SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12 (b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
-------------------------
Citicorp Capital III
(Exact name of registrant as specified in its charter)
Delaware Applied for
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o Citicorp
399 Park Avenue
New York, New York 10043
(Address of principal (Zip Code)
executive offices)
SECURITIES TO BE REGISTERED PURSUANT TO
SECTION 12 (g) OF THE ACT:
9,000,000 7.10% Capital Securities
(Liquidation Amount $25 per Capital Security)
(the "Capital Securities")
Item 1. Description of Registrant's Securities.
1.1 For a description of the Capital Securities reference is hereby
made to the description of the Capital Securities contained in the Prospectus
dated June 19, 1998 as supplemented by the Prospectus Supplement dated June 19,
1998 relating to the Capital Securities filed with the Securities and Exchange
Commission pursuant to Rule 424 (b) under the Securities Act of 1933 (File No.
333-21134) and incorporated herein by reference (see in particular "Description
of the Capital Securities" in the Prospectus Supplement and "Description of the
Preferred Securities" in the Prospectus).
Item 2. Exhibits.
2.1 Amended and Restated Declaration of Trust dated as of
June 26, 1998
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Registration Statement on Form 8-A to be
signed on its behalf by the undersigned, thereunto duly authorized.
CITICORP CAPITAL III
Registrant
By: /s/ John F. Rice
---------------------
John F. Rice
Regular Trustee
Date: June 26, 1998
AMENDED AND RESTATED DECLARATION
OF TRUST
CITICORP CAPITAL III
Dated as of June 26, 1998
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I INTERPRETATION AND DEFINITIONS ............................... 1
SECTION 1.1 Definitions .............................................. 1
ARTICLE II TRUST INDENTURE ACT .......................................... 8
SECTION 2.1 Trust Indenture Act; Application ......................... 8
SECTION 2.2 Lists of Holders of Securities ........................... 8
SECTION 2.3 Reports by the Institutional Trustee ..................... 9
SECTION 2.4 Periodic Reports to Institutional Trustee ................ 9
SECTION 2.5 Evidence of Compliance with Conditions Precedent ......... 9
SECTION 2.6 Events of Default; Waiver ................................ 9
SECTION 2.7 Event of Default; Notice ................................. 11
ARTICLE III ORGANIZATION ................................................ 11
SECTION 3.1 Name ..................................................... 11
SECTION 3.2 Office ................................................... 12
SECTION 3.3 Purpose .................................................. 12
SECTION 3.4 Authority ................................................ 12
SECTION 3.5 Title to Property of the Trust ........................... 12
SECTION 3.6 Powers and Duties of the Regular Trustees ................ 12
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees ..... 15
SECTION 3.8 Powers and Duties of the Institutional Trustee ........... 16
SECTION 3.9 Certain Duties and Responsibilities of the
Institutional Trustee .................................. 18
SECTION 3.10 Certain Rights of Institutional Trustee ................... 20
SECTION 3.11 Delaware Trustee ......................................... 22
SECTION 3.12 Execution of Documents ................................... 23
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities ... 23
SECTION 3.14 Duration of Trust ........................................ 23
SECTION 3.15 Mergers .................................................. 23
SECTION 3.16 Limitation to Trust Property ............................. 25
SECTION 3.17 Compensation and Fees .................................... 25
ARTICLE IV SPONSOR ....................................................... 25
SECTION 4.1 Sponsor's Purchase of Common Securities .................. 26
SECTION 4.2 Responsibilities of the Sponsor .......................... 26
ARTICLE V TRUSTEES ..................................................... 26
SECTION 5.1 Number of Trustees ....................................... 26
SECTION 5.2 Delaware Trustee ......................................... 27
SECTION 5.3 Institutional Trustee; Eligibility ....................... 27
SECTION 5.4 Certain Qualifications of Regular Trustees
and Delaware Trustee Generally ......................... 28
SECTION 5.5 Regular Trustees ......................................... 28
SECTION 5.6 Delaware Trustee. ........................................ 29
SECTION 5.7 Appointment, Removal and Resignation of Trustees ......... 29
SECTION 5.8 Vacancies among Trustees ................................. 30
SECTION 5.9 Effect of Vacancies ...................................... 30
SECTION 5.10 Meetings ................................................. 31
SECTION 5.11 Delegation of Power ...................................... 31
SECTION 5.12 Merger, Conversion, Consolidation
or Succession to Business .............................. 32
SECTION 5.13 Co-Trustees and Separate Trustee ......................... 32
ARTICLE VI DISTRIBUTIONS ................................................. 33
SECTION 6.1 Distributions ............................................ 33
i
<PAGE>
Page
ARTICLE VII ISSUANCE OF SECURITIES ..................................... 34
SECTION 7.1 General Provisions Regarding Securities .................. 34
SECTION 7.2 Paying Agent ............................................. 35
ARTICLE VIII DISSOLUTION AND TERMINATION OF TRUST ........................ 35
SECTION 8.1 Dissolution and Termination of Trust ..................... 35
ARTICLE IX TRANSFER OF INTERESTS ......................................... 36
SECTION 9.1 Transfer of Securities ................................... 36
SECTION 9.2 Transfer of Certificates ................................. 37
SECTION 9.3 Deemed Security Holders .................................. 38
SECTION 9.4 Book Entry Interests ..................................... 38
SECTION 9.5 Notices to Clearing Agency ............................... 39
SECTION 9.6 Appointment of Successor Clearing Agency ................. 39
SECTION 9.7 Definitive Capital Security Certificates ................. 40
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates ........ 40
ARTICLE X LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS ........................................ 41
SECTION 10.1 Liability ................................................. 41
SECTION 10.2 Exculpation ............................................... 41
SECTION 10.3 Fiduciary Duty ............................................ 42
SECTION 10.4 Indemnification ........................................... 43
SECTION 10.5 Outside Businesses ........................................ 45
ARTICLE XI ACCOUNTING .................................................... 46
SECTION 11.1 Fiscal Year ............................................... 46
SECTION 11.2 Certain Accounting Matters ................................ 46
SECTION 11.3 Banking ................................................... 47
SECTION 11.4 Withholding ............................................... 47
ARTICLE XII AMENDMENTS AND MEETINGS ...................................... 47
SECTION 12.1 Amendments ................................................ 47
SECTION 12.2 Meetings of the Holders of Securities; Action by
Written Consent ......................................... 49
ARTICLE XIII REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND DELAWARE
TRUSTEE ................................................. 51
SECTION 13.1 Representations and Warranties of Institutional
Trustee ................................................. 51
SECTION 13.2 Representations and Warranties of Delaware Trustee ........ 51
ARTICLE XIV MISCELLANEOUS .............................................. 52
SECTION 14.1 Notices ................................................... 52
SECTION 14.2 Governing Law ............................................. 54
SECTION 14.3 Intention of the Parties .................................. 55
SECTION 14.4 Headings .................................................. 55
SECTION 14.5 Successors and Assigns .................................... 55
SECTION 14.6 Partial Enforceability .................................... 55
SECTION 14.7 Counterparts .............................................. 55
ii
<PAGE>
Page
ANNEX I TERMS OF SECURITIES........................................ I-1
EXHIBIT A-1 FORM OF CAPITAL SECURITY CERTIFICATE....................... A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE........................ A2-1
EXHIBIT B SPECIMEN OF DEBENTURE...................................... B-1
EXHIBIT C UNDERWRITING AGREEMENT..................................... C-1
iii
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
310(a)............................................. 5.3(a)
310(c)............................................. Inapplicable
311(c)............................................. Inapplicable
312(a)............................................. 2.2(a)
312(b)............................................. 2.2(b)
313................................................ 2.3
314(a)............................................. 2.4
314(b)............................................. Inapplicable
314(c)............................................. 2.5
314(d)............................................. Inapplicable
314(f)............................................. Inapplicable
315(a)............................................. 3.9(b)
315(c)............................................. 3.9(a)
315(d)............................................. 3.9(a)
316(a)............................................. Annex I
316(c)............................................. 3.6(e)
- ---------------
* This Cross-Reference Table does not constitute part of the
Declaration and shall not affect the interpretation of any of
its terms or provisions
iv
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
CITICORP CAPITAL III
June 26, 1998
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of June 26, 1998, by the Trustees (as defined herein), the Sponsor
(as defined herein) and by the holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established Citicorp Capital
III (the "Trust"), a trust under the Delaware Business Trust Act pursuant to a
Declaration of Trust dated as of October 25, 1996 (the "Original Declaration"),
and a Certificate of Trust filed with the Secretary of State of the State of
Delaware on October 25, 1996, for the sole purpose of issuing and selling
certain securities representing undivided beneficial interests in the assets of
the Trust and investing the proceeds thereof in certain Debentures of the
Debenture Issuer;
WHEREAS, as of the date hereof, no interests in the Trust have
been issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
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 Declaration 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 Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.1;
1
<PAGE>
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Additional Interest" has the meaning set forth in the Indenture.
"Adjusted Treasury Rate" has the same meaning set forth in Section
4(d) of Annex I.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent.
"Authorized Officer" of a Person means any Person that is authorized
to legally bind such Person.
"Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than Saturday, Sunday or any
other day on which banking institutions in New York City, are permitted or
required by any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code ss. 3801 et seq., as it may be amended from time to time, or
any successor legislation.
"Capital Securities" has the meaning specified in Section 7.1(a).
2
<PAGE>
"Capital Securities Guarantee" means the guarantee agreement to be
dated as of June 26, 1998, of the Sponsor in respect of the Capital Securities.
"Capital Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Capital Security Certificate" means a certificate representing a
Capital Security substantially in the form of Exhibit A-1.
"Certificate" means a Common Security Certificate or a Capital
Security Certificate.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the 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.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the "Closing Date" under the Underwriting
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning specified in Section 7.1(a).
"Common Securities Guarantee" means the guarantee agreement to be
dated as of June 26, 1998 of the Sponsor in respect of the Common Securities.
"Common Security Certificate" means a definitive certificate in
fully registered form representing a Common Security substantially in the form
of Exhibit A-2.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Comparable Treasury Issue" has the meaning set forth in Section
4(d) of Annex I.
3
<PAGE>
"Comparable Treasury Price" has the meaning set forth in Section
4(d) of Annex I.
"Corporate Trust Office" means the office of the Institutional
Trustee at which the corporate trust business of the Institutional Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at Rodney Square North, 9th
Floor, 1100 North Market Street, Wilmington, Delaware 19890-0001.
"Coupon Rate" has the meaning set forth in Section 2(a) of Annex
I.
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii)
the Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Citicorp, a Delaware corporation, or any
successor entity resulting from any consolidation, amalgamation, merger or other
business combination, in its capacity as issuer of the Debentures under the
Indenture.
"Debenture Trustee" means Wilmington Trust Company, a national
banking association duly organized and existing under the laws of the United
States, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
"Debentures" means the series of Debentures to be issued by the
Debenture Issuer under the Indenture to be held by the Institutional Trustee, a
specimen certificate for such series of Debentures being Exhibit B.
"Definitive Capital Security Certificates" has the meaning set
forth in Section 9.4.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Dissolution Tax Opinion" has the meaning set forth in Annex I
hereto.
"Distribution" means a distribution payable to Holders of Securities
in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing
Agency.
"Event of Default" in respect of the Securities means an Event of
Default (as defined in the Indenture) that has occurred and is continuing in
respect of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in
Section 10.4(b).
4
<PAGE>
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of December 17, 1996, among
the Debenture Issuer and the Debenture Trustee, and any indenture supplemental
thereto pursuant to which the Debentures are to be issued.
"Institutional Trustee" has the meaning set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in
Section 3.8(c).
"Investment Company" means an investment company as defined in
the Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940,
as amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Capital Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Capital Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of more than 50% of the aggregate liquidation amount (including the
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.
"No Recognition Opinion" has the meaning set forth in Annex I
hereto.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman, a Vice Chairman, a Vice President, the Chief
Auditor, the Treasurer, the Secretary or an Assistant Secretary of such Person.
Any Officers' Certificate delivered with respect to compliance with a condition
or covenant provided for in this Declaration shall include:
(a) a statement that each officer signing the Certificate has read
the covenant or condition and the definitions relating thereto;
5
<PAGE>
(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.
"Paying Agent" has the meaning specified in
Section 7.2.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Pricing Agreement" means the pricing agreement between the Trust,
the Debenture Issuer and the underwriters designated by the Regular Trustees
with respect to the offer and sale of the Capital Securities.
"Quorum" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"Quotation Agent" has the meaning set forth in Section 4(d) of
Annex I.
"Regular Trustee" has the meaning set forth in
Section 5.1.
"Regulatory Capital Event" has the meaning set forth in Annex I
hereto.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Institutional
Trustee, any officer within the Corporate Trust Office of the Institutional
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 Institutional 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.
6
<PAGE>
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act, or any
successor rule or regulation.
"Securities" means the Common Securities and the Capital
Securities.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee and
the Capital Securities Guarantee.
"Sponsor" means Citicorp, a Delaware corporation, or any successor
entity resulting from any merger, consolidation, amalgamation or other business
combination, in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section
5.7.
"Successor Institutional Trustee" has the meaning set forth in
Section 5.7.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I hereto.
"10% in liquidation amount of the Securities" means, except as
provided in the terms of the Capital Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Capital Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of 10% or more of the aggregate liquidation amount (including the stated
amount that would be paid 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, 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
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
7
<PAGE>
"Trust Property" means (i) the Debentures, (ii) any cash on deposit
in, or owing to, the Institutional Trustee Account and (iii) all proceeds and
rights in respect of the foregoing and any other property and assets for the
time being held by the Institutional Trustee for the Trust pursuant to this
Declaration.
"Underwriting Agreement" means the Underwriting Agreement for the
offering and sale of Capital Securities in the form of Exhibit C.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Institutional 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 Declaration
limits, qualifies or conflicts with the duties imposed by ss.ss. 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities
(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Institutional Trustee (i) within 14 days after each
record date for payment of Distributions, a list, in such form as the
Institutional 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 Regular 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 Institutional
Trustee by the Sponsor and the Regular Trustees on behalf of the Trust, and (ii)
at any other time, within 30 days of receipt by the Trust of a written request
for a List of Holders as of a date no more than 14 days before such List of
Holders is given to the Institutional Trustee. The Institutional Trustee shall
preserve, in as current a form as is reasonably practicable, all information
contained in Lists of Holders given to it or which it receives in the capacity
as Paying
8
<PAGE>
Agent (if acting in such capacity) provided that the Institutional Trustee may
destroy any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Institutional Trustee shall comply with its obligations
under ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee
Within 60 days after May 15 of each year, the Institutional Trustee
shall provide to the Holders of the Capital Securities such reports as are
required by ss. 313 of the Trust Indenture Act, if any, in the form and in the
manner provided by ss. 313 of the Trust Indenture Act. The Institutional Trustee
shall also comply with the requirements of ss. 313(d) of the Trust Indenture
Act.
SECTION 2.4 Periodic Reports to Institutional Trustee
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such documents, reports and
information as required by ss. 314 (if any) and the compliance certificate
required by ss. 314 of the Trust Indenture Act in the form, in the manner and at
the times required by ss. 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in ss. 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to ss.
314(c)(1) of the Trust Indenture Act may be given in the form of an Officers'
Certificate.
SECTION 2.6 Events of Default; Waiver
(a) The Holders of a Majority in liquidation amount of 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
the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debentures (a "Super Majority") to
be waived under the Indenture, the Event of Default under the Declaration
may only be waived by the vote of the Holders of at
9
<PAGE>
least the proportion in 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 ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration 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 Declaration, 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 Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default
under the Declaration as provided below in this Section 2.6(b), the Event
of Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have
waived such Event of Default under the Declaration as provided below in
this Section 2.6(b), the Event of Default under the Declaration may only
be waived by the vote of the Holders of at least the proportion in
liquidation amount of the Common Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences until all Events of Default with respect to the
Capital Securities have been cured, waived or otherwise eliminated, and until
such Events of Default have been so cured, waived or otherwise eliminated, the
Institutional 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 Institutional Trustee in accordance with the
terms of the Securities. The foregoing provisions of this Section 2.6(b) shall
be in lieu of ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act
and such ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are
hereby expressly excluded from this Declaration 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
10
<PAGE>
to have been cured for every purpose of this Declaration, but no such waiver
shall extend to any subsequent or other default or Event of Default 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
Institutional Trustee, at the direction of the Holders of the Capital
Securities, constitutes a waiver of the corresponding Event of Default under
this Declaration. The foregoing provisions of this Section 2.6(c) shall be in
lieu of ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice
(a) The Institutional Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of all defaults with respect
to the Securities actually known to a Responsible Officer of the Institutional
Trustee, unless such defaults have been cured before the giving of such notice
(the term "defaults" for the purposes of this Section 2.7(a) being hereby
defined to be an Event of Default as defined in the Indenture, not including any
periods of grace provided for therein and irrespective of the giving of any
notice provided therein); provided that, except for a default in the payment of
principal of (or premium, if any) or interest on any of the Debentures or in the
payment of any sinking fund installment established for the Debentures, the
Institutional Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Institutional Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities.
(b) The Institutional Trustee shall not be deemed to have knowledge
of any default except:
(i) a default under Sections 5.01(a) and 5.01(b) of the
Indenture; or
(ii) any default as to which the Institutional Trustee shall have
received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration
shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name
The Trust is named "Citicorp Capital III" as such name may be
modified from time to time by the Regular Trustees following written notice to
the Holders of Securities. The Trust's
11
<PAGE>
activities may be conducted under the name of the Trust or any other name deemed
advisable by the Regular Trustees.
SECTION 3.2 Office
The address of the principal office of the Trust is c/o Citicorp,
399 Park Avenue, New York, New York 10043 Attn: Treasurer. On ten Business Days
written notice to the Holders of Securities, the Regular Trustees may designate
another principal office.
SECTION 3.3 Purpose
The exclusive purposes and functions of the Trust are (a) to issue
and sell Securities and use the proceeds from such sale to acquire the
Debentures, and (b) except as otherwise limited herein, to engage in only those
other activities necessary, or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, pledge any of
its assets, or otherwise undertake (or permit to be undertaken) any activity
that would cause the Trust not to be classified for United States federal income
tax purposes as a grantor trust.
SECTION 3.4 Authority
Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional 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 Declaration.
SECTION 3.5 Title to Property of the Trust
Except as provided in Section 3.8 with respect to the Debentures and
the Institutional Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees
The Regular 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
Declaration; provided, however, that the Trust may issue no more than one
series of Capital Securities and
12
<PAGE>
no more than one series of Common Securities, and, provided further, that
there shall be no interests in the Trust other than the Securities, and
the issuance of Securities shall be limited to a simultaneous issuance of
both Capital Securities and Common Securities on each Closing Date;
(b) in connection with the issue and sale of the Capital Securities,
at the direction of the Sponsor, to:
(i) execute and file with the Commission the registration
statement on Form S-3 prepared by the Sponsor, including any
amendments thereto, pertaining to the Capital Securities;
(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, Inc. or any other national
stock exchange or the Nasdaq Stock Market's National Market for
listing upon notice of issuance of any Capital Securities;
(iv) 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
(v) execute and enter into the Underwriting Agreement and
Pricing Agreement providing for the sale of the Capital Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Securities; provided, however, that the Regular Trustees shall cause legal
title to the Debentures to be held of record in the name of the
Institutional Trustee for the benefit of the Holders of the Capital
Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written
notice of the occurrence of a Tax Event or Regulatory Capital Event;
provided that the Regular Trustees shall consult with the Sponsor and the
Institutional Trustee before taking or refraining from taking any
ministerial action in relation to a Tax Event or Regulatory Capital 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 ss. 316(c) of the Trust Indenture
Act, Distributions, voting rights, redemptions and exchanges,
13
<PAGE>
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 Regular 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
Institutional 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 ss. 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses that are necessary or incidental to
carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities or to appoint a Paying Agent for the
Securities as provided in Section 7.2;
(m) to give prompt written notice to the Holders of the Securities
of any notice received from the Debenture Issuer of its election to defer
payments of interest on the Debentures by extending the interest payment
period under the Indenture;
(n) to 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 Declaration or
with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in
14
<PAGE>
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,
provided that such action does not adversely affect the interests of
Holders in any material respect; 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 Regular Trustees, on behalf
of the Trust.
The Regular 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 Regular 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 Regular Trustees shall have none of
the powers or the authority of the Institutional Trustee set forth in Section
3.8.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees
(a) The Trust shall not, and the Trustees (including the
Institutional Trustee) on behalf of the Trust shall not, engage in any activity
other than as required or authorized by this Declaration. In particular, the
Trust shall not and the Trustees (including the Institutional Trustee) shall
cause the Trust not to:
(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 Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided herein;
15
<PAGE>
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness;
(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 Declaration or Annex I, (A)
direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures, (B)
waive any past default that is waivable under the Indenture, (C) exercise
any right to rescind or annul 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 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 not be classified as a grantor trust.
SECTION 3.8 Powers and Duties of the Institutional Trustee
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Institutional Trustee in trust for the benefit of the
Holders of the Securities. The right, title and interest of the Institutional
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Institutional Trustee in accordance with Section 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 Institutional Trustee shall not transfer its right, title
and interest in the Debentures to the Regular Trustees or to the Delaware
Trustee (if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Institutional Trustee Account") in the name of and under the
exclusive control of the Institutional Trustee, except as provided in
Section 7.2 hereof, on behalf of the Holders of the Securities and, upon
the receipt of payments of funds made in respect of the Debentures held by
the Institutional Trustee, deposit such funds into the Institutional
Trustee Account and make payments to the Holders of the Capital Securities
and Holders of the Common Securities from the Institutional Trustee
Account in accordance with Section 6.1. Funds in the Institutional Trustee
Account shall be held uninvested until disbursed in accordance with this
Declaration. The Institutional Trustee Account shall be an account that is
maintained
16
<PAGE>
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 Securities to the extent the
Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by the Regular
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 a Tax Event or a Regulatory Capital Event.
(d) The Institutional Trustee shall take all actions and perform
such duties as may be specifically required of the Institutional Trustee
pursuant to the terms of the Securities.
(e) The Institutional Trustee shall take any Legal Action which
arises out of or in connection with (i) an Event of Default of which a
Responsible Officer of the Institutional Trustee has actual knowledge or (ii)
the Institutional Trustee's duties and obligations under this Declaration or the
Trust Indenture Act, and if such Institutional Trustee shall have 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 a
principal amount of Debentures equal to the liquidation amount of such Capital
Securities, without first proceeding against the Institutional 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 interest or principal on the Debentures on the date such interest or
principal 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 interest then
due on the Debentures having a principal amount equal to the aggregate
liquidation amount of the Capital Securities of such Holder (a "Direct Action")
on or after the respective due date specified in the Debentures. In connection
with such Direct Action, the rights of the Holders of the Common Securities will
be subrogated to the rights of such Holder of Capital Securities to the extent
of any payment made by the Issuer to such Holder 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 Institutional 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 Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.7.
17
<PAGE>
(g) The Institutional 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 Institutional Trustee occurs and is continuing, the Institutional 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 Institutional Trustee shall be authorized to undertake any
actions set forth in ss. 317(a) of the Trust Indenture Act.
(i) Subject to this Section 3.8, the Institutional Trustee shall
have none of the duties, liabilities, powers or the authority of the Regular
Trustees set forth in Section 3.6.
The Institutional 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 Institutional 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 Institutional Trustee
(a) The Institutional 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 Declaration and in the Securities and no implied covenants shall be read
into this Declaration against the Institutional 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 Institutional Trustee has actual
knowledge, the Institutional Trustee shall exercise such of the rights and
powers vested in it by this Declaration, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve
the Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, 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 Institutional Trustee
shall be determined solely by the express provisions of this
Declaration and in the Securities and the Institutional Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Declaration and in
the Securities, and no implied covenants or obligations shall be
read into this Declaration against the Institutional Trustee; and
18
<PAGE>
(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional 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 Institutional Trustee and conforming to the
requirements of this Declaration; 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
Institutional Trustee, the Institutional Trustee shall be under a
duty to examine the same to determine whether or not they conform to
the requirements of this Declaration;
(ii) the Institutional Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in
liquidation amount of the Outstanding Capital Securities relating to the
time, method and place of conducting any proceeding for any remedy
available to the Institutional Trustee, or exercising any trust or power
conferred upon the Institutional Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional 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 indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Institutional Trustee Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals with similar property
for its own account, subject to the protections and limitations on
liability afforded to the Institutional Trustee under this Declaration and
the Trust Indenture Act and, to the extent applicable, Rule 3a-7 under the
Investment Company Act;
(vi) the Institutional Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Institutional Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree in writing
with the Sponsor. Money held by the Institutional Trustee need not be
segregated from other funds held by it except in relation to the
Institutional Trustee Account maintained by the Institutional Trustee
pursuant to Section 3.8(c)(i) and except to the extent otherwise required
by law; and
19
<PAGE>
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for any default or misconduct of the
Regular Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Institutional Trustee
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Institutional 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 Institutional Trustee shall have the
right at any time to seek instructions concerning the administration of
this Declaration from any court of competent jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of any Holder, unless such Holder shall have
provided to the Institutional Trustee security and indemnity, reasonably
satisfactory to the Institutional Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Institutional Trustee's agents, nominees
20
<PAGE>
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 Institutional Trustee provided, that, nothing
contained in this Section 3.10(a)(vi) shall be taken to relieve the
Institutional Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this
Declaration;
(vii) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Institutional Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Institutional
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 Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Institutional Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Institutional
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Institutional Trustee's or its agent's taking such
action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Institutional Trustee (i) may request instructions from the
Holders of the 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 Institutional 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 or accordance with such instructions;
(xi) except as otherwise expressly provided by this Declaration, the
Institutional Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration;
(xii) the Institutional Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Declaration; and
(xiii) if (A) in performing its duties under this Declaration the
Institutional Trustee is required to decide between alternative courses of
action or (B) in construing any of the provisions in this Declaration, the
Institutional Trustee finds the same ambiguous or same
21
<PAGE>
inconsistent with any other provisions contained herein or (C) the
Institutional Trustee is unsure of the application of any provision of
this Declaration, then, except as to any matter as to which the Capital
Securities Holders are entitled to vote under the terms of this
Declaration, the Institutional Trustee shall deliver a notice to the
Sponsor requesting written instructions of the Sponsor as to the course of
action to be taken. The Institutional Trustee shall take such action, or
refrain from taking such action, as the Institutional Trustee shall be
instructed in writing to take, or to refrain from taking, by the Sponsor
and shall be fully and conclusively protected in taking or refraining from
taking such action as so instructed; provided, however, that the
Institutional Trustee shall be under no duty to take any action unless and
until so instructed by the Sponsor; and provided, further, that if the
Institutional Trustee does not receive such instructions of the Sponsor
within ten Business Days after it has delivered such notice, or such
reasonably shorter period of time set forth in such notice (which to the
extent practicable shall not be fewer than two Business days), it may, but
shall be under no duty to, take or refrain from taking any such action not
inconsistent with this Declaration as it shall deem advisable and in the
best interest of the Securities Holders, in which event the Institutional
Trustee shall have no liability except for its own bad faith, negligence
or willful misconduct.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Institutional Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee
Notwithstanding any other provision of this Declaration 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 Regular Trustees or the Institutional Trustee described in this Declaration.
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 ss.3807 of the
Business Trust Act.
SECTION 3.12 Execution of Documents
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, any Regular Trustee is authorized
to execute on behalf of the Trust any documents that the Regular Trustees have
the power and authority to execute pursuant to Section 3.6; provided that, the
registration statement referred to in Section 3.6(b)(i), including any
amendments thereto, shall be signed by a majority of or, if there are less than
three, all of the Regular Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities
22
<PAGE>
The recitals contained in this Declaration and the Securities shall
be taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust
The Trust, unless terminated pursuant to the provisions of Article
VIII hereof, shall dissolve on August 15, 2053.
SECTION 3.15 Mergers
(a) The Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the
Institutional Trustee, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any State; provided
that:
(i) if the Trust is not the surviving entity, such successor entity
(the "Successor Entity") either:
(A) expressly assumes all of the obligations of the
Trust under the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Securities (the "Successor
Securities") so long as the Successor Securities rank the same as
the Securities rank with respect to Distributions and payments upon
liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the holder of the Debentures;
(iii) the Capital Securities or any Successor Securities are listed
or quoted, or any Successor Securities will be so upon notice of issuance,
on any national securities exchange or other organization on which the
Capital Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement does
not cause the Capital Securities (including any Successor Securities) to
be downgraded by any nationally recognized statistical rating
organization;
23
<PAGE>
(v) such merger, consolidation, amalgamation or replacement 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 such Holders'
interests in the new entity);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of counsel to the Trust
to the effect that:
(A) such merger, consolidation, amalgamation or replacement
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, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company;
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes; and
(viii) the Sponsor 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 amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger or replacement would
cause the Trust or the Successor Entity to be classified as other than a grantor
trust for United States federal income tax purposes.
SECTION 3.16 Limitation to Trust Property
All payments made by the Institutional Trustee or a Paying Agent in
respect of the Securities shall be made only from the income and proceeds from
the Trust Property and only to the extent that there shall be sufficient income
or proceeds from the Trust Property to enable the Institutional Trustee or
Paying Agent to make payments in accordance with the terms hereof. Each Holder,
by its acceptance of a Security, agrees that it will look solely to the income
and proceeds from the Trust Property to the extent available for distribution to
it as herein provided and that the Trustees shall not be personally liable to it
for any amount distributable in respect of any Security
24
<PAGE>
or for any other liability in respect of any Security; provided that this
Section 3.16 does not limit the liability of the Trustees expressly set forth
elsewhere in this Declaration or, in the case of the Institutional Trustee, in
the Trust Indenture Act.
SECTION 3.17 Compensation and Fees
(a) The Sponsor agrees:
(i) to pay the Institutional Trustee from time to time compensation
for all services rendered by the Institutional Trustee hereunder in
accordance with a separate fee agreement between the Sponsor and the
Institutional Trustee (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust); and
(ii) except as otherwise expressly provided herein, to reimburse the
Institutional Trustee upon request for all reasonable expenses,
disbursements and advances reasonably incurred or made by the
Institutional Trustee in accordance with any provision of this Declaration
(including the reasonable compensation and the expenses and disbursements
of its agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence, bad faith or willful
misconduct.
(b) The provisions of this Section shall survive the termination of
this Declaration.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities
On the Closing Date, the Sponsor will purchase all of the Common
Securities issued by the Trust at the same time as the Capital Securities are
sold.
SECTION 4.2 Responsibilities of the Sponsor
In connection with the issue and sale of the Capital Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Capital Securities,
including any amendments thereto;
(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
25
<PAGE>
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) to prepare for filing by the Trust an application to the New
York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Capital
Securities;
(d) 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 thereto; and
(e) to negotiate the terms of the Underwriting Agreement and Pricing
Agreement providing for the sale of the Capital Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees
The number of Trustees initially shall be three (3), and:
(a) at any time before the issuance of any Securities, the
Sponsor may, by written instrument, increase or decrease the number of
Trustees; and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a majority in
liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities; provided, however, that, the
number of Trustees shall in no event be less than two (2); provided
further that (1) one Trustee shall be the Delaware Trustee; (2) there
shall be at least one Trustee who is an employee or officer of, or is
affiliated with the Sponsor (a "Regular Trustee"); and (3) one Trustee
shall be the Institutional Trustee for so long as this Declaration 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.
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
26
<PAGE>
(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 Institutional Trustee has its principal place of business
in the State of Delaware and otherwise meets the requirements of applicable law,
then the Institutional Trustee shall also be the Delaware Trustee and Section
3.11 shall have no application.
SECTION 5.3 Institutional Trustee; Eligibility
(a) There shall at all times be one Trustee which shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a financial institution 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 Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in Section
5.7(c).
(c) If the Institutional Trustee has or shall acquire any
"conflicting interest" within the meaning of ss. 310(b) of the Trust Indenture
Act, the Institutional Trustee and the Holder of the Common Securities (as if it
were the obligor referred to in ss. 310(b) of the Trust Indenture Act) shall in
all respects comply with the provisions of ss. 310(b) of the Trust Indenture
Act.
(d) The Capital Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be:
Wilmington Trust Company
SECTION 5.4 Certain Qualifications of Regular Trustees and Delaware Trustee
Generally.
27
<PAGE>
Each Regular Trustee and the Delaware Trustee (unless the
Institutional 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 Regular Trustees
The Regular Trustees shall be:
Peter Gallant
John F. Rice
(a) Except as expressly set forth in this Declaration and except if
a meeting of the Regular Trustees is called with respect to any matter over
which the Regular Trustees have power to act, any power of the Regular Trustees
may be exercised by, or with the consent of, any one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and except
as otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, the registration statement referred to
in Section 3.6, including any amendments thereto, shall be signed by a majority
of or, if there are less than three, all of the Regular Trustees; and
(c) a Regular 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 Regular Trustees
have power and authority to cause the Trust to execute pursuant to Section 3.6.
SECTION 5.6 Delaware Trustee.
The initial Delaware Trustee shall be:
Wilmington Trust Company
SECTION 5.7 Appointment, Removal and Resignation of Trustees
(a) Subject to Section 5.7(b), Trustees may be appointed or removed
without cause at any time except during an Event of Default:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
28
<PAGE>
(ii) 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.
(b) (i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.7(a) until a successor Trustee possessing
the qualifications to act as Institutional Trustee under Section 5.3 (a
"Successor Institutional Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Institutional
Trustee and delivered to the Regular 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 Trustee
possessing the qualifications to act as Delaware Trustee under Sections
5.2 and 5.4 (a "Successor Delaware Trustee") has been appointed and has
accepted such appointment by written instrument executed by such Successor
Delaware Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided, however,
that:
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been
appointed and has accepted such appointment by instrument executed
by such Successor Institutional Trustee and delivered to the Trust,
the Sponsor and the resigning Institutional Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the 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
Institutional Trustee as the case may be if the Institutional Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance with this
Section 5.7.
29
<PAGE>
(e) If no Successor Institutional Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.7 within 60 days after delivery of an instrument of resignation or
removal, the Institutional Trustee or Delaware Trustee resigning or being
removed, as applicable, may petition any court of competent jurisdiction for
appointment of a Successor Institutional Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper and prescribe, appoint a Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable for
the acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
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 Regular Trustees or, if there
are more than two, a majority of the Regular 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 Regular Trustees shall occur, until such vacancy is filled by the appointment
of a Regular Trustee in accordance with Section 5.7, the Regular Trustees in
office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
SECTION 5.10 Meetings
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
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 a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular 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.
30
<PAGE>
Unless provided otherwise in this Declaration, any action of the Regular
Trustees may be taken at a meeting by vote of a majority of the Regular 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 Regular Trustees. In the event there is only
one Regular Trustee, any and all action of such Regular Trustee shall be
evidenced by a written consent of such Regular Trustee.
SECTION 5.11 Delegation of Power
(a) Any Regular 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 Regular 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 Regular Trustees or otherwise as the Regular 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 the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
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.
SECTION 5.13 Co-Trustees and Separate Trustee
(a) Unless an Event of Default shall have occurred and be
continuing, at any time or times for the purpose of meeting the legal
requirements of the Trust Indenture Act or of any jurisdiction in which any part
of the Trust Property may at the time be located, the Sponsor and the
Institutional Trustee shall have power to appoint, and upon the written request
of the Institutional Trustee, the Sponsor shall for such purpose join with the
Institutional Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to appoint, one or more Persons
approved by the Institutional Trustee either to act as co-trustee, jointly with
the Institutional Trustee, of all or any part of such Trust 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 the capacity aforesaid, any property, title, right or power deemed
31
<PAGE>
necessary or desirable, subject to the other provisions of this Section 5.13. If
the Sponsor does not join in such appointment within 15 days after the receipt
by it of a request so to do, or in case of an Event of Default has occurred and
is continuing, the Institutional Trustee alone shall have power to make such
appointment.
(b) Should any written instrument from the Sponsor be required by
any co-trustee or separate trustee so appointed for more fully confirming to
such co-trustee or separate trustee such property, title, right, or power, any
and all such instruments shall, on request, be executed, acknowledged and
delivered by the Sponsor.
(c) Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the following
terms, namely:
(i) The Securities shall be executed and delivered and all rights,
powers, duties and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustees designated for such purpose
hereunder, shall be exercised, solely by such Trustees.
(ii) The rights, powers, duties and obligations hereby conferred or
imposed upon the Institutional Trustee in respect of any property covered
by such appointment shall be conferred or imposed upon and exercised or
performed by the Institutional Trustee or by the Institutional Trustee and
such co-trustee or separate trustee jointly, as shall be provided in the
instrument appointing such co-trustee or separate trustee, except to the
extent that under any law of any jurisdiction in which any particular act
is to be performed, the Institutional Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers,
duties and obligations shall be exercised and performed by such co-trustee
or separate trustee.
(iii) The Institutional Trustee at any time, by an instrument in
writing executed by it, with the written concurrence of the Sponsor, may
accept the resignation of or remove any co-trustee or separate trustee
appointed under this Section 5.13, and, in case an Event of Default has
occurred and is continuing, the Institutional Trustee shall have power to
accept the resignation of, or remove, any such co-trustee or separate
trustee without the concurrence of the Sponsor. Upon the written request
of the Institutional Trustee, the Sponsor shall join with the
Institutional Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate trustee
so resigned or removed may be appointed in the manner provided in this
Section 5.13.
(iv) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Institutional Trustee.
(v) The Institutional Trustee shall not be liable by reason of any
act or omission of a co-trustee or separate trustee.
32
<PAGE>
(vi) Any Act of Holders delivered to the Institutional Trustee shall
be deemed to have been delivered to each such co-trustee and separate
trustee.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions
Holders shall receive Distributions (as defined herein) in
accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Capital Securities and the Common Securities
in accordance with the preferences set forth in their respective terms. If and
to the extent that the Debenture Issuer makes a payment of interest (including
Compounded Interest (as defined in the Indenture) and Additional Interest),
premium and/or principal on the Debentures held by the Institutional Trustee
(the amount of any such payment being a "Payment Amount"), the Institutional
Trustee shall and is directed, to the extent funds are available for that
purpose, to make a distribution (a "Distribution") of the Payment Amount to
Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities
(a) The Regular 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 "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 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 Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual or facsimile signature of
any present or any future Regular Trustee. In case any Regular Trustee of the
Trust who shall have signed any of the Securities shall cease to be such Regular
Trustee before the Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the person who signed such
Certificates had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Regular Trustees of the Trust, although
at the date of the execution and delivery of the Declaration any such person was
not such a Regular Trustee. Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as
33
<PAGE>
may be required to comply with any law or with any rule or regulation of any
stock exchange on which Securities may be listed, or to conform to usage.
(c) A Security shall not be valid until authenticated by the manual
signature of an authorized signatory of the Institutional Trustee. The signature
shall be conclusive evidence that the Security has been authenticated under this
Declaration.
The Institutional Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Securities. An authenticating agent may
authenticate Securities whenever the Institutional Trustee may do so. Each
reference in this Declaration to authentication by the Institutional Trustee
includes authentication by such agent. An authenticating agent has the same
rights as the Institutional Trustee to deal with the Sponsor or an Affiliate.
(d) 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.
(e) Upon issuance of the Securities as provided in this Declaration
and the receipt of the consideration therefor, the Securities so issued shall be
deemed to be validly issued, fully paid and non-assessable.
(f) Every Person, by virtue of having become a Holder or a Capital
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
SECTION 7.2 Paying Agent
The Trust shall appoint an agent (the "Paying Agent"), which shall
initially be Citibank, N.A., which shall make Distributions to the Securities
Holders from the Institutional Trustee Account and shall report the amounts of
such Distributions to the Regular Trustees and the Institutional Trustee. Any
Paying Agent shall have the revocable power to withdraw funds from the
Institutional Trustee Account for the purpose of making the Distributions. The
Institutional Trustee shall be entitled to rely upon a certificate of the Paying
Agent stating the amount of such funds so to be withdrawn and that the same are
to be applied by the Paying Agent in accordance with this Section 7.2. The
Regular Trustees may revoke such power and remove the Paying Agent in their sole
discretion. The Paying Agent may choose any co-paying agent that is acceptable
to the Regular Trustees. The Paying Agent shall be permitted to resign upon 30
days' notice to the Regular Trustees. In the event of the removal or resignation
of the Paying Agent, the Regular Trustees shall appoint a successor that is
reasonably acceptable to the Institutional Trustee to act as Paying Agent (which
shall be a bank, trust company or an Affiliate of the Sponsor). The Regular
Trustee shall cause such successor Paying Agent or any additional Paying Agent
appointed to execute and deliver to the Trustees an instrument in which such
Paying Agent or additional Paying Agent shall agree with the Trustees that as
Paying Agent, such successor Paying Agent or additional Paying Agent will hold
all sums, if any, held by it for payment to the Securities Holders in trust for
the benefit of the Securities Holders entitled thereto until such sums shall be
paid to such Securities Holders. The
34
<PAGE>
Paying Agent shall return all unclaimed funds to the Institutional Trustee and
upon resignation or removal of a Paying Agent such Paying Agent also shall
return all funds in its possession to the Institutional Trustee. The provisions
of Sections 3.8(d), 3.9, 3.10 and 3.17 shall apply to the Paying Agent appointed
hereunder, and the Paying Agent shall be bound by the requirements with respect
to paying agents of securities issued pursuant to the Trust Indenture Act. Any
reference in this Declaration to the Paying Agent shall include any co-paying
agent unless the context requires otherwise.
ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
SECTION 8.1 Dissolution and Termination of Trust
(a) The Trust shall dissolve:
(i) on August 15, 2053, the expiration term of the Trust;
(ii) upon the bankruptcy of the Sponsor;
(iii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor; the consent of at least a majority
in liquidation amount of the Securities affected thereby voting together
as a single class to file a certificate of cancellation with respect to
the Trust or the revocation of the Sponsor's charter and the expiration of
90 days after the date of revocation without a reinstatement thereof;
(iv) upon Citicorp, as Sponsor, giving written direction to the
Institutional Trustee to terminate the Trust and distribute the
Subordinated Debt Securities to the holders of Capital Securities and
Common Securities (which direction is optional and wholly within the
discretion of Citicorp as Sponsor);
(v) upon the entry of a decree of judicial dissolution of the Holder
of the Common Securities, the Sponsor or the Trust;
(vi) 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;
or
(vii) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), and upon the completion of the winding up of the
Trust, one of the Trustees (each
35
<PAGE>
of whom is hereby authorized to take such action) shall file a certificate of
cancellation with the Secretary of State of the State of Delaware terminating
the Trust.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Capital Securities shall be freely
transferable.
(c) The Sponsor may not transfer the Common Securities.
SECTION 9.2 Transfer of Certificates
(a) The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Trust or the Sponsor
may reasonably require) in respect of any tax or other government charges that
may be imposed in relation to it. Upon surrender for registration of transfer of
any Certificate, the Regular Trustees shall cause one or more new Certificates
to be issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration.
(b) Upon receipt by the Institutional Trustee of a Definitive
Capital Security Certificate, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Institutional Trustee,
requesting transfer of such Definitive Capital Security Certificate for a
beneficial interest in a Global Certificate, the Institutional Trustee shall
36
<PAGE>
cancel such Definitive Capital Security Certificate and cause, or direct the
Clearing Agency to cause, the aggregate number of Capital Securities represented
by the appropriate Global Certificate to be increased accordingly. If no Global
Certificates are then outstanding, the Trust shall issue and the Institutional
Trustee shall authenticate, upon written order of any Regular Trustee, an
appropriate number of Capital Securities in global form.
(c) Upon receipt by the Institutional Trustee from the Clearing
Agency or its nominee on behalf of any Person having a beneficial interest in a
Global Certificate of written instructions or such other form of instructions as
is customary for the Clearing Agency or the person designated by the Clearing
Agency, requesting transfer of a beneficial interest in a Global Certificate for
a Definitive Capital Security Certificate, then the Institutional Trustee or the
securities custodian, at the direction of the Institutional Trustee, will cause,
in accordance with the standing instructions and procedures existing between the
Clearing Agency and the securities custodian, the aggregate principal amount of
the Global Certificate to be reduced on its books and records and, following
such reduction, the Trust will execute and the Institutional Trustee will
authenticate and deliver to the transferee a Definitive Capital Security
Certificate.
Definitive Capital Security Certificates issued in exchange for a
beneficial interest in a Global Certificate shall be registered in such names
and in such authorized denominations as the Clearing Agency, pursuant to
instructions from its Clearing Agency Participants or indirect participants or
otherwise, shall instruct the Institutional Trustee. The Institutional Trustee
shall deliver such Capital Securities to the persons in whose names such Capital
Securities are so registered in accordance with the instructions of the Clearing
Agency.
(d) Notwithstanding any other provisions of this Declaration, a
Global Certificate 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.
SECTION 9.3 Deemed Security Holders
The Trustees may treat the Person in whose name any Certificate
shall be registered on the books and records of the Trust as the sole holder of
such Certificate and of the Securities represented by such Certificate 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 Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 9.4 Book Entry Interests
Unless otherwise specified in the terms of the Capital Securities,
the Capital Securities Certificates, on original issuance, will be issued in the
form of one or more, fully registered, global Capital Security Certificates
(each a "Global Certificate"), to be delivered to DTC, the initial Clearing
Agency, by, or on behalf of, the Trust. Such Global Certificates shall initially
37
<PAGE>
be registered on the books and records of the Trust in the name of Cede & Co.,
the nominee of DTC, and no Capital Security Beneficial Owner will receive a
definitive Capital Security Certificate representing such Capital Security
Beneficial Owner's interests in such Global Certificates, except as provided in
Section 9.7. Unless and until definitive, fully registered Capital Security
Certificates (the "Definitive Capital Security Certificates") have been issued
to the Capital Security Beneficial Owners pursuant to Section 9.7:
(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 Declaration (including the
payment of Distributions on the Global Certificates 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 Capital Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the Capital Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Capital Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants and
receive and transmit payments of Distributions on the Global Certificates
to such Clearing Agency Participants. DTC will make book entry transfers
among the Clearing Agency Participants.
Clearing Agency Participants shall have no rights under this
Declaration with respect to any Global Certificate held on their behalf by the
Clearing Agency or by the Institutional Trustee as the custodian of the Clearing
Agency or under such Global Certificate, and the Clearing Agency may be treated
by the Trust, the Institutional Trustee and any agent of the Trust or the
Institutional Trustee as the absolute owner of such Global Certificate for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Trust, the Institutional Trustee or any agent of the Trust or the
Institutional 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 Clearing Agency Participants, the operation of customary
practices of such Clearing Agency governing the exercise of the rights of a
holder of a beneficial interest in any Global Certificate.
At such time as all beneficial interests in a Global Certificate
have either been exchanged for Definitive Capital Security Certificates to the
extent permitted by this Declaration or redeemed, repurchased or canceled in
accordance with the terms of this Declaration, such Global Certificate shall be
returned to the Clearing Agency for cancellation or retained and canceled by the
Institutional Trustee. At any time prior to such cancellation, if any beneficial
interest in a Global Certificate is exchanged for Definitive Capital Security
Certificates, or if Definitive Capital Security Certificates are exchanged for a
beneficial interest in a Global Certificate, Capital Securities
38
<PAGE>
represented by such Global Certificate shall be reduced or increased and an
adjustment shall be made on the books and records of the Institutional Trustee
(if it is then the securities custodian for such Global Certificate) with
respect to such Global Certificate, by the Institutional Trustee or the
securities custodian, to reflect such reduction or increase.
SECTION 9.5 Notices to Clearing Agency
Whenever a notice or other communication to the Capital Security
Holders is required under this Declaration, unless and until Definitive Capital
Security Certificates shall have been issued to the Capital Security Beneficial
Owners pursuant to Section 9.7, the Regular Trustees shall give all such notices
and communications specified herein to be given to the Capital Security Holders
to the Clearing Agency, and shall have no notice obligations to the Capital
Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Capital Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to such Capital Securities.
. CTION 9.7 Definitive Capital Security Certificates
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Capital Securities and a
successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor
to terminate the book entry system through the Clearing Agency with
respect to the Capital Securities,
then:
(c) Definitive Capital Security Certificates shall be prepared by
the Regular Trustees on behalf of the Trust with respect to such Capital
Securities; and
(d) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees
shall cause Definitive Capital Security Certificates to be delivered to
Capital Security Beneficial Owners in accordance with the instructions of
the Clearing Agency. Neither the Trustees nor the Trust shall be liable
for any delay in delivery of such instructions and each of them may
conclusively rely on and shall be protected in relying on, said
instructions of the Clearing Agency. The Definitive Capital Security
Certificates shall be printed, lithographed or engraved or may be produced
in any other manner as is reasonably acceptable to the Regular Trustees,
as
39
<PAGE>
evidenced by their execution thereof, and may have such letters, numbers
or other marks of identification or designation and such legends or
endorsements as the Regular Trustees may deem appropriate, or as may be
required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on
which Capital Securities may be listed, or to conform to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them harmless,
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Regular Trustee on behalf of the Trust shall execute
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 9.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability
(a) Except as expressly set forth in this Declaration, the
Securities Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon dissolution of the Trust or otherwise.
40
<PAGE>
(b) The Debenture Issuer 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 ss. 3803(a) of the Business Trust Act, the Holders
of the Securities shall be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration 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
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between
any Covered Persons; or
41
<PAGE>
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a
manner that is, or provides terms that are, fair and reasonable to the
Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration 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 Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no duty
or obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
. TION 10.4 Indemnification
(a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees and expenses), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the Company
Indemnified Person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
42
<PAGE>
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in
its favor by reason of the fact that he is or was a Company Indemnified
Person against expenses (including attorneys' fees and expenses) actually
and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the Trust and except that no such indemnification shall be
made in respect of any claim, issue or matter as to which such Company
Indemnified Person shall have been adjudged to be liable to the Trust
unless and only to the extent that the Court of Chancery of Delaware or
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such Court of Chancery or
such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full
extent permitted by law, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Debenture
Issuer 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 Regular Trustees by a majority vote of a quorum consisting of such
Regular 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 Regular Trustees so directs, by independent legal
counsel in a written opinion, or (3) by the Common Security Holder of the
Trust.
(v) Expenses (including attorneys' fees and expenses) incurred by a
Company Indemnified Person in defending a civil, criminal, administrative
or investigative action, suit or proceeding referred to in paragraphs (i)
and (ii) of this Section 10.4(a) shall be paid by the Debenture Issuer 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 Debenture Issuer as authorized in
this Section 10.4(a). Notwithstanding the foregoing, no advance shall be
made by the Debenture Issuer if a determination is reasonably and promptly
made (i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion or (iii) by the
Debenture Issuer that, based upon the facts known to the Regular Trustees,
43
<PAGE>
counsel or the Debenture Issuer at the time such determination is made,
such Company Indemnified Person acted in bad faith or in a manner that
such person did not believe to be in or not opposed to the best interests
of the Trust, or, with respect to any criminal proceeding, that such
Company Indemnified Person believed or had reasonable cause to believe his
conduct was unlawful. In no event shall any advance be made in instances
where the Regular Trustees, independent legal counsel or Debenture Issuer
reasonably determine that such person deliberately breached his duty to
the Trust or its Common or Capital Security Holders.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall
not be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the
Debenture Issuer or Capital Security Holders of the Trust or otherwise,
both as to action in his official capacity and as to action in another
capacity while holding such office. All rights to indemnification under
this Section 10.4(a) shall be deemed to be provided by a contract between
the Debenture Issuer 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 Debenture Issuer 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 Debenture Issuer would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity,
any constituent entity (including any constituent of a constituent)
absorbed in a consolidation or merger, so that any person who is or was a
director, trustee, officer or employee of such constituent entity, or is
or was serving at the request of such constituent entity as a director,
trustee, officer, employee or agent of another entity, shall stand in the
same position under the provisions of this Section 10.4(a) with respect to
the resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be
a Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Debenture Issuer agrees to indemnify the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Institutional
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee and the Delaware Trustee (each
of the Persons in (i)
44
<PAGE>
through (iv) being referred to as a "Fiduciary Indemnified Person") for, and to
hold each Fiduciary Indemnified Person harmless against, any and all loss,
liability, damage, claim or expense including taxes (other than taxes based on
the income of such Fiduciary Indemnified Person) incurred without negligence or
bad faith on its part, arising out of or in connection with the acceptance or
administration or 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 Declaration.
SECTION 10.5 Outside Businesses
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional 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 Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Sponsor, the Delaware Trustee and the Institutional
Trustee shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular investment
or other opportunity. Any Covered Person, the Delaware Trustee and the
Institutional Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor, or may act as
depositary for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or its Affiliates.
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 Regular
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,
45
<PAGE>
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes.
(b) The Regular 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 Regular Trustees shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
(c) The Regular 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 Regular Trustees on behalf of the Trust with any state or local taxing
authority.
SECTION 11.3 Banking
The Trust shall maintain one or more bank accounts in the name and
for the sole benefit of the Trust; provided, however, that all payments of funds
in respect of the Debentures held by the Institutional Trustee shall be made
directly to the Institutional Trustee Account and no other funds of the Trust
shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by the Regular Trustees; provided,
however, that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.
SECTION 11.4 Withholding
The Trust and the Regular 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 Regular 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.
46
<PAGE>
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two
Regular Trustees, a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the Institutional
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment
shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the Institutional
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 Declaration (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 Institutional
Trustee, the Institutional Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities);
and
(B) an opinion of counsel (who may be counsel to the Sponsor
or the Trust) that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the
Securities); and
(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
Institutional Trustee in contravention of the Trust Indenture Act;
or
47
<PAGE>
(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;
(e) Article IV 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
V 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) Sections 12.1(a)(ii) and 12.1(b) shall not be amended without
the consent of the Institutional Trustee and Section 12.1(a)(iii) shall not be
amended without the consent of the Delaware Trustee; and
(h) notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor, provided such amendment does not have a material adverse effect
on the rights, preferences or privileges of the Holders;
(iv) to conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the rights, preferences or privileges of the
Holders; and
(v) to modify, eliminate or add to any provision of the Declaration
to such extent as may be necessary to eliminate or reduce the adverse
effects resulting from the occurrence of a Tax Event or Regulatory Capital
Event, provided such amendment does not have a material adverse effect on
the rights, preferences or privileges of the Holders.
48
<PAGE>
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 Regular 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 Declaration, the terms of
the Securities or the rules of any stock exchange on which the Capital
Securities are listed or admitted for trading. The Regular Trustees shall call a
meeting of the Holders of such class if directed to do so by the Holders of at
least 10% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing the
Security Certificates held by the Holders of Securities exercising the right to
call a meeting and only those Securities specified shall be counted for purposes
of determining whether the required percentage set forth in the second sentence
of this paragraph has been met.
(b) 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
Declaration 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 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 Regular 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 Regular
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
49
<PAGE>
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 Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Capital Securities are then listed or trading,
otherwise provides, the Regular 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 INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional Trustee
The Trustee that acts as initial Institutional Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Institutional Trustee represents and warrants to the Trust
and the Sponsor at the time of the Successor Institutional Trustee's acceptance
of its appointment as Institutional Trustee that:
(a) the Institutional Trustee is a Delaware banking corporation with
trust powers and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Declaration;
(b) the execution, delivery and performance by the Institutional
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the part of the Institutional Trustee. The Declaration
has been duly executed and delivered by the Institutional Trustee, and it
constitutes a legal, valid and binding obligation of the Institutional
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other
similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in
equity or at law);
(c) the execution, delivery and performance of this Declaration by
the Institutional Trustee does not conflict with or constitute a breach of
the charter or by-laws of the Institutional Trustee; and
50
<PAGE>
(d) no consent, approval or authorization of, or registration with
or notice to, any Delaware State or federal banking authority is required
for the execution, delivery or performance by the Institutional Trustee,
of this Declaration.
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 Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) 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 Declaration.
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The
Declaration under Delaware law 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) No consent, approval or authorization of, or registration with
or notice to, any federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee, of this Declaration.
(d) 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.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices
All notices provided for in this Declaration shall be in writing,
duly signed by the party giving such notice, and shall be delivered, telecopied
or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular 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):
51
<PAGE>
Citicorp Capital III
c/o Citicorp
399 Park Avenue
New York, New York 10043
Attention: Treasurer
Telecopy: (212) 527-2765
(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):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Department
Telecopy: (302) 651-1576
(c) if given to the Institutional Trustee, at the Institutional
Trustee's mailing address set forth below (or such other address as the
Institutional Trustee may give notice of to the Holders of the
Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Trustee
Administration
Telecopy: (302) 651-1576
(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):
Citicorp
399 Park Avenue
New York, New York 10043
Attention: Treasurer
(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
52
<PAGE>
which no notice was given, such notice or other document shall be deemed to have
been delivered on the date of such refusal or inability to deliver.
SECTION 14.2 Governing Law
This Declaration 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 the
principles of conflict of laws of the State of Delaware or any other
jurisdiction that would call for the application of the law of any jurisdiction
other than the State of Delaware; provided, however, that there shall not be
applicable to the Trust, the Trustees or this Declaration any provision of the
laws (statutory or common) of the State of Delaware pertaining to trusts that
relate to or regulate, in a manner inconsistent with the terms hereof (a) the
filing with any court or governmental body or agency of trustee accounts or
schedules of trustee fees and charges, (b) affirmative requirements to post
bonds for trustees, officers, agents or employees of a trust, (c) the necessity
for obtaining court or other governmental approval concerning the acquisition,
holding or disposition of real or personal property, (d) fees or other sums
payable to trustees, officers, agents or employees of a trust, (e) the
allocation of receipts and expenditures to income or principal, (f) restrictions
or limitations on the permissible nature, amount or concentration of trust
investments or requirements relating to the titling, storage or other manner of
holding or investing trust assets or (g) the establishment of fiduciary or other
standards of responsibility or limitations on the acts or powers of trustees
that are inconsistent with the limitations or liabilities or authorities and
powers of the Trustees as set forth or referenced in this Declaration. Section
3540 of Title 12 of the Delaware Code shall not apply to the Trust.
SECTION 14.3 Intention of the Parties
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 14.4 Headings
Headings contained in this Declaration are inserted for convenience
of reference only and do not affect the interpretation of this Declaration or
any provision hereof.
SECTION 14.5 Successors and Assigns
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability
53
<PAGE>
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts
This Declaration may contain more than one counterpart of the
signature page and this Declaration 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.
IN WITNESS WHEREOF, the undersigned has caused these presents to
be executed as of the day and year first above written.
/s/ Peter Gallant
----------------------------------
Peter Gallant, as Regular Trustee
/s/ John F. Rice
----------------------------------
John F. Rice, as Regular Trustee
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By: /s/ Jill K. Morrison
Name: Jill K. Morrison
Title: Administrative Account Manager
WILMINGTON TRUST COMPANY,
as Institutional Trustee
By: /s/ Jill K. Morrison
Name: Jill K. Morrison
Title: Administrative Account Manager
CITICORP,
as Sponsor
By: /s/ John F. Rice
-----------------------------------
Name: John F. Rice
Title: Vice President
54
<PAGE>
ANNEX I
TERMS OF
7.10% CAPITAL SECURITIES
7.10% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of June 26, 1998 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Capital Securities ("Capital Securities"
or "Capital Securities") and the Common Securities are set out below (each
capitalized term used but not defined herein has the meaning set forth in the
Declaration or, if not defined in such Declaration, as defined in the Prospectus
referred to below):
1. Designation and Number.
(a) Capital Securities. 9,000,000 Capital Securities of the Trust
with an aggregate liquidation amount with respect to the assets of the Trust of
two hundred twenty-five million dollars ($225,000,000) and a liquidation amount
with respect to the assets of the Trust of $25 per capital security, are hereby
designated for the purposes of identification only as "7.10% Capital Securities"
(the "Capital Securities"). The Capital Security Certificates evidencing the
Capital Securities shall be substantially in the form of Exhibit A-1 to the
Declaration, with such changes and additions thereto or deletions therefrom as
may be required by ordinary usage, custom or practice or to conform to the rules
of any stock exchange on which the Capital Securities are listed.
(b) Common Securities. 270,000 Common Securities of the Trust with
an aggregate liquidation amount with respect to the assets of the Trust of six
million seven hundred fifty thousand dollars ($6,750,000) and a liquidation
amount with respect to the assets of the Trust of $25 per common security, are
hereby designated for the purposes of identification only as "7.10% Common
Securities" (the "Common Securities"). The Common Security Certificates
evidencing the Common Securities shall be substantially in the form of Exhibit
A-2 to the Declaration, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate
per annum of 7.10% (the "Coupon Rate") of the stated liquidation amount of $25
per Security, such rate being the rate of interest payable on the Debentures to
be held by the Institutional Trustee. Distributions in arrears for more than one
quarterly Distribution period will bear additional distributions thereon
compounded quarterly at the Coupon Rate (to the extent permitted by applicable
law). The term "Distributions" as used herein includes such cash distributions
and any such additional distributions
I-1
<PAGE>
payable unless otherwise stated. A Distribution is payable only to the extent
that payments are made in respect of the Debentures held by the Institutional
Trustee and to the extent the Institutional Trustee has funds available
therefor. The amount of Distributions payable for any period will be computed
for any full quarterly Distribution period on the basis of a 360-day year of
twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 90-day quarterly
Distribution period.
(b) Distributions on the Securities will be cumulative, will accrue
from June 26, 1998, and will be payable quarterly in arrears, on February 15,
May 15, August 15 and November 15 of each year, commencing on August 15, 1998,
except as otherwise described below. The Debenture Issuer has the right under
the Indenture to defer payments of interest by extending the interest payment
period from time to time on the Debentures for a period not exceeding 20
consecutive quarterly Distribution periods, including the first such quarterly
Distribution period during such period (each an "Extension Period"), during
which Extension Period no interest shall be due and payable on the Debentures,
provided that no Extension Period shall extend beyond the maturity date of the
Debentures. As a consequence of such deferral, Distributions will also be
deferred. Despite such deferral, quarterly Distributions will continue to accrue
with additional distributions thereon (to the extent permitted by applicable
law) at the Coupon Rate compounded quarterly during any such Extension Period.
Prior to the termination of any such Extension Period, the Debenture Issuer may
further defer payments of interest by further extending such Extension Period;
provided that such Extension Period, together with all such previous and further
extensions within such Extension Period, may not exceed 20 consecutive quarterly
Distribution periods, including the first quarterly Distribution period during
such Extension Period, or extend beyond the maturity date of the Debentures.
Payments of accrued Distributions will be payable to Holders as they appear on
the books and records of the Trust on the first record date after the end of the
Extension Period. Upon the termination of any Extension Period and the payment
of all amounts then due, the Debenture Issuer may commence a new Extension
Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates. While the Capital Securities remain in book-entry only form, the
relevant record dates shall be one Business Day prior to the relevant payment
dates which payment dates correspond to the interest payment dates on the
Debentures. Subject to any applicable laws and regulations and the provisions of
the Declaration, each such payment in respect of the Capital Securities will be
made as described under the heading "Description of the Capital Securities --
Book-Entry Only Issuance -- The Depository Trust Company" in the Prospectus
Supplement dated June 19, 1998, to the Prospectus dated June 19, 1998 (together,
the "Prospectus"), of the Trust included in the Registration Statement on Form
S-3 of the Sponsor, the Trust and certain other business trusts. The relevant
record dates for the Common Securities shall be the same record date as for the
Capital Securities. If the Capital Securities shall not continue to remain in
book-entry only form, the relevant record dates for the Capital Securities shall
conform to the rules of any securities exchange on which the securities are
listed and, if none,
I-2
<PAGE>
shall be selected by the Regular Trustees, which dates shall be at least one
Business Day but not more than ten Business Days before the relevant payment
dates, which payment dates correspond to the interest payment dates on the
Debentures. Distributions payable on any Securities that are not punctually paid
on any Distribution payment date, as a result of the Debenture Issuer having
failed to make a payment under the Debentures, will cease to be payable to the
Person in whose name such Securities are registered on the relevant record date,
and such defaulted Distribution will instead be payable to the Person in whose
name such Securities are registered on the special record date or other
specified date determined in accordance with the Indenture. 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 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).
(d) If at any time while the Institutional Trustee is the Holder of
any Debentures, the Debenture Issuer is required to pay any Additional Interest
to the Trust or the Institutional Trustee under the Debentures, the Payment
Amount with respect to Distributions on the Securities pursuant to Section 6.1
of the Declaration shall include any such Additional Interest.
(e) In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution, winding-up
or liquidation of the Trust, the Holders of the Securities on the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive out of the assets of the Trust available for distribution to Holders of
Securities, after paying or making reasonable provision to pay all claims and
obligations of the Trust in accordance with Section 3808(e) of the Business
Trust Act, an amount equal to the aggregate of the stated liquidation amount of
$25 per Security plus accrued and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution"), unless, in
connection with such dissolution, winding-up or termination, Debentures in an
aggregate stated principal amount equal to the aggregate stated liquidation
amount of such Securities, with an interest rate equal to the Coupon Rate of,
and bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid Distributions on, such Securities, shall be distributed on a Pro Rata
basis to the Holders of the Securities in exchange for such Securities, after
paying or making reasonable provision to pay all claims and obligations of the
Trust in accordance with Section 3808(e) of the Business Trust Act.
If, upon any such dissolution, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by the Trust on the Securities shall be paid on a Pro Rata basis.
I-3
<PAGE>
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole or in part,
whether at maturity or upon redemption (either at the option of the Debenture
Issuer at any time on or after August 15, 2003 or pursuant to a Tax Event or
Regulatory Capital Event, the proceeds from such repayment or redemption shall
be simultaneously applied to redeem, at the Securities Redemption Price,
Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so repaid or redeemed; provided that holders
will be given not less than 30 nor more than 60 days notice of such redemption
of Securities.
(b) The "Securities Redemption Price" for each $25 in stated
liquidation amount of Securities shall be the liquidation amount of $25 per
Security, plus accrued and unpaid Distributions thereon to but excluding the
date of redemption; and
If, at any time, a Regulatory Capital Event shall occur and be
continuing, the Sponsor may (i) cause the Trust to be dissolved, with the result
that after satisfaction of liabilities to creditors, if any, Debentures with an
aggregate principal amount equal to the aggregate stated liquidation amount of,
with an interest rate identical to the distribution rate of, and accrued and
unpaid interest equal to accrued and unpaid distributions on, the Securities,
would be distributed to the Holders of the Securities in liquidation of such
holders' interests in the Trust on a pro rata basis within 90 days following the
occurrence of such Regulatory Capital Event or (ii) within 90 days following the
occurrence of such Regulatory Capital Event, redeem the Debentures, in whole or
in part, upon not less than 30 nor more than 60 days' notice, for cash, with the
result that, following such redemption, the Securities will be redeemed by the
Trust at the Securities Redemption Price; provided, however, that if at the time
there is available to the Sponsor of the Trust the opportunity to eliminate
within such 90-day period, the Regulatory Capital Event by taking some
ministerial action, such as filing a form or making an election or pursuing some
other similar reasonable measure that has no adverse effect on the Trust, the
Sponsor or the holders of the Securities, then the Sponsor or the Trust will
pursue such measure in lieu of distribution or redemption of the Debentures.
(c) "Regulatory Capital Event" means a determination by the Sponsor,
based on an opinion of counsel experienced in such matters (who may be an
employee of the Sponsor or any of its affiliates), that, as a result of any
amendment to, clarification of or change (including any announced prospective
change) in applicable laws or regulations or official interpretations thereof or
policies with respect thereto, which amendment, clarification or change is
effective after the date of this Prospectus Supplement, there is more than an
insubstantial risk that the Capital Securities will no longer constitute Tier 1
capital of the Sponsor or any bank holding company of which Citicorp is a
subsidiary (or its equivalent) for purposes of the capital adequacy guidelines
of the Board of Governors of the Federal Reserve System or its successor as the
Sponsor's primary federal banking regulator.
"Tax Event" means the Regular Trustees shall have received an
opinion (a "Dissolution Tax Opinion") of a nationally recognized independent tax
counsel experienced in such
I-4
<PAGE>
matters ("Tax Counsel") to the effect that, as a result of (a) any amendment to,
clarification of or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (b) any amendment to or
change in an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority (including
the enactment of any legislation and the publication of any judicial decision or
regulatory determination on or after such date), there is more than an
insubstantial risk that (i) the Trust would be subject to United States federal
income tax with respect to income accrued or received on the Debentures, (ii)
interest payable to the Trust on the Debentures would not be deductible by the
Sponsor for United States federal income tax purposes or (iii) the Trust would
be subject to more than a de minimis amount of other taxes, duties or other
governmental charges, provided that any such change, clarification or amendment
becomes effective on or after the date of this Prospectus Supplement.
If, at any time, a Tax Event shall occur and be continuing, the
Sponsor may cause the Trust to be dissolved, with the result that after
satisfaction of liabilities to creditors, if any, Debentures with an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the distribution rate of, and accrued and unpaid
interest equal to accrued and unpaid distributions on, the Securities, would be
distributed to the holders of the Securities in liquidation of such holders'
interests in the Trust on a Pro Rata basis within 90 days following the
occurrence of such Tax Event; provided that such dissolution and distribution
shall be conditioned on (i) the Regular Trustees' receipt of an opinion of Tax
Counsel (a "No Recognition Opinion"), which opinion may rely on published
revenue 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 such dissolution and distribution of
Debentures and (ii) the Sponsor being unable to avoid such Tax Event within such
90-day period by taking some ministerial action or pursuing some other
reasonable measure that will have no adverse effect on the Trust, the Sponsor or
the Holders of the Securities. Furthermore, if after receipt of a Dissolution
Tax Opinion by the Regular Trustees (i) the Sponsor has received an opinion (a
"Redemption Tax Opinion") of Tax Counsel that, as a result of a Tax Event, there
is more than an insubstantial risk that the Sponsor would be precluded from
deducting the interest on the Debentures for United States federal income tax
purposes, even after the Debentures were distributed to the holders of
Securities in liquidation of such Holders' interests in the Trust as described
above, or (ii) the Regular Trustees shall have been informed by such Tax Counsel
that it cannot deliver a No Recognition Opinion to the Trust, the Sponsor shall
have the right, within 90 days following the occurrence of such Tax Event, to
redeem the Debentures, in whole or in part, upon not less than 30 nor more than
60 days' notice, for cash, with the result that, following such redemption, the
Securities will be redeemed by the Trust at the Securities Redemption Price;
provided, however, that if at the time there is available to the Sponsor or the
Trust the opportunity to eliminate, within such 90-day period, the Tax Event by
taking some ministerial action, such as filing a form or making an election or
pursuing some other similar reasonable measure that has no adverse effect on the
Trust, the Sponsor or the Holders of the Securities, then the Sponsor or the
Trust will pursue such measure in lieu of redemption of the Debentures.
I-5
<PAGE>
(d) In the case of an optional redemption, if fewer than all the
outstanding Securities are to be so redeemed, the Common Securities and the
Capital Securities will be redeemed Pro Rata and the Capital Securities to be
redeemed will be as described in Section 4(g)(ii) below.
(e) On and from the date fixed by the Regular Trustees for any
distribution of Debentures and dissolution of the Trust: (i) the Securities will
no longer be deemed to be outstanding, (ii) The Depository Trust Company (the
"Depository") or its nominee (or any successor Clearing Agency or its nominee),
as the record Holder of the Capital Securities, will receive a registered global
certificate or certificates representing the Debentures to be delivered upon
such distribution and any certificates representing Securities, except for
certificates representing Capital Securities held by the Depository or its
nominee (or any successor Clearing Agency or its nominee), will be deemed to
represent beneficial interests in the Debentures having an aggregate principal
amount equal to the aggregate stated liquidation amount of, with an interest
rate identical to the Coupon Rate of, and accrued and unpaid interest equal to
accrued and unpaid Distributions on such Securities until such certificates are
presented to the Debenture Issuer or its agent for transfer or reissue.
(f) The Trust may not redeem fewer than all the outstanding
Securities unless all accrued and unpaid Distributions have been paid on all
Securities for all quarterly Distribution periods terminating on or before the
date of redemption.
(g) The procedure with respect to redemptions and distributions of
Debentures shall be as follows:
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities
to be redeemed or exchanged not fewer than 30 nor more than 60 days before
the date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Debentures. For
purposes of the calculation of the date of redemption or exchange and the
dates on which notices are given pursuant to this Section 4(g)(i), a
Redemption/ Distribution Notice shall be deemed to be given on the day
such notice is first mailed by first-class mail, postage prepaid, to
Holders of Securities. Each Redemption/Distribution Notice shall be
addressed to the Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Securities are
to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata
from each Holder of Capital Securities, it being understood that, in
respect of Capital Securities registered in the name of and held of record
by the Depository or its nominee (or any successor Clearing Agency or its
nominee), the distribution of the proceeds of such redemption will be made
to each Clearing
I-6
<PAGE>
Agency Participant (or Person on whose behalf such nominee holds such
securities) in accordance with the procedures applied by such agency or
nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are to be redeemed as set out in this Section 4 (which notice
will be irrevocable), then (A) while the Capital Securities are in
book-entry only form, with respect to the Capital Securities, by 12:00
noon, New York City time, on the redemption date, provided that the
Debenture Issuer has paid the Institutional Trustee a sufficient amount of
cash in connection with the related redemption or maturity of the
Debentures, the Institutional Trustee will deposit irrevocably with the
Depository or its nominee (or successor Clearing Agency or its nominee)
funds sufficient to pay the applicable Securities Redemption Price with
respect to the Capital Securities and will give the Depository irrevocable
instructions and authority to pay the Securities Redemption Price to the
Holders of the Capital Securities, and (B) with respect to Capital
Securities issued in definitive form and Common Securities, provided that
the Debenture Issuer has paid the Institutional Trustee a sufficient
amount of cash in connection with the related redemption or maturity of
the Debentures, the Institutional Trustee will pay the relevant Securities
Redemption Price to the Holders of such Securities by check mailed to the
address of the relevant Holder appearing on the books and records of the
Trust on the redemption date. If a Redemption/Distribution Notice shall
have been given and funds deposited as required, if applicable, then
immediately prior to the close of business on the date of such deposit, or
on the redemption date, as applicable, distributions will cease to accrue
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 Securities Redemption Price,
but without interest on such Securities Redemption Price. Neither the
Regular Trustees nor the Trust shall be required to register or cause to
be registered the transfer of any Securities that have been so called for
redemption. If any date fixed for redemption of Securities is not a
Business Day, then payment of the Securities 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)
except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date fixed for
redemption. If payment of the Securities Redemption Price in respect of
any Securities is improperly withheld or refused and not paid either by
the Institutional Trustee or by the Sponsor as guarantor pursuant to the
relevant Securities Guarantee, Distributions on such Securities will
continue to accrue from the original redemption date to the actual date of
payment, in which case the Securities Redemption Price shall include such
additional accrued Distributions.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in respect of the Capital
Securities, the Depository or its nominee (or any successor Clearing
Agency or its nominee) if the Global Certificates have been issued or, if
I-7
<PAGE>
Definitive Capital Security Certificates have been issued, to the Holder
thereof, and (B) in respect of the Common Securities to the Holder
thereof.
(v) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws and banking laws),
provided the acquiror is not the Holder of the Common Securities or the
obligor under the Indenture, the Sponsor or any of its subsidiaries may at
any time and from time to time purchase outstanding Capital Securities by
tender, in the open market or by private agreement.
5. Voting Rights - Capital Securities.
(a) Except as provided under Sections 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Capital Securities will
have no voting rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a majority in aggregate liquidation amount of the Capital Securities,
voting separately as a class may direct the time, method, and place of
conducting any proceeding for any remedy available to the Institutional Trustee,
or exercise any trust or power conferred upon the Institutional Trustee under
the Declaration, including the right to direct the Institutional Trustee, as
holder of the Debentures, to (i) exercise the remedies available under the
Indenture, conduct any proceeding for any remedy available to the Debenture
Trustee, or exercise any trust or power conferred on the Debenture Trustee with
respect to the Debentures, (ii) waive any past default and its consequences that
is waivable under Section 2.6 of the Indenture, or (iii) exercise any right to
rescind or annul a declaration that the principal of all the Debentures shall be
due and payable, provided, however, that, where a consent under the Indenture
would require the consent or act of the Holders of greater than a majority of
the Holders in principal amount of Debentures affected thereby, (a "Super
Majority"), the Institutional Trustee may only give such consent or take such
action at the written direction of the Holders of at least the proportion in
liquidation amount of the Capital Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding. The
Institutional Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Capital Securities. Other than with
respect to directing the time, method and place of conducting any remedy
available to the Institutional Trustee or the Debenture Trustee as set forth
above, the Institutional Trustee shall not take any action in accordance with
the directions of the Holders of the Capital Securities under this paragraph
unless the Institutional Trustee has obtained an opinion of tax counsel to the
effect that for the purposes of United States federal income tax the Trust will
not be classified as other than a grantor trust on account of such action. If
the Institutional Trustee fails to enforce its rights under the Declaration, any
Holder of Capital Securities may institute a legal proceeding directly against
any person to enforce the Institutional Trustee's rights under the Declaration
without first instituting a legal proceeding against the Institutional Trustee
or any other person. If a Declaration Event of Default has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay interest or principal on the Debentures on the date such interest or
principal 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
I-8
<PAGE>
enforcement of payment to such Holder of the principal of 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 Holder will be
subrogated to the rights of such holder of Capital Securities to the extent of
any payment made by the Issuer to such holder 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.
Any approval or direction 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 Regular 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 consents.
No vote or consent of the Holders of the Capital Securities will be
required for the Trust to redeem and cancel Capital Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
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, unless all of the Capital
Securities are owned by the sponsor or any such Affiliate.
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), (c), 7(a) and 8 as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after the
Event of Default with respect to the Capital Securities has been cured, waived,
or otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in liquidation amount of
the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional
I-9
<PAGE>
Trustee, or exercising any trust or power conferred upon the Institutional
Trustee under the Declaration, including (i) directing the time, method, place
of conducting any proceeding for any remedy available to the Debenture Trustee,
or exercising any trust or power conferred on the Debenture Trustee with respect
to the Debentures, (ii) waive any past default and its consequences that is
waivable under Section 2.6 of the Indenture, or (iii) exercise any right to
rescind or annul a declaration that the principal of all the Debentures shall be
due and payable, provided that, where a consent or action under the Indenture
would require the consent or act of the Holders of greater than a majority in
principal amount of Debentures affected thereby (a "Super Majority"), the
Institutional Trustee may only give such consent or take such action at the
written direction of the Holders of at least the proportion in liquidation
amount of the Common Securities which the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding. Pursuant to this
Section 6(c), the Institutional Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Capital Securities. Other
than with respect to directing the time, method and place of conducting any
remedy available to the Institutional Trustee or the Debenture Trustee as set
forth above, the Institutional Trustee shall not take any action in accordance
with the directions of the Holders of the Common Securities under this paragraph
unless the Institutional Trustee has obtained an opinion of tax counsel to the
effect that for the purposes of United States federal income tax the Trust will
not be classified as other than a grantor trust on account of such action. If
the Institutional Trustee fails to enforce its rights under the Declaration, any
Holder of Common Securities may institute a legal proceeding directly against
any Person to enforce the Institutional Trustee's rights under the Declaration,
without first instituting a legal proceeding against the Institutional Trustee
or any other Person.
Any approval or direction of 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 Regular 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 Declaration and the terms of the
Securities.
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of any or
I-10
<PAGE>
all of the Securities, whether by way of amendment to the Declaration or
otherwise, or (ii) the dissolution, winding-up or termination of the Trust,
other than as described in Section 8.1 of the Declaration, then the Holders of
outstanding Securities voting together as a single class will be entitled to
vote on such amendment or proposal (but not on any other amendment or proposal)
and such amendment or proposal shall not be effective except with the approval
of the Holders of at least a Majority in liquidation amount of the Securities
affected thereby; provided, that, if any amendment or proposal referred to in
clause (i) above would adversely affect only the Capital Securities or only the
Common Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities.
(b) In the event the consent of the Institutional Trustee as the
holder of the Debentures is required under the Indenture with respect to any
amendment, modification or termination on the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where the taking of any such action under the
Indenture would require the consent of the holders of greater than a majority in
aggregate principal amount of the Debentures (a "Super Majority"), the
Institutional Trustee may only give such consent at the direction of the Holders
of at least the proportion in liquidation amount of the Securities which the
relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding; provided, further, that where the taking of any such
action under the Indenture would require the consent of every holder of the
Debentures, the consent of all holders of Securities shall be required;
provided, further, that the Institutional Trustee shall not take any action in
accordance with the directions of the Holders of the Securities under this
Section 7(b) unless the Institutional Trustee has obtained an opinion of
nationally recognized independent tax counsel in such matters to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action.
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 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 Declaration 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.
I-11
<PAGE>
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 Declaration 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, liquidation and other payments to which they are
entitled.
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 Declaration.
The Sponsor will provide a copy of the Declaration, 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.
The Securities 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.
I-12
<PAGE>
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
This Capital Security is a Global Certificate within the meaning of
the Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary. This
Capital Security is exchangeable for Capital Securities registered in the name
of a person other than the Depositary or its nominee only in the limited
circumstances described in the Declaration and no transfer of this Capital
Security (other than a transfer of this Capital Security as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary) may be registered except in
limited circumstances.
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.
Certificate Number Number of Capital Securities
CUSIP NO. 17303 U200
Certificate Evidencing Capital Securities
of
CITICORP CAPITAL III
7.10% Capital Securities
(liquidation amount $25 per Capital Security)
CITICORP CAPITAL III, 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 Capital securities of
the Trust representing undivided beneficial interests in the assets of the Trust
designated the 7.10% Capital Securities (liquidation amount $25 per Capital
Security) (the "Capital Securities"). The Capital Securities are transferable on
the books and records
A1-1
<PAGE>
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 issued and shall in all respects
be subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust dated as of June 26, 1998, as the same may be amended from time to
time (the "Declaration"), including the designation of the terms of the Capital
Securities as set forth in Annex I to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Capital Securities Guarantee to the
extent provided therein. The Sponsor will provide a copy of the Declaration, the
Capital Securities Guarantee and the Indenture to a Holder without charge upon
written request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, 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.
IN WITNESS WHEREOF, the Trust has executed this certificate this
____ day of __________, 1998.
CITICORP CAPITAL III
By:________________________________
Name:
Title: Regular Trustee
A1-2
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Capital Securities referred to in the
within-mentioned Declaration.
Dated __________, ____
The Wilmington Trust Company,
as Institutional Trustee
By:____________________________
Authorized Signatory
or
Citibank, N.A.
as Authenticating Agent
By:____________________________
Authorized Signatory
A1-3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be fixed at a
rate per annum of 7.10% (the "Coupon Rate") of the stated liquidation amount of
$25 per Capital Security, such rate being the rate of interest payable on the
Debentures to be held by the Institutional Trustee. Distributions in arrears for
more than one quarterly Distribution period will bear interest thereon
compounded quarterly 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 Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 90-day quarterly
Distribution period.
Except as otherwise described below, distributions on the Capital
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears, on February 15, May 15, August 15 and
November 15 of each year, commencing on August 15, 1998, to the holders of
record on the relevant record dates (as specified in the Declaration) next
preceding such payment dates. The Debenture Issuer has the right under the
Indenture to defer payments of interest by extending the interest payment period
from time to time on the Debentures for a period not exceeding 20 consecutive
quarterly interest periods, including the first such quarterly Distribution
period during such extension period (each an "Extension Period"), provided that
no Extension Period shall extend beyond the date of the maturity of the
Debentures. As a consequence of such deferral, Distributions will also be
deferred. Despite such deferral, quarterly Distributions will continue to accrue
with interest thereon (to the extent permitted by applicable law) at the Coupon
Rate compounded quarterly during any such Extension Period. Prior to the
termination of any such Extension Period, the Debenture Issuer may further defer
payments of interest by further extending such Extension Period; provided that
such Extension Period, together with all such previous and further extensions
within such Extension Period, may not exceed 20 consecutive quarterly interest
periods, including the first quarterly interest period during such Extension
Period, or extend beyond the maturity date of the Debentures. Payments of
accrued Distributions will be payable to Holders as they appear on the books and
records of the Trust on the first record date after the end of the Extension
Period. Upon the termination of any Extension Period and the payment of all
amounts then due, the Debenture Issuer may commence a new Extension Period,
subject to the above requirements.
Upon the occurrence and continuation of a Tax Event, (x) the Sponsor
shall have the right, in certain circumstances described in Annex I to the
Declaration, to liquidate the Trust within 90 days following the occurrence of
such Tax Event and cause the Debentures to be distributed to
A1-4
<PAGE>
the holders of the Securities in liquidation of the Trust and (y) the Debenture
Issuer shall have the right, in certain circumstances described in Annex I to
the Declaration, to redeem the Debentures in whole but not in part within 90
days following the occurrence of such Tax Event and, following such redemption,
cause Securities with an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so redeemed to be redeemed by the Trust.
Upon the occurrence and continuation of a Regulatory Capital Event,
(x) the Sponsor shall have the right to liquidate the Trust within 90 days
following the occurrence of such Regulatory Capital Event and cause the
Debentures to be distributed to the holders of the Securities in liquidation of
the Trust and (y) the Debenture Issuer shall have the right to redeem the
Debentures in whole or in part within 90 days following the occurrence of such
Regulatory Capital Event and, following such redemption, cause Securities with
an aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so redeemed to be redeemed by the Trust.
The Capital Securities shall be redeemable as provided in the
Declaration.
A1-5
<PAGE>
_____________________
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 Exchange Act of 1934, as amended.
A1-6
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
CITICORP CAPITAL III
7.10% Common Securities
(liquidation amount $25 per Common Security)
CITICORP CAPITAL III, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that Citicorp (the
"Holder") is the registered owner of common securities of the Trust representing
undivided beneficial interests in the assets of the Trust designated the 7.10%
Common Securities (liquidation amount $25 per Common Security) (the "Common
Securities"). The Common Securities are transferable on the books and records of
the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Common Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust dated as of June 26, 1998, as the same may be amended from time to
time (the "Declaration"), including the designation of the terms of the Common
Securities as set forth in Annex I to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Common Securities Guarantee to the
extent provided therein. The Sponsor will provide a copy of the Declaration, the
Common Securities Guarantee and the Indenture (including any supplemental
indenture) to a Holder without charge upon written request to the Sponsor at its
principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
A2-1
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of , 1998.
CITICORP CAPITAL III
By:________________________________
Name:
Title: Regular Trustee
A2-2
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Common Securities referred to in the
within-mentioned Declaration.
Dated __________, ____
The Wilmington Trust Company,
as Institutional Trustee
By:___________________________
Authorized Signatory
or
Citibank, N.A.,
as Authenticating Agent
By:___________________________
Authorized Signatory
A2-3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a
rate per annum of 7.10% (the "Coupon Rate") of the stated liquidation amount of
$25 per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Institutional Trustee. Distributions in arrears for
more than one quarterly Distribution period will bear interest thereon
compounded quarterly 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 Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 90-day quarterly
Distribution period.
Except as otherwise described below, distributions on the Common
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears, on February 15, May 15, August 15 and
November 15 of each year, commencing on August 15, 1998, to Holders of record
fifteen (15) days prior to such payment dates, which payment dates shall
correspond to the interest payment dates on the Debentures. The Debenture Issuer
has the right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not
exceeding 20 consecutive calendar quarter interest periods, including the first
such quarter during such extension period (each an "Extension Period"), provided
that no Extension Period shall extend beyond the date of the maturity of the
Debentures. As a consequence of such deferral, Distributions will also be
deferred. Despite such deferral, quarterly Distributions will continue to accrue
with interest thereon (to the extent permitted by applicable law) at the Coupon
Rate compounded quarterly during any such Extension Period. Prior to the
termination of any such Extension Period, the Debenture Issuer may further defer
payments of interest by further extending such Extension Period; provided that
such Extension Period, together with all such previous and further extensions
within such Extension Period, may not exceed 20 consecutive calendar quarter
interest periods, including the first quarterly interest period during such
Extension Period, or extend beyond the maturity date of the Debentures. Payments
of accrued Distributions will be payable to Holders as they appear on the books
and records of the Trust on the first record date after the end of the Extension
Period. Upon the termination of any Extension Period and the payment of all
amounts then due, the Debenture Issuer may commence a new Extension Period,
subject to the above requirements.
A2-4
<PAGE>
Upon the occurrence and continuation of a Tax Event, (x) the Sponsor
shall have the right, in certain circumstances described in Annex I to the
Declaration, to liquidate the Trust within 90 days following the occurrence of
such Tax Event and cause the Debentures to be distributed to the holders of the
Securities in liquidation of the Trust and (y) the Debenture Issuer shall have
the right, in certain circumstances described in Annex I to the Declaration, to
redeem the Debentures in whole but not in part within 90 days following the
occurrence of such Tax Event and, following such redemption, cause Securities
with an aggregate liquidation amount equal to the aggregate amount of the
Debentures so redeemed to be redeemed by the Trust.
Upon the occurrence and continuation of a Regulatory Capital Event,
(x) the Sponsor shall have the right to liquidate the Trust within 90 days
following the occurrence of such Regulatory Capital Event and cause the
Debentures to be distributed to the holders of the Securities in liquidation of
the Trust and (y) the Debenture Issuer shall have the right to redeem the
Debentures in whole but not in part within 90 days following the occurrence of
such Regulatory Capital Event and, following such redemption, cause Securities
with an aggregate liquidation amount equal to the aggregate amount of the
Debentures so redeemed to be redeemed by the Trust.
The Common Securities shall be redeemable as provided in the
Declaration.
<PAGE>
_____________________
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.
