension
Period shall extend beyond the Maturity (as defined in Section 4(a) below) of
the Debentures. Upon any such election, Distributions will be deferred
during
I-2
such Extension Period. Notwithstanding such deferral, Distributions to which
holders of Securities are entitled shall continue to accumulate additional
Distributions 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 Coupon Rate compounded semi-annually from the relevant Distribution Dates
during any such Extension Period. Prior to the expiration of any 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 of such Extension Period, may not
exceed 10 consecutive semi-annual periods, or extend beyond the Maturity of the
Debentures. Upon the expiration of any Extension Period and the payment of all
amounts then due, the Debenture Issuer may commence a new Extension Period,
subject to the above requirements. The Property Trustee shall provide notice of
the Debenture Issuer's election to begin or extend an Extension Period to the
Holders of Securities.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear in the records of the Trust on the February 15 or
August 15 preceding the relevant Distribution Date. Subject to any
applicable laws and regulations and the provisions of the Trust Agreement,
each such payment in respect of the Capital Securities will be made as
described under the heading "Description of the Capital Securities -- Form,
Denomination, Book-Entry Procedures and Transfer" in the Offering Memorandum
dated March 4, 1997, of the Debenture Issuer and the Trust. At the option of
the Property Trustee, Distributions payable on any Securities that are not
punctually paid on any Distribution Date will cease to be payable to the
Holder on the relevant record date, and such defaulted Distribution will
instead be payable to the Holder in whose name such Securities are registered
on a special record date selected by the Property Trustee for such purpose.
(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 Pro Rata (as defined herein) pursuant to Section 8 among the
Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
-----------------------------------------
In the event of any dissolution or termination of the Trust or
the Sponsor otherwise gives notice of its election to liquidate the Trust
pursuant to Section 8.1(a)(iii) of the Trust Agreement, 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
I-3
Trust legally available for distribution to Holders, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, an amount
equal to the aggregate of the Liquidation Amount plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution").
"Like Amount" means (i) with respect to a redemption of the
Securities, Securities having a Liquidation Amount equal to the principal
amount of Debentures to be paid in accordance with their terms and (ii) with
respect to a distribution of Debentures upon the liquidation of the Trust,
Debentures having a principal amount equal to the Liquidation Amount of the
Securities of the Holder to whom such Debentures are distributed.
If, upon any such liquidation, the Liquidation Distribution can
be paid only in part because the Trust has insufficient assets on hand
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 as set forth in Section 8 hereof.
4. Redemption and Distribution.
---------------------------
(a) Upon the repayment of the Debentures on the Stated Maturity Date
thereof or prepayment thereof (in whole or in part) prior thereto (such
Stated Maturity Date or prior date of redemption, the "Maturity") in
accordance with the terms thereof, the proceeds from such repayment or
prepayment 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 the Stated Maturity Date, the
Maturity Redemption Price (as defined below), (ii) in the case of the
optional prepayment of the Debentures upon the occurrence and continuation of
a Special Event, the Special Event Redemption Price (as defined below) and
(iii) in the case of the optional prepayment of the Debentures other than as
a result of the occurrence and continuance of a Special Event, the Optional
Redemption Price (as defined below). The Maturity Redemption Price, the
Special Event Redemption Price and the Optional Redemption Price are referred
to collectively as the "Redemption Price".
(b) (i) The "Maturity Redemption Price", with respect to a
redemption of Securities, shall mean an amount equal to the principal of and
accrued interest on the Debentures as of the Stated Maturity Date thereof.
(ii) "Special Event Redemption Price" shall mean a price equal
to the greater of (i) 100% of the Liquidation Amount of Securities to be
redeemed or (ii) the sum, as determined by a Quotation Agent, of the present
values of the remaining scheduled payments of principal and interest on the
Debentures to March 1, 2007 (the first date on which the Debentures are
subject to
I-4
optional prepayment), discounted to the prepayment date on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Adjusted Treasury Rate, plus, in each case, accumulated and unpaid
Distributions thereon, if any, to the date of such prepayment.
(iii) "Optional Redemption Price" shall mean a price equal
to the percentage of the Liquidation Amount of Securities to be
redeemed plus accumulated and unpaid Distributions thereon, if any, to
the date of such redemption if redeemed during the 12-month period
beginning March 1 of the years indicated below.
Year Percentage
---- ----------
2007 104.270%
2008 103.843%
2009 103.416%
2010 102.989%
2011 102.562%
2012 102.135%
2013 101.708%
2014 101.281%
2015 100.854%
2016 100.427%
2017 and
thereafter 100.000%
(c) 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) each Holder of
Securities will receive a registered certificate or certificates representing
the Debentures to be delivered upon such distribution and (iii) Securities
will be deemed to represent beneficial interests in a Like Amount of
Debentures, and bearing accrued and unpaid interest in an amount equal to the
accumulated and unpaid Distributions on such Securities, until such
Certificates are presented to the Debenture Issuer or its agent for
cancellation, transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding
Securities unless all accumulated and unpaid Distributions have been paid on
all Securities for all semi-annual Distribution periods that expire on or
before the date of redemption.
(e) The procedure with respect to redemptions or distributions
of Debentures shall be as follows:
(i) Notice of any redemption, Extension Period or notice of
distribution of Debentures will be given by the Trust by mail to each Holder
of Securities to be redeemed or exchanged not fewer than 30 nor more than 60
days before the date fixed for
I-5
such occurrence which, in the case of a redemption, will be the date fixed for
redemption of the Debentures. 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 notice shall be addressed to the Holders of Securities at the
address of each such Holder appearing in the records of the Trust. No defect in
the notice or in the mailing of either thereof with respect to any Holder shall
affect the validity of the redemption or exchange proceedings with respect to
any other Holder.
(ii) In the event that fewer than all the outstanding Securities
are to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata
from each Holder of Securities; provided, however, that Pro Rata redemptions
shall be adjusted so that no Holder will hold less than $100,000 in
Liquidation Amount of Securities.
(iii) Notice of redemption shall be irrevocable and (A) with
respect to Capital Securities registered in the name of or held of record by
a Clearing Agency or its nominee, 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 maturity
or prepayment of the Debentures by 10:00 a.m., New York City time, on the
Maturity Date or the date of prepayment, as the case may be, the Property
Trustee or the Paying Agent will pay to the Clearing Agency or its nominee
funds sufficient to pay the applicable Redemption Price with respect to such
Definitive Capital Securities, and (B) with respect to Capital Securities and
Common Securities, provided that the Debenture Issuer has paid the Property
Trustee a sufficient amount of cash in connection with the related maturity
or prepayment of the Debentures, the Property Trustee or the Paying Agent
will pay the relevant Redemption Price to the Holders of such Securities
against presentation to the Registrar of the certificates therefor. If
notice shall have been given and funds deposited with the Property Trustee to
pay the Redemption Price (including all unpaid Distributions) with respect to
the Securities called for redemption, then immediately prior to the close of
business on the redemption date, 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) Neither the Administrative Trustees nor the Trust shall be
required to register or cause to be registered the transfer of (A) any
Securities beginning on the opening of business 15 days before the day of
mailing of notice or (B) any Securities selected for redemption (except the
unredeemed portion of any Security being redeemed). If any date fixed for
redemption of Securities is not a Business Day, then payment of
I-6
the Redemption Price payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other payment in respect
of any such delay), with the same force and effect as if made on such date fixed
for redemption. If payment of the Redemption Price in respect of any Securities
is improperly withheld or refused and not paid either by the Property Trustee or
the Paying Agent or by the Sponsor as guarantor pursuant to the relevant
Securities Guarantee on the date fixed for redemption, Distributions on such
Securities will continue to accumulate from such redemption date to the actual
date of payment.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities and banking laws), the
Sponsor or any of its Affiliates may at any time and from time to time
purchase outstanding Capital Securities by tender, in the open market or by
private agreement.
5. Voting Rights - Capital Securities.
----------------------------------
(a) Except as provided under Sections 5(b) and 7 and as
otherwise required by law and the Trust Agreement, the Holders of the Capital
Securities will have no voting rights.
(b) So long as any Debentures are held by the Property Trustee
for the benefit of the holders of the Trust Securities, the Trustees shall
not (i) direct the time, method and place of conducting any proceeding for
any remedy available to the Debenture Trustee, or executing any trust or
power conferred on such Debenture Trustee with respect to the Debentures,
(ii) waive any past default that is waivable under Section 5.13 of 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 the prior approval of the Holders of a majority in Liquidation
Amount of all outstanding Capital 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 Capital Securities.
The Trustees shall not revoke any action previously authorized or approved by
a vote of the Holders of the Capital Securities except by subsequent vote of
such Holders. The Property Trustee shall notify each Holder of Capital
Securities of any notice of default with respect to the Debentures. In
addition to obtaining the foregoing approvals of such Holders of the Capital
Securities, prior to taking any of the foregoing actions, the Trustees shall
obtain an opinion of counsel experienced in such matters to the effect that
the Trust will not be classified as an association taxable as a corporation
for United States federal income tax purposes on account of such action.
I-7
If an Event of Default under the Trust Agreement has occurred and
is continuing and such event is attributable to the failure of the Debenture
Issuer to pay principal of or premium, if any, or interest on the Debentures
on any due date (including any Interest Payment Date or prepayment date or
Maturity Date), then a Holder of Capital Securities may directly institute a
proceeding for enforcement of payment to such Holder of the principal of or
premium, if any, or interest on a Like Amount of Debentures (a "Direct
Action") on or after the respective due date specified in the Debentures. In
connection with such Direct Action, the rights of the Common Securities
Holders will be subrogated to the rights of the Holder of Capital Securities
to the extent of any payment made by the Debenture Issuer to the Holders of
Capital Securities in such Direct Action. Except as provided in the second
preceding sentence, the Holders of Capital Securities will not be able to
exercise directly any other remedy available to the holders of the Debentures.
Any required approval of Holders of Capital Securities may be
given at a separate meeting of Holders of Capital Securities convened for
such purpose, at a meeting of all of the Holders of Securities in the Trust
or pursuant to written consent. The Administrative Trustees will cause a
notice of any meeting at which Holders of Capital Securities are entitled to
vote, or of any matter upon which action by written consent of such Holders
is to be taken, to be mailed to each Holder of record of Capital Securities.
Each such notice will include a statement setting forth (i) the date of such
meeting or the date by which such action is to be taken, (ii) a description
of any resolution proposed for adoption at such meeting on which such Holders
are entitled to vote or of such matter upon which written consent is sought
and (iii) instructions for the delivery of proxies or consent.
No vote or consent of the Holders of the Capital Securities will
be required for the Trust to redeem and cancel Capital Securities or to
distribute the Debentures in accordance with the Trust Agreement and the
terms of the Securities.
Notwithstanding that Holders of Capital Securities are entitled
to vote or consent under any of the circumstances described above, any of the
Capital Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not 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), 6(c), and 7 and as
otherwise required by law and the Trust Agreement, the Holders of the Common
Securities will have no voting rights.
(b) Unless a Debenture Event of Default shall have occurred and
be continuing, any Trustee may be removed at any
I-8
time by the Holder of the Common Securities. If a Debenture Event of Default has
occurred and is continuing, the Property Trustee and the Delaware Trustee may be
removed at such time by the holders of a majority in Liquidation Amount of the
outstanding Capital Securities. In no event will the holders of the Capital
Securities have the right to vote to appoint, remove or replace the
Administrative Trustees, which voting rights are vested exclusively in the
Sponsor as the holder of the Common Securities. No resignation or removal of a
Trustee and no appointment of a successor trustee shall be effective until the
acceptance of appointment by the successor trustee in accordance with the
provisions of the Trust Agreement.
(c) So long as any Debentures are held by the Property Trustee
for the benefit of the Holders of the Trust Securities, the Trustees shall
not (i) direct the time, method and place of conducting any proceeding for
any remedy available to the Debenture Trustee, or execute any trust or power
conferred on such Debenture Trustee with respect to the Debentures, (ii)
waive any past default that is waivable under Section 5.13 of 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 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 each Holder of the Common Securities. The Trustees shall
not revoke any action previously authorized or approved by a vote of the
Holders of the Common Securities except by subsequent vote of such Holders.
The Property Trustee shall notify each Holder of Common Securities of any
notice of default with respect to the Debentures. In addition to obtaining
the foregoing approvals of such Holders of the Common Securities, prior to
taking any of the foregoing actions, the Trustees shall obtain an Opinion of
Counsel experienced in such matters to the effect that the Trust will not be
classified as an association taxable as a corporation for United States
federal income tax purposes on account of such action.
If an Event of Default under the Trust Agreement has occurred and
is continuing and such event is attributable to the failure of the Debenture
Issuer to pay principal of or premium, if any, or interest on the Debentures
on the due date (including any Interest Payment Date or prepayment date or
Maturity Date), then a Holder of Common Securities may institute a Direct
Action for enforcement of payment to such Holder of the principal of or
premium, if any, or interest on a Like Amount of Debentures on or after the
respective due date specified in the Debentures. In connection with such
Direct Action, the rights of the Common Securities Holders will be subrogated
to the rights of the
I-9
Holders of Capital Securities to the extent of any payment made by the Debenture
Issuer to Holders of Common Securities in such Direct Action. Except as provided
in the second preceding sentence, the Holders of Common Securities will not be
able to exercise directly any other remedy available to the holders of the
Debentures.
Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Administrative Trustees will cause a notice
of any meeting at which Holders of Common Securities are entitled to vote, or
of any matter upon which action by written consent of such Holders is to be
taken, to be mailed to each Holder of record of Common Securities. Each such
notice will include a statement setting forth (i) the date of such meeting or
the date by which such action is to be taken, (ii) a description of any
resolution proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will
be required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Trust Agreement and the
terms of the Securities.
7. Amendments to Trust Agreement and Indenture.
-------------------------------------------
In addition to the requirements set out in Section 12.1 of the
Trust Agreement, the Trust Agreement may be amended from time to time by the
Sponsor, the Property Trustee and the Administrative Trustees (i) with the
consent of Holders representing a majority in Liquidation Amount of all
outstanding Securities and (ii) upon receipt by the Trustees of an Opinion of
Counsel 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 that, without the consent of each Holder
-------- ----
of Securities, the Trust Agreement may not be amended to (i) change the
amount or timing of any Distribution on the Securities or otherwise adversely
affect the amount of any Distribution required to be made in respect of the
Securities as of a specified date or (ii) restrict the right of a Holder of
Securities to institute suit for the enforcement of any such payment on or
after such date.
8. Pro Rata.
--------
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each
Holder of Securities according to the aggregate
I-10
Liquidation Amount of the Securities held by the relevant Holder in relation to
the aggregate Liquidation Amount of all Securities outstanding unless, in
relation to a payment, an Event of Default under the Trust Agreement has
occurred and is continuing, in which case any funds available to make such
payment shall be paid first to each Holder of the Capital Securities pro rata
according to the aggregate Liquidation Amount of Capital Securities held by the
relevant Holder relative to the aggregate Liquidation Amount of all Capital
Securities outstanding, and only after satisfaction of all amounts owed to the
Holders of the Capital Securities, to each Holder of Common Securities pro rata
according to the aggregate Liquidation Amount of Common Securities held by the
relevant Holder relative to the aggregate Liquidation Amount of all Common
Securities outstanding.
9. Ranking.
-------
The Capital Securities rank pari passu with the Common Securities
and payment thereon shall be made Pro Rata with the Common Securities, except
that, if an Event of Default under the Trust 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 Capital 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 Guarantee and Indenture.
------------------------------------------------
Each Holder of Capital Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Capital Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
11. No Preemptive Rights.
--------------------
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
12. Miscellaneous.
-------------
These terms constitute a part of the Trust Agreement.
The Sponsor will provide a copy of the Trust Agreement, the
Capital Securities Guarantee or the Common Securities Guarantee (as may be
appropriate), and the Indenture (including any supplemental indenture) to a
Holder without charge on written request to the Sponsor at its principal
place of business.
I-11
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[IF THIS GLOBAL SECURITY IS A GLOBAL CAPITAL SECURITY, INSERT:
THIS CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITY WITHIN THE MEANING OF THE
TRUST AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING
AGENCY. THIS CAPITAL SECURITY IS EXCHANGEABLE FOR CAPITAL SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST AGREEMENT
AND NO TRANSFER OF THIS CAPITAL SECURITY (OTHER THAN A TRANSFER OF THIS
CAPITAL SECURITY AS A WHOLE BY THE CLEARING AGENCY TO A NOMINEE OF THE
CLEARING AGENCY OR BY A NOMINEE OF THE CLEARING AGENCY TO THE CLEARING AGENCY
OR ANOTHER NOMINEE OF THE CLEARING AGENCY) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES.]
[IF THIS GLOBAL SECURITY IS A RULE 144A GLOBAL SECURITY FOR WHICH
DTC IS ACTING AS CLEARING AGENCY, INSERT: UNLESS THIS CAPITAL SECURITY IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55
WATER STREET, NEW YORK, NEW YORK) TO THE TRUST OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CAPITAL SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY 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.]
THIS CAPITAL SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS CAPITAL
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF
AGREES NOT TO OFFER, SELL OR OTHERWISE TRANSFER THIS CAPITAL SECURITY, PRIOR
TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS
AFTER THE LATER OF THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
CAPITAL SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL SECURITY) EXCEPT (A) TO
THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS CAPITAL SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO A
PERSON IT
A1-1
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT
THAT IS ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT
OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT
TO THE RIGHT OF THE TRUST AND THE COMPANY PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER (i) PURSUANT TO CLAUSE (D), (E) OR (F), TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND (ii) PURSUANT TO CLAUSE (E), TO REQUIRE THAT THE TRANSFEROR DELIVER
TO THE TRUST A LETTER FROM THE TRANSFEREE SUBSTANTIALLY IN THE FORM OF ANNEX A
TO THE OFFERING MEMORANDUM OF THE TRUST DATED MARCH 4, 1997. SUCH HOLDER FURTHER
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS CAPITAL SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF ALSO
AGREES, REPRESENTS AND WARRANTS THAT EITHER (i)aIT IS NOT AN EMPLOYEE BENEFIT
PLAN SUBJECT TO THE EMPLOYMENT RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR (ii) THE ACQUISITION AND HOLDINGS OF THIS CAPITAL
SECURITY BY IT IS NOT PROHIBITED BY EITHER SECTION 406 OF ERISA OR SECTION
4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR EXEMPT FROM
ANY SUCH PROHIBITION.
[IF THIS GLOBAL SECURITY IS A REGULATION S GLOBAL SECURITY,
INSERT: THIS CAPITAL SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS UNLESS REGISTERED UNDER THE SECURITIES
ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
IS AVAILABLE.]
A1-2
Certificate Number Aggregate Liquidation Amount
of Capital Securities
CUSIP NO. __________
Certificate Evidencing Capital Securities
of
RENAISSANCERE CAPITAL TRUST
8.54% Capital Securities
(Liquidation Amount $1,000 per Capital Security)
RENAISSANCERE CAPITAL TRUST, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby certifies that
_______________________ (the "Holder") is the registered owner of
$__________________ in aggregate liquidation amount of Capital Securities of
the Trust representing undivided beneficial interests in the assets of the
Trust designated the 8.54% Series aa Capital Securities (Liquidation Amount
$1,000 per Capital Security) (the "Capital Securities"). The Capital
Securities are transferable on the books and records of the Trust, in person
or by a duly authorized attorney, upon surrender of this certificate duly
endorsed and in proper form for transfer. The designation, rights,
privileges, restrictions, preferences and other terms and provisions of the
Capital Securities represented hereby are set forth herein, in the reverse
hereof and in the provisions of the Amended and Restated Declaration of Trust
of the Trust dated as of March 7, 1997, as the same may be amended from time
to time (the "Trust Agreement"), and shall in all respects be subject to the
provisions thereof, including the designation of the terms of the Capital
Securities as set forth in Annex I to the Trust Agreement. Each capitalized
term used but not defined herein or in any legend form or certificate hereon
shall have the meaning given them in the Trust Agreement. The Sponsor will
provide a copy of the Trust Agreement, the Capital Securities Guarantee and
the Indenture to any 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 Capital Securities Guarantee to the extent provided therein.
By its acceptance hereof, the Holder agrees to treat, for United
States federal income tax purposes, the Debentures as indebtedness and the
Capital Securities as evidence of indirect beneficial ownership in the
Debentures.
A1-3
IN WITNESS WHEREOF, the Trust has executed this certificate this
__th day of March, 1997.
RENAISSANCERE CAPITAL TRUST
By:_____________________________
Name:
Title: Administrative Trustee
A1-4
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Series __ Capital Securities referred to in
the within-mentioned Trust Agreement.
Dated: _____________________
THE BANK OF NEW YORK,
as Property Trustee
By:__________________________
Authorized Signatory
A1-5
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be fixed at a
rate per annum of 8.54% (the "Coupon Rate") of the Liquidation Amount of
$1,000 per Capital Security, such rate being the rate of interest payable on
the Debentures to be held by the Property Trustee. Distributions in arrears
for more than one semi-annual period will bear interest thereon compounded
semi-annually at the Coupon Rate (to the extent permitted by applicable
law). The term "Distributions", as used herein, includes such cash
distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect
of the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds on hand legally available therefor.
Distributions on the Capital 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 March 7, 1997 and will be
payable semi-annually in arrears on March 1 and September 1 of each year,
commencing on September 1, 1997, except as otherwise described below and in
the Trust Agreement. Distributions will be computed on the basis of a
360-day year consisting of twelve 30-day months and, for any period of less
than a full calendar month, the number of days elapsed in such month.
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 10
consecutive calendar semiannual periods, including the first such semi-annual
period during such extension period (each an "Extension Period"), provided
that no Extension Period shall extend beyond the Maturity of the Debentures.
As a consequence of such deferral, Distributions will also be deferred.
Despite such deferral, semi-annual Distributions will continue to accumulate
with interest thereon (to the extent permitted by applicable law, but not at
a rate exceeding the rate of interest then accruing on the Debentures) at the
Coupon Rate compounded semi-annually 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 within such Extension Period, may not exceed 10
consecutive semi-annual periods, or extend beyond the Maturity of the
Debentures. Payments of Distributions that have accumulated during any
Extension Period will be payable to Holders as they appear on the books and
records of the Trust on the record date for the first scheduled Distribution
payment date following the expiration of such Extension Period. Upon the
expiration of any Extension Period and the payment of all amounts then due,
the Debenture
A1-6
Issuer may commence a new Extension Period, subject to the
above requirements.
The Administrative Trustees shall, at the direction of the
Sponsor, at any time liquidate the Trust and cause the Debentures to be
distributed to the holders of the Securities in liquidation of the Trust or,
simultaneously with any redemption of the Debentures, cause a Like Amount of
the Securities to be redeemed by the Trust.
The Capital Securities shall be redeemable as provided in the
Trust Agreement.
A1-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Capital 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 Capital 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 Capital Security
Certificate)
Signature Guarantee:____________________________
________________________
* Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities and Exchange Act of 1934, as amended.
A1-8
[Include the following if the Capital Security bears a Restricted Capital
Securities Legend]
In connection with any transfer of any of the Capital Securities evidenced by
this certificate, the undersigned confirms that such Capital Securities are
being:
CHECK ONE BOX BELOW
(1) [_] exchanged for the undersigned's own account without
transfer; or
(2) [_] transferred pursuant to and in compliance with Rule 144A
under the Securities Act of 1933; or
(3) [_] transferred pursuant to and in compliance with Regulation S
under the Securities Act of 1933; or
(4) [_] transferred to an institutional "accredited investor"
within the meaning of subparagraph (a)(1), (2), (3) or (7)
of Rule 501 under the Securities Act of 1933 that is
acquiring the Capital Securities for its own account, or
for the account of such an institutional "accredited
investor," for investment purposes and not with a view to,
or for offer or sale in connection with, any distribution
in violation of the Securities Act of 1933; or
(5) [_] transferred pursuant to another available exemption from
the registration requirements of the Securities Act of
1933; or
(6) [_] transferred pursuant to an effective registration statement.
Unless one of the boxes is checked, the Registrar will refuse to register any
of the Capital Securities evidenced by this certificate in the name of any
person other than the registered Holder thereof; provided, however, that if
-------- -------
box (3), (4) or (5) is checked, the Registrar may require, prior to
registering any such transfer of the Capital Securities such legal opinions,
certifications and other information as the Trust has reasonably requested to
confirm that such transfer is being made pursuant to an exemption from, or in
a transaction not subject to, the registration requirements of the Securities
Act of 1933, such as the exemption provided by Rule 144 under such Act;
provided, further, that (i) if box 2 is checked, the transferee must also
- -------- -------
certify that it is a qualified institutional buyer as defined in Rule 144A or
(ii) if box (4) is checked, the transferee must also provide to the Registrar
a Transferee Letter of Representation in the form attached to the Offering
Memorandum of the Trust dated March 4, 1997.
A1-9
Date:_____________________
Signature:__________________________
(Sign exactly as your name appears on the other side of this Capital Security
Certificate)
A1-10
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS
OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS COMMON SECURITY NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT
TO, SUCH REGISTRATION.
THE HOLDER OF THIS COMMON SECURITY BY ITS ACCEPTANCE HEREOF
AGREES NOT TO OFFER, SELL OR OTHERWISE TRANSFER THIS COMMON SECURITY, PRIOR
TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS
AFTER THE LATER OF THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
CAPITAL SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL SECURITY) EXCEPT (A) TO
THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS COMMON SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS
AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR
(7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS COMMON
SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF
THE TRUST AND THE COMPANY PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i)
PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND (ii) PURSUANT TO CLAUSE (E), TO REQUIRE THAT THE TRANSFEROR DELIVER
TO THE TRUST A LETTER FROM THE TRANSFEREE SUBSTANTIALLY IN THE FORM OF ANNEX
A TO THE OFFERING MEMORANDUM OF THE TRUST DATED MARCH 4, 1997. SUCH HOLDER
FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS COMMON
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
RENAISSANCERE CAPITAL TRUST
8.54 % Common Securities
(Liquidation Amount $1,000 per Common Security)
RENAISSANCERE CAPITAL TRUST, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby certifies that
RenaissanceRe Holdings Ltd., a Bermuda company (the "Holder"), is the
registered owner of ________________________ common securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the 8.54% Common Securities (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 set forth herein, on the reverse hereof and in the Amended and Restated
Declaration of Trust of the Trust dated as of March 7, 1997, as the same may
be amended from time to time (the "Trust Agreement"), and shall in all
respects be subject to the provisions thereof, including the designation of
the terms of the Common Securities as set forth in Annex I to the Trust
Agreement. Each capitalized term used but not defined herein or in any
legend, form or certificate hereon shall have the meaning given them in the
Trust Agreement. The Sponsor will provide a copy of the Trust Agreement, the
Common Securities Guarantee and the Indenture (including any supplemental
indenture) to any Holder without charge upon written request to the Sponsor
at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Trust Agreement and is entitled to the benefits thereunder and to the
benefits of the Common Securities Guarantee to the extent provided therein.
By its acceptance hereof, 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.
A2-2
IN WITNESS WHEREOF, the Trust has executed this certificate this __th
day of March, 1997.
RENAISSANCERE CAPITAL TRUST
By:_____________________________
Name:
Title: Administrative Trustee
A2-3
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a
rate per annum of 8.54% (the "Coupon Rate") of the Liquidation Amount of
$1,000 per Common Security, such rate being the rate of interest payable on
the Debentures to be held by the Property Trustee. Distributions in arrears
for more than one semi-annual period will bear interest thereon compounded
semiannually at the Coupon Rate (to the extent permitted by applicable law).
Pursuant to the Registration Rights Agreement, in certain limited
circumstances the Debenture Issuer will be required to pay Liquidated Damages
(as defined in the Registration Rights Agreement) with respect to the
Debentures. The term "Distributions", as used herein, includes such cash
distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect
of the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds available therefor.
Distributions on the Common Securities will be cumulative, will
accrue from the most recent date to which Distributions have been paid or, if
no Distributions have been paid, from March 7, 1997 and will be payable
semi-annually in arrears on March 1 and September 1 of each year, commencing
on September 1, 1997, except as otherwise described below and in the Trust
Agreement. Distributions will be computed on the basis of a 360-day year
consisting of twelve 30 day months and, for any period of less than a full
calendar month, the number of days elapsed in such month.
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
10 consecutive calendar semi-annual periods, including the first such
semi-annual period during such extension period (each an "Extension Period"),
provided that no Extension Period shall extend beyond the Maturity of the
Debentures. As a consequence of such deferral, Distributions will also be
deferred. Despite such deferral, Distributions will continue to accumulate
with interest thereon (to the extent permitted by applicable law, but not at
a rate exceeding the rate of interest then accruing on the Debentures) at the
Coupon Rate compounded semi-annually 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 within such Extension Period, may not exceed 10
consecutive semi-annual periods, including the first semi-annual period
during such Extension Period, or extend beyond the Maturity of the
Debentures. Payments of Distributions that have accumulated but not been
paid during any Extension Period
A2-4
will be payable to Holders as they appear on the books and records of the Trust
on the record date for the first Distribution Date following the expiration of
such Extension Period. Upon the expiration of any Extension Period and the
payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
The Administrative Trustees shall, at the direction of the
Sponsor, at any time liquidate the Trust and cause the Debentures to be
distributed to the holders of the Securities in liquidation of the Trust or,
simultaneous with any redemption of the Debentures, cause a Like Amount of
the Securities to be redeemed by the Trust.
The Common Securities shall be redeemable as provided in the
Trust Agreement.
A2-5
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*:______________________________________
_____________________
* Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities and
Exchange Act of 1934, as amended.
A2-6
[Include the following if the Common Security bears a Restricted Common
Securities Legend]
In connection with any transfer of any of the Common Securities evidenced by
this certificate, the undersigned confirms that such Common Securities are
being:
CHECK ONE BOX BELOW
(1) [_] exchanged for the undersigned's own account without
transfer; or
(2) [_] transferred pursuant to and in compliance with Rule 144A
under the Securities Act of 1933; or
(3) [_] transferred pursuant to and in compliance with Regulation S
under the Securities Act of 1933; or
(4) [_] transferred to an institutional "accredited investor"
within the meaning of subparagraph (a)(1), (2), (3) or (7)
of Rule 501 under the Securities Act that is acquiring the
Preferred Security for its own account, or for the account
of such an institutional "accredited investor," for
investment purposes and not with a view to, or for offer or
sale in connection with, any distribution in violation of
the Securities Act; or
(5) [_] transferred pursuant to another available exemption from
the registration requirements of the Securities Act of
1933; or
(6) [_] transferred pursuant to an effective registration statement
Unless one of the boxes is checked, the Registrar will refuse to register any
of the Common Securities evidenced by this certificate in the name of any
person other than the registered Holder thereof; provided, however, that if
-------- -------
box (3), (4) or (5) is checked, the Registrar may require, prior to
registering any such transfer of the Common Securities such legal opinions,
certifications and other information as the Trust has reasonably requested to
confirm that such transfer is being made pursuant to an exemption from, or in
a transaction not subject to, the registration requirements of the Securities
Act of 1933, such as the exemption provided by Rule 144 under such Act;
provided, further, that (i) if box 2 is checked, the transferee must also
A2-7
certify that it is a qualified institutional buyer as defined in Rule 144A or
(ii) if box 4 is checked, the transferee must also provide a Transferee
Representation Letter in the form attached to the Offering Memorandum of the
Trust, dated March 4, 1997.
Date:_______________________
Signature:______________________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
A2-8
EXHIBIT B-1
(FORM OF EUROCLEAR AND CEDEL CERTIFICATE)
(Pursuant to Section 7.3(d) of the Trust Agreement)
Re: 8.54% CAPITAL SECURITIES, SERIES A OF RENAISSANCERE CAPITAL
TRUST
THE BANK OF NEW YORK, as Principal
Paying Agent
101 Barclay Street, 21-W
New York, NY 10286
Attention: Corporate Trust
This is to certify that, based solely on certifications we have
received in writing, by tested telex or by electronic transmission from
member organizations appearing in our records as persons being entitled to a
portion of the principal amount of the Capital Securities set forth below
(our "Member Organizations") substantially to the effect set forth in the
Amended and Restated Declaration of Trust of RenaissanceRe Capital Trust
(the "Trust Agreement"), dated as of March 7, 1997, U.S. $________________
principal amount of the above-captioned Capital Securities held by us or on
our behalf are beneficially owned by non-U.S. person(s). As used in this
paragraph, the term "U.S. person" has the meaning given to it by Regulation S
under the United States Securities Act of 1933, as amended.
We further certify that as of the date hereof we have not
received any notification from any of our Member Organizations to the effect
that the statements made by such Member Organizations with respect to any
interest in the Capital Securities identified above are no longer true and
cannot be relied upon as of the date hereof.
[On Release Date: We hereby acknowledge that no portion of the
Regulation S Temporary Global Capital Security shall be exchanged for an
interest in the Regulation S Permanent Global Capital Security (as each such
term in defined in the Trust Agreement) with respect to the portion thereof
for which we have not received the applicable certifications from our Member
Organizations.]*/
[On September 1, 1997 and upon any other payments under the
Regulation S Temporary Global Capital Security: We hereby agree to hold (and
return to the Paying Agent upon request) any payments received by us on the
Regulation S Temporary Global Capital Security (as defined in the Trust
Agreement) with respect to the portion thereof for which we have not received
the applicable certifications from our Member Organizations.]*
We understand that this certification is required in connection
with certain securities laws of the United States of America. In connection
therewith, if administrative or legal
proceedings are commenced or threatened in connection with which this
certification is or would be relevant, we irrevocably authorize you to produce
this certification to any interested party in such proceedings.
Dated: ___________________________ **/
--
[MORGAN GUARANTY TRUST OF
NEW YORK, Brussels office, as
operator of the Euroclear System
or
Cedel, societe anonyme]
By: ___________________________
Name:
Title
________________________________
**/ Insert Release Date or applicable Payment Date, as the case
- -- may be.
B-1-2
EXHIBIT B-2
[FORM OF CERTIFICATION TO BE GIVEN BY
HOLDER OF BENEFICIAL INTEREST IN
REGULATION S TEMPORARY GLOBAL SECURITY]
(Pursuant to Section 7.3(d) of the Indenture)
Re: 8.54% CAPITAL SECURITIES, SERIES A OF
RENAISSANCERE CAPITAL TRUST
Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear
system] [Cedel, societe anonyme]
Securities, [CINS No. ______] [ISIN No. _____]
Reference is hereby made to the Amended and Restated Declaration
of Trust of RenaissanceRe Capital Trust, dated as of March 7, 1997 (the
"Trust Agreement"). Capitalized terms used herein and not otherwise defined
have the meanings set forth in the Trust Agreement.
[For purposes of acquiring a beneficial interest in the
Regulation S Permanent Global Capital Security upon the expiration of the
Restricted Period,] [For purposes of receiving payments under the Regulation
S Temporary Global Capital Security, */ the undersigned holder of a
-
beneficial interest in the Regulation S Temporary Global Capital Security
issued under the Trust Agreement certifies that it is not a U.S. Person as
defined by Regulation S under the Securities Act of 1933, as amended.
We undertake to advise you promptly by telex on or prior to the
date on which you intend to submit your corresponding certification relating
to the Capital Securities held by you if any applicable statement herein is
not correct on such date, and in the absence of any such notification it may
be assumed that this certificate applies as of such date.
We understand that this certificate is required in connection
with certain securities laws of the United States. In connection therewith,
if administrative or legal proceedings are commenced or threatened in
connection with which this certificate is or would be relevant, we
irrevocably authorize you to produce
this certificate to any interested party in such proceeding. This certificate
and the statements contained herein are made for your benefit and the health of
the Trust and the Initial Purchasers.
Dated: ____________________, _____
By: ______________________________
as, or as agent for, the
holder of a beneficial
Interest in the Securities to
which this certificate relates.
______________________________
**/ Insert Release Date or Applicable Payment Date, as the case
- -- may be.
B-2-2