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EXHIBIT 4.1
AMENDED
AND
RESTATED
DECLARATION OF TRUST
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TABLE OF CONTENTS
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ARTICLE 1: INTERPRETATION AND DEFINITIONS.........................................................................1
SECTION 1.1 INTERPRETATION AND DEFINITIONS...............................................................1
ARTICLE 2: TRUST INDENTURE ACT...................................................................................12
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION............................................................12
SECTION 2.2 LISTS OF HOLDERS OF THE SECURITIES..........................................................13
SECTION 2.3 REPORTS BY THE PROPERTY TRUSTEE.............................................................13
SECTION 2.4 PERIODIC REPORTS TO THE PROPERTY TRUSTEE....................................................13
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT............................................13
SECTION 2.6 TRUST ENFORCEMENT EVENTS; WAIVER............................................................14
SECTION 2.7 TRUST ENFORCEMENT EVENT; NOTICE.............................................................15
ARTICLE 3: ORGANIZATION..........................................................................................15
SECTION 3.1 NAME AND ORGANIZATION.......................................................................15
SECTION 3.2 OFFICE......................................................................................16
SECTION 3.3 PURPOSE.....................................................................................16
SECTION 3.4 AUTHORITY...................................................................................16
SECTION 3.5 TITLE TO PROPERTY OF THE TRUST..............................................................16
SECTION 3.6 POWERS AND DUTIES OF THE REGULAR TRUSTEES...................................................17
SECTION 3.7 PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES........................................19
SECTION 3.8 POWERS AND DUTIES OF THE PROPERTY TRUSTEE...................................................20
SECTION 3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF THE PROPERTY TRUSTEE.................................22
SECTION 3.10 CERTAIN RIGHTS OF PROPERTY TRUSTEE..........................................................24
SECTION 3.11 DELAWARE TRUSTEE............................................................................26
SECTION 3.12 EXECUTION OF DOCUMENTS......................................................................26
SECTION 3.13 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES......................................26
SECTION 3.14 DURATION OF TRUST...........................................................................26
SECTION 3.15 MERGERS.....................................................................................26
SECTION 3.16 COMPENSATION AND REIMBURSEMENT..............................................................28
SECTION 3.17 PROPERTY TRUSTEE MAY FILE PROOFS OF CLAIM...................................................28
SECTION 3.18 REGISTRATION STATEMENT AND RELATED MATTERS..................................................29
SECTION 3.19 BOOKS AND RECORDS...........................................................................30
ARTICLE 4: THE SPONSOR...........................................................................................30
SECTION 4.1 RESPONSIBILITIES OF THE SPONSOR.............................................................30
SECTION 4.2 INDEMNIFICATION AND EXPENSES OF THE TRUSTEES................................................31
ARTICLE 5: THE HOLDERS OF THE COMMON SECURITIES..................................................................31
SECTION 5.1 SENIOR DEFERRABLE NOTES ISSUER'S PURCHASE OF THE COMMON SECURITIES..........................31
SECTION 5.2 COVENANTS OF THE SENIOR DEFERRABLE NOTES ISSUER.............................................31
SECTION 5.3 HOLDER OF THE COMMON SECURITIES.............................................................32
SECTION 5.4 EXCHANGES...................................................................................32
ARTICLE 6: THE TRUSTEES..........................................................................................33
SECTION 6.1 NUMBER OF TRUSTEES..........................................................................33
SECTION 6.2 DELAWARE TRUSTEE; ELIGIBILITY...............................................................33
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SECTION 6.3 PROPERTY TRUSTEE; ELIGIBILITY...............................................................33
SECTION 6.4 QUALIFICATIONS OF THE REGULAR TRUSTEES GENERALLY............................................34
SECTION 6.5 INITIAL REGULAR TRUSTEES....................................................................34
SECTION 6.6 APPOINTMENT, REMOVAL AND RESIGNATION OF THE TRUSTEES........................................34
SECTION 6.7 VACANCIES AMONG TRUSTEES....................................................................36
SECTION 6.8 EFFECT OF VACANCIES.........................................................................36
SECTION 6.9 MEETINGS....................................................................................36
SECTION 6.10 DELEGATION OF POWER BY THE REGULAR TRUSTEES.................................................37
SECTION 6.11 MERGER, CONSOLIDATION, CONVERSION OR SUCCESSION TO BUSINESS.................................37
ARTICLE 7: TERMS OF THE SECURITIES...............................................................................37
SECTION 7.1 GENERAL PROVISIONS REGARDING THE SECURITIES.................................................37
SECTION 7.2 DISTRIBUTIONS...............................................................................40
SECTION 7.3 REDEMPTION OF SECURITIES....................................................................42
SECTION 7.4 REDEMPTION PROCEDURES.......................................................................42
SECTION 7.5 VOTING RIGHTS OF THE PREFERRED SECURITIES...................................................44
SECTION 7.6 VOTING RIGHTS OF THE COMMON SECURITIES......................................................46
SECTION 7.7 PAYING AGENT................................................................................47
SECTION 7.8 LISTING.....................................................................................47
SECTION 7.9 TRANSFER OF THE SECURITIES..................................................................48
SECTION 7.10 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES...........................................49
SECTION 7.11 DEEMED HOLDERS..............................................................................49
SECTION 7.12 GLOBAL SECURITIES...........................................................................49
SECTION 7.13 REMARKETING.................................................................................51
ARTICLE 8: DISSOLUTION AND TERMINATION OF THE TRUST.............................................................54
SECTION 8.1 DISSOLUTION AND TERMINATION OF THE TRUST....................................................54
SECTION 8.2 LIQUIDATION DISTRIBUTION UPON DISSOLUTION OF THE TRUST......................................55
ARTICLE 9: LIMITATION OF LIABILITY OF HOLDERS OF THE SECURITIES, THE DELAWARE TRUSTEE AND OTHERS................56
SECTION 9.1 LIABILITY...................................................................................56
SECTION 9.2 EXCULPATION.................................................................................57
SECTION 9.3 FIDUCIARY DUTY..............................................................................57
SECTION 9.4 INDEMNIFICATION.............................................................................58
SECTION 9.5 OUTSIDE BUSINESSES..........................................................................59
ARTICLE 10: ACCOUNTING..........................................................................................59
SECTION 10.1 FISCAL YEAR.................................................................................59
SECTION 10.2 CERTAIN ACCOUNTING MATTERS..................................................................59
SECTION 10.3 BANKING.....................................................................................60
SECTION 10.4 WITHHOLDING.................................................................................60
ARTICLE 11: AMENDMENTS AND MEETINGS.............................................................................61
SECTION 11.1 AMENDMENTS..................................................................................61
SECTION 11.2 MEETINGS OF THE HOLDERS OF THE SECURITIES; ACTION BY WRITTEN CONSENT........................63
ARTICLE 12: REPRESENTATIONS OF THE PROPERTY TRUSTEE AND THE DELAWARE TRUSTEE....................................64
SECTION 12.1 REPRESENTATIONS AND WARRANTIES OF THE PROPERTY TRUSTEE......................................64
SECTION 12.2 REPRESENTATIONS AND WARRANTIES OF THE DELAWARE TRUSTEE......................................65
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ARTICLE 13: MISCELLANEOUS........................................................................................65
SECTION 13.1 NOTICES.....................................................................................65
SECTION 13.2 GOVERNING LAW...............................................................................67
SECTION 13.3 INTENTION OF THE PARTIES....................................................................67
SECTION 13.4 HEADINGS....................................................................................67
SECTION 13.5 SUCCESSORS AND ASSIGNS......................................................................67
SECTION 13.6 PARTIAL ENFORCEABILITY......................................................................67
SECTION 13.7 COUNTERPARTS................................................................................67
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AMENDED AND RESTATED DECLARATION OF TRUST
This Amended and Restated Declaration of Trust of VEC Trust I
("Declaration"), dated as of June 28, 2000, by and among Valero Energy
Corporation, a Delaware corporation, as Sponsor, Jay D. Browning, John D.
Gibbons, and Donna M. Titzman, as the initial Regular Trustees, The Bank of New
York, as the initial Property Trustee, and The Bank of New York (Delaware), as
the initial Delaware Trustee, not in their individual capacities but solely as
Trustees, and the Holders, from time to time, of the Securities representing
undivided beneficial ownership interests in the assets of the Trust to be issued
pursuant to this Declaration.
WHEREAS, certain of the Trustees and the Sponsor established VEC Trust
I (the "Trust"), a business trust under the Business Trust Act, pursuant to a
Declaration of Trust dated as of March 22, 2000, (the "Original Declaration")
and a Certificate of Trust (the "Certificate of Trust") filed with the Secretary
of State of the State of Delaware on March 22, 2000; and
WHEREAS, the sole purpose of the Trust shall be to sell and issue
certain securities representing undivided beneficial interests in the assets of
the Trust, to invest the proceeds from such sales in the Senior Deferrable Notes
issued by the Senior Deferrable Notes Issuer and to engage in only those
activities necessary or incidental thereto; and
WHEREAS, the parties hereto, by this Declaration, amend and restate
each and every term and provision of the Original Declaration.
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 hereby declare that all assets contributed to the Trust 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 1: INTERPRETATION AND DEFINITIONS
SECTION 1.1 Interpretation and Definitions. Unless the context
otherwise requires:
(a) capitalized terms used in this Declaration but not defined in the
preamble above shall have the meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Declaration shall have the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration" shall be
to this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles, Sections, Recitals
and Exhibits shall be to Articles and Sections of, or Recitals and Exhibits to,
this Declaration unless otherwise specified;
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(e) unless otherwise defined in this Declaration, a term defined in the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), shall have
the same meaning when used in this Declaration; and
(f) a reference to the singular shall include the plural and vice
versa, and a reference to any masculine form of a term shall include the
feminine or neuter form of a term, as applicable.
(g) the following terms shall have the following meanings:
"Affiliate" of any specified Person shall mean any other
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person shall mean
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" shall have meanings
correlative to the foregoing.
"Applicable Margin" shall mean the spread determined as set
forth below, based on the prevailing rating of the senior notes of the Senior
Deferrable Notes Issuer in effect at the close of business on the Business Day
immediately preceding the date of a Failed Remarketing:
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Prevailing Rating Spread
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AA/"Aa"..................................3.00%
A/"a"....................................4.00%
BBB/"Baa"................................5.00%
Below BBB/"Baa"..........................7.00%
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For purposes of this definition, the "prevailing rating" of the senior notes of
the Senior Deferrable Notes Issuer shall be:
(i) AA/"Aa" if the senior notes of the Senior Deferrable
Notes Issuer have a credit rating of AA or better by S&P and "Aa3" or
better by Moody's or the equivalent of such ratings by such agencies or
a comparable rating agency or comparable rating agencies selected by
the Remarketing Agent (after consultation with the Company);
(ii) if not under clause (i) above, then A/"a" if the senior
notes of the Senior Deferrable Notes Issuer have a credit rating of A-
or better by S&P and "A3" or better by Moody's or the equivalent of
such ratings by such agencies or a comparable rating agency or
comparable rating agencies selected by the Remarketing Agent (after
consultation with the Company);
(iii) if not under clauses (i) or (ii) above, then BBB/"Baa"
if the senior notes of the Senior Deferrable Notes Issuer have a credit
rating of BBB- or better by S&P and "Baa" or better by Moody's or the
equivalent of such ratings by such agencies or a comparable rating
agency or comparable rating agencies selected by the Remarketing Agent
(after consultation with the Company); or
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(iv) if not under clauses (i) through (iii) above, then Below
BBB/"Baa."
Notwithstanding the foregoing, (A) if (i) the credit rating of the senior notes
of the Company by S&P shall be on the "Credit Watch" of S&P with a designation
of "negative implications" or "developing," or (ii) the credit rating of the
senior notes of the Company by Moody's shall be on the "Corporate Credit Watch
List" of Moody's with a designation of "downgrade" or "uncertain," or, in each
case, on any successor list of S&P or Moody's with a comparable designation, the
prevailing ratings of the senior notes of the Company shall be deemed to be
within a range one full level lower in the above table than those actually
assigned to the senior notes of the Company by Moody's and S&P and (B) if the
senior notes of the Company are rated by only one rating agency on or before the
Remarketing Date, the prevailing rating shall at all times be determined without
reference to the rating of any other rating agency; provided that if no such
rating agency shall have in effect a rating for the senior notes of the Company,
and the Remarketing Agent is unable to identify a comparable rating agency or
rating agencies, as required above, the prevailing rating shall be Below BBB/
"baa."
"Applicable Ownership Interest" shall mean, with respect to a
PEPS Units and the U.S. treasury securities in the Treasury Portfolio, (A) a
1/40, or 2.5%, undivided beneficial ownership interest in a $1,000 face amount
of a principal or interest strip in a U.S. treasury security included in such
Treasury Portfolio that matures on or prior to August 15, 2003 and (B) for each
scheduled interest payment date on the Senior Deferrable Notes after the Tax
Event Redemption Date, a 1/40, or 2.5%, undivided beneficial ownership interest
in a $1,000 face amount of a principal or interest strip in a U.S. treasury
security that matures on or prior to such date.
"Applicable Principal Amount" shall mean either (A) if the Tax
Event Redemption Date occurs prior to the Purchase Contract Settlement Date, the
aggregate principal amount of the Senior Deferrable Notes corresponding to the
aggregate stated liquidation amount of the Preferred Securities that are
components of the PEPS Units on the Tax Event Redemption Date or (B) if the Tax
Event Redemption Date occurs on or after the Purchase Contract Settlement Date,
the aggregate principal amount of the Senior Deferrable Notes corresponding to
the aggregate stated liquidation amount of the Preferred Securities outstanding
on such Tax Event Redemption Date.
"Authorized Officer" of a Person shall mean any Person that is
authorized to bind such Person.
"Beneficial Owner" shall mean, with respect to a Global
Security, a Person who is the beneficial owner of a book-entry interest in such
Global Security as reflected on the books of the Depositary or on the books of a
Person maintaining an account with such Depositary (directly as a Depositary
Participant or as an indirect participant, in each case in accordance with the
rules of such Depositary).
"Business Day" shall mean any day other than a Saturday or
Sunday or a day on which banking institutions in the City of New York, New York
or San Antonio, Texas are authorized or required by law or executive order to
remain closed.
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"Business Trust Act" shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time
to time, or any successor legislation.
"Cash Settlement" shall have the meaning specified in the
Purchase Contract Agreement.
"Certificate" shall mean a Common Security Certificate or a
Preferred Security Certificate.
"Clearing Agency" shall mean an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the Preferred Securities and in whose name or in the name of a
nominee of that organization shall be registered a Global Certificate and which
shall undertake to effect book-entry transfers and pledges of the Preferred
Securities.
"Closing Date" shall mean the date on which the Preferred
Securities are initially issued and sold.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, or any successor legislation. A reference to a
specific section of the Code refers not only to such specific section but also
to any corresponding provision of any federal tax statute enacted after the date
of this Declaration, as such specific section or corresponding provision is in
effect on the date of application of the provisions of this Declaration
containing such reference.
"Collateral Agent" shall mean Bank One Trust Company, N.A.
"Commission" shall mean the Securities and Exchange
Commission.
"Common Security" shall have the meaning specified in Section
7.1(a).
"Common Security Certificate" shall mean a definitive
certificate in fully registered form representing a Common Security,
substantially in the form of Exhibit B hereto.
"Company" shall mean Valero Energy Corporation, a Delaware
corporation, the Sponsor, Senior Deferrable Notes Issuer, and the parent of the
Trust.
"Compounded Distributions" shall have the meaning specified in
Section 7.2(b).
"Corporate Trust Office" shall mean the principal office of
the Property Trustee at which, at any particular time, its corporate trust
business shall be administered, which office at the date hereof is located at
101 Barclay Street, 21 West, New York, New York 10286, Attn: Corporate Trust
Services Division.
"Covered Person" shall mean (A) any officer, director,
shareholder, partner, member, representative, employee or agent of (i) the
Sponsor, (ii) any Affiliate of the Sponsor, (iii) the Trust or (iv) any
Affiliate of the Trust and (B) any Holder.
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"Depositary" shall mean, with respect to Securities issuable
in whole or in part in the form of one or more Global Securities, a clearing
agency registered under the Exchange Act that is designated to act as depositary
for such Securities, and initially shall be The Depository Trust Company.
"Depositary Agreement" shall mean the agreement among the
Trust, the Property Trustee and the Depositary dated as of the Closing Date, as
the same may be amended or supplemented from time to time.
"Depositary Participant" shall mean a member of, or
participant in, the Depositary.
"Direct Action" shall have the meaning specified in Section
3.8(e).
"Distribution" shall mean a distribution payable to the
Holders in accordance with Section 7.2.
"Exchange Act" shall mean the Securities Exchange Act of 1934
and any statute successor thereto, in each case as amended from time to time,
and the rules and regulations promulgated thereunder.
"Failed Remarketing" shall have the meaning specified in
Section 7.13(h).
"Fiscal Year" shall have the meaning specified in Section
10.1.
"Foreign Person" shall mean any Person that is not a United
States Person.
"Global Certificate" shall have the meaning specified in
Section 7.1(h).
"Global Security" shall mean a global Preferred Security
Certificate registered in the name of the Depositary or its nominee.
"Guarantee" shall mean the Guarantee Agreement, dated as of
June 28, 2000, of the Sponsor, as may be amended from time to time, in respect
of the Preferred Securities.
"Holder" shall mean any holder of Securities, as registered on
the books and records of the Trust, such holder being a beneficial owner within
the meaning of the Business Trust Act, provided that in determining whether the
Holders of the requisite liquidation amount of Preferred Securities have voted
on any matter provided for in this Declaration, then for the purpose of such
determination only (and not for any other purpose hereunder), if the Preferred
Securities remain in the form of one or more Global Securities and if the
Depositary has sent an omnibus proxy to the Depositary Participants to whose
accounts the Preferred Securities are credited on the record date, the term
"Holders" shall mean such Depositary Participants acting at the direction of the
Beneficial Owners.
"Indemnified Person" shall mean any Trustee, any Affiliate of
any Trustee, any Paying Agent, any officers, directors, shareholders, members,
partners, employees,
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representatives or agents of any Trustee, Affiliate of a Trustee or Paying
Agent, or any officer, employee or agent of the Trust or any of its Affiliates.
"Indenture" shall mean the indenture dated as of December 12,
1997, as supplemented by the First Supplemental Indenture relating to the Senior
Deferrable Notes, dated as of June 28, 2000, between the Senior Deferrable Notes
Issuer and the Indenture Trustee (including the provisions of the Trust
Indenture Act that are deemed incorporated therein), pursuant to which the
Senior Deferrable Notes are to be issued.
"Indenture Event of Default" shall have the meaning given to
the term "Event of Default" in the Indenture.
"Indenture Trustee" shall mean The Bank of New York, in its
capacity as trustee under the Indenture, until a successor is appointed
thereunder, and thereafter shall mean such successor trustee.
"Investment Company" shall mean an investment company as
defined in the Investment Company Act and the regulations promulgated
thereunder.
"Investment Company Act" shall mean the Investment Company Act
of 1940, as amended from time to time, or any successor legislation.
"Legal Action" shall have the meaning specified in Section
3.6(f).
"List of Holders" shall have the meaning specified in Section
2.2(a).
"Majority in Liquidation Amount" shall mean, except as
provided by the Trust Indenture Act, Holders of outstanding Securities, voting
together as a single class, or, as the context may require, Holders of
outstanding Preferred Securities or Holders of the 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 accumulated and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Securities, Preferred Securities or Common Securities, as the
case may be.
"Moody's" shall mean Moody's Investors Service, Inc.
"New York Stock Exchange" shall mean the New York Stock
Exchange, Inc or any successor thereto.
"Officers' Certificate" shall mean, when delivered by the
Trust, a certificate signed by a majority of the Regular Trustees of the Trust
and, when delivered by the Sponsor, a certificate signed by (A) the Chairman of
the Board, President or a Vice President of the Sponsor and (B) the Treasurer,
Assistant Treasurer or Secretary of the Sponsor. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Declaration shall include, where applicable:
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(i) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions relating
thereto;
(ii) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering the
Officers' Certificate;
(iii) 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
(iv) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Over-allotment Option" shall mean any over-allotment option
contained in an underwriting agreement pursuant to which the PEPS Units are
sold.
"Paying Agent" shall have the meaning specified in Section
3.8(h).
"Payment Amount" shall have the meaning specified in Section
7.2(c).
"PEPS Units" shall mean a security consisting of a unit
comprised of (A) a purchase contract under which the holder of the unit will
purchase from the Company, for $25 in cash, a certain number of shares of common
stock, par value $.01 per share, of the Company and (B) beneficial ownership of
a Preferred Security or Senior Deferrable Note, or in certain circumstances
following the occurrence of a Tax Event, the appropriate Applicable Ownership
Interest of the Treasury Portfolio.
"Person" shall mean 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.
"Pledge Agreement" shall mean the Pledge Agreement dated as of
June 28, 2000 among the Company, the Collateral Agent, Bank One Trust Company,
N.A., as Securities Intermediary, and the Purchase Contract Agent.
"Preferred Security" shall have the meaning specified in
Section 7.1(a).
"Preferred Security Certificate" shall mean a definitive
certificate in fully registered form representing a Preferred Security,
substantially in the form of Exhibit A.
"Primary Treasury Dealer" shall mean a primary U.S. government
securities dealer in New York City.
"Property Account" shall have the meaning specified in Section
3.8(c)
"Property Trustee" shall mean the Trustee meeting the
eligibility requirements set forth in Section 6.3.
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"Pro Rata" shall mean pro rata to each Holder according to the
aggregate liquidation amount of the Securities held by such Holder in relation
to the aggregate liquidation amount of all Securities outstanding.
"Purchase Contract Agent" shall mean The Bank of New York.
"Purchase Contract Agreement" shall mean the Purchase Contract
Agreement dated as of June 28, 2000 between the Company and The Bank of New
York, as Purchase Contract Agent.
"Purchase Contract Settlement Date" shall mean August 18,
2003.
"Quorum" shall mean a majority of the Regular Trustees or, if
there are only two Regular Trustees, both of them.
"Quotation Agent" shall mean (A) Morgan Stanley & Co.
Incorporated and any respective successor, provided that if Morgan Stanley & Co.
Incorporated or any respective successor ceases to be a Primary Treasury Dealer,
the Sponsor shall substitute another Primary Treasury Dealer therefor or (B) any
other Primary Treasury Dealer selected by the Sponsor.
"Redemption Amount" shall mean, for each Senior Deferrable
Note, the product of the principal amount of such Senior Deferrable Note and a
fraction, the numerator of which shall be the Treasury Portfolio Purchase Price
and the denominator of which shall be the Applicable Principal Amount.
"Redemption/Distribution Notice" shall have the meaning
specified in Section 7.4(a).
"Redemption Price" shall mean the amount for which the
Securities will be redeemed, which amount will equal the lesser of (i) the
redemption price paid by the Senior Deferrable Notes Issuer to repay or redeem,
in whole or in part, the Senior Deferrable Notes held by the Trust plus an
amount equal to accumulated and unpaid Distributions on such Securities through
the date of their redemption or (ii) the amount received by the Trust in respect
of the Senior Deferrable Notes so repaid or redeemed.
"Regular Trustee" shall mean any trustee of the Trust other
than the Property Trustee and the Delaware Trustee.
"Remarketing" shall mean the operation of the procedures for
remarketing specified in Section 7.13.
"Remarketed Securities" shall mean (i) so long as the Trust
has not been dissolved, the Preferred Securities or (ii) if the Trust has been
dissolved, the Senior Deferrable Notes.
"Remarketing Agent" shall mean Morgan Stanley & Co.
Incorporated or if the Remarketing Agent is removed or resigns, any successor
remarketing agent selected by the Sponsor.
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"Remarketing Agreement" shall mean the Remarketing Agreement
dated as of June 28, 2000 among the Company, the Trust and the Remarketing
Agent.
"Remarketing Date" shall mean the third Business Day preceding
August 18, 2003.
"Remarketing Settlement Date" shall mean the date, if any, on
which the settlement of the Remarketed Securities has occurred through the
normal settlement procedures in effect at such time of the Depositary or any
successor Depositary.
"Reset Rate" shall mean the distribution rate per annum, as
determined by the Remarketing Agent, that results from the Remarketing pursuant
to Section 7.13.
"Responsible Officer" shall mean, with respect to the Property
Trustee, any officer with direct responsibility for the administration of this
Declaration and also shall mean, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred due to that officer's
knowledge of and familiarity with the particular subject.
"Rule 3a-5" shall mean Rule 3a-5 under the Investment Company
Act or any successor rule thereunder.
"S&P" shall mean Standard & Poor's Corporation.
"Scheduled Remarketing Settlement Date" shall mean the date,
if any, on which the settlement of the Remarketed Securities is scheduled to
occur.
"Securities" shall mean the Common Securities and the
Preferred Securities.
"Securities Act" shall mean the Securities Act of 1933, as
amended from time to time, or any successor legislation.
"Security Registrar" shall have the meaning specified in
Section 7.9(a)(iv).
"Senior Deferrable Notes" shall mean the series of senior
deferrable notes to be issued by the Senior Deferrable Notes Issuer under the
Indenture and to be purchased by the Trust and held by the Property Trustee.
"Senior Deferrable Notes Issuer" shall mean Valero Energy
Corporation, a Delaware corporation, or any successor entity in a merger,
consolidation, conversion, amalgamation or replacement by or conveyance,
transfer or lease of its properties substantially as an entirety, in its
capacity as issuer of the Senior Deferrable Notes under the Indenture.
"66 2/3% in Liquidation Amount" shall mean Holders of
outstanding Securities, voting together as a single class, or, as the context
may require, Holders of outstanding Preferred Securities voting separately as a
class, who are the record owners of 66 2/3% or more of the aggregate liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accumulated and unpaid Distributions to the date
upon which the
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voting percentages are determined) of all outstanding Securities or Preferred
Securities, as the case may be.
"Sponsor" shall mean Valero Energy Corporation, a Delaware
corporation, or any successor entity in a merger, consolidation, conversion,
amalgamation or replacement by or conveyance, transfer or lease of its
properties substantially as an entirety, in its capacity as sponsor of the
Trust.
"Successor Delaware Trustee" shall have the meaning specified
in Section 6.6(b).
"Successor Entity" shall have the meaning specified in Section
3.15(b)(i).
"Successor Property Trustee" shall have the meaning specified
in Section 6.6(b).
"Successor Security" shall have the meaning specified in
Section 3.15(b)(i)(B).
"Supermajority" shall have the meaning specified in Section
2.6(a)(ii).
"Tax Event" shall mean the receipt by the Sponsor and the
Trust of an opinion of a law firm having a nationally recognized tax practice,
to the effect that, as a result of any amendment to, change in or announced
proposed change in the laws (or any regulations thereunder) of the United States
or any political subdivision or taxing authority thereof or therein, or as a
result of any official administrative decision, pronouncement, judicial decision
or action interpreting or applying such laws or regulations, which amendment or
change is effective or which proposed change, pronouncement, action or decision
is announced on or after the Closing Date, there is more than an insubstantial
increase in the risk that (i) the Trust is, or within 90 days of the date of
such opinion will be, subject to United States federal income tax with respect
to income received or accrued on the Senior Deferrable Notes, (ii) interest
payable by the Senior Deferrable Notes Issuer on the Senior Deferrable Notes is
not, or within 90 days of the date of such opinion will not be, deductible by
the Senior Deferrable Notes Issuer, in whole or in part, for United States
federal income tax purposes, or (iii) the Trust is, or within 90 days of the
date of such opinion will be, subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
"Tax Event Redemption" shall mean that a Tax Event has
occurred and is continuing and the Senior Deferrable Notes have been called for
redemption pursuant to the Indenture.
"Tax Event Redemption Date" shall mean the date of the Tax
Event Redemption, if any, specified by the Senior Deferrable Notes Issuer.
"10% in Liquidation Amount" shall mean, except as provided 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 Preferred
Securities or Holders of outstanding Common Securities, voting separately as a
class, who are the record owners of 10% or more of the aggregate liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accumulated and unpaid Distributions to the date
upon which the voting percentages are determined) of all outstanding Securities
of the relevant class.
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"Termination Event" shall have the meaning set forth in
Section 1.1 of the Purchase Contract Agreement.
"Treasury PEPS Units" shall mean a PEPS Units with respect to
which Treasury Securities have been substituted for the Preferred Securities or
Applicable Ownership Interest of the Treasury Portfolio component, as
applicable.
"Treasury Portfolio" shall mean, with respect to the
Applicable Principal Amount of Senior Deferrable Notes, a portfolio of
zero-coupon U.S. treasury securities consisting of (i) principal or interest
strips of U.S. treasury securities that mature on or prior to the Purchase
Contract Settlement Date in an aggregate amount at maturity equal to the
Applicable Principal Amount and (ii) with respect to each scheduled interest
payment date on the Senior Deferrable Notes that occurs after the Tax Event
Redemption Date, principal or interest strips of U.S. treasury securities that
mature on or prior to such date in an aggregate amount at maturity equal to the
aggregate interest payment that would have been due on the Applicable Principal
Amount of the Senior Deferrable Notes on such date.
"Treasury Portfolio Purchase Price" shall mean the lowest
aggregate price quoted by a Primary Treasury Dealer, to the Quotation Agent on
the third Business Day preceding the Tax Event Redemption Date for the purchase
of the Treasury Portfolio for settlement the Tax Event Redemption Date.
"Treasury Regulations" shall mean the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by the
United States Department of the Treasury, as such regulations may be amended
from time to time (including corresponding provisions of succeeding
regulations).
"Treasury Securities" shall mean zero-coupon U.S. Treasury
Securities (CUSIP Number 912820BG1) with a principal amount at maturity equal to
$1,000 and maturing on August 15, 2003, the business day preceding the Purchase
Contract Settlement Date.
"Trust" shall have the meaning specified in the Recitals
hereto.
"Trust Enforcement Event" in respect of the Securities shall
mean that an Indenture Event of Default has occurred and is continuing in
respect of the Senior Deferrable Notes.
"Trust Indenture Act" shall mean the Trust Indenture Act of
1939, as amended from time to time, or any successor legislation.
"Trustee" or "Trustees" shall mean each Person that has signed
this Declaration as a trustee, so long as such Person continues in office in
accordance with the terms hereof, and all other Persons that from time to time
may 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.
"Two-Year Benchmark Treasury Rate" shall mean the bid side
rate displayed at 10:00 A.M., New York City time, on the third Business Day
immediately preceding the Purchase
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Contract Settlement Date for direct obligations of the United States (which may
be obligations traded on a when-issued basis only) having a maturity comparable
to the remaining term to maturity of the Senior Deferrable Notes, as agreed upon
by the Company and the Remarketing Agent in the Telerate system (or if the
Telerate system is (a) no longer available on the third Business Day immediately
preceding the Purchase Contract Settlement Date or (b) in the opinion of the
Remarketing Agent (after consultation with the Company) no longer an appropriate
system from which to obtain such rate, such other nationally recognized
quotation system as, in the opinion of the Remarketing Agent (after consultation
with the Company) is appropriate. If such rate is not so displayed, the rate for
the Two-Year Benchmark Treasury Rate shall be, as calculated by the Remarketing
Agent, the yield to maturity for the Preferred Securities, expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and applied
on a daily basis, and computed by taking the arithmetic mean of the secondary
market bid rates, as of 10:30 A.M., New York City time, on the third Business
Day immediately preceding the Purchase Contract Settlement Date of three leading
United States government securities dealers selected by the Remarketing Agent
(after consultation with the Company) (which may include the Remarketing Agent
or an affiliate thereof).
"United States Person" shall mean a United States person for
United States federal income tax purposes.
"Underwriting Agreement" shall mean the Underwriting Agreement
dated as of June 22, 2000 among the Trust, the Sponsor and Morgan Stanley & Co.
Incorporated, Credit Suisse First Boston Corporation, J. P. Morgan Securities
Inc. and BMO Nesbitt Burns Corp., as representatives of the several underwriters
named therein.
ARTICLE 2: 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, to the
extent applicable, shall be governed by such provisions.
(b) The Property Trustee shall be the only Trustee that is a trustee
for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
conflicts with the duties imposed by Sections 310 to 317, inclusive, of the
Trust Indenture Act, such imposed duties of the Trust Indenture Act shall
control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the Trust's classification as a grantor trust for United States
federal income tax purposes and shall not affect the nature of the Securities as
equity securities representing undivided beneficial interests in the assets of
the Trust.
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SECTION 2.2 Lists of Holders of the Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Property Trustee a list of the names and addresses of the
Holders of the Securities in such form as the Property Trustee may reasonably
require ("List of Holders") (i) as of the record date relating to the payment of
any Distribution, at least one Business Day prior to the date for payment of
such Distribution, except while the Preferred Securities are represented by one
or more Global Securities, and (ii) at any other time, within 30 days of receipt
by the Trust of a written request from the Property Trustee for a List of
Holders as of a date no more than 15 days before such List of Holders is
provided to the Property Trustee. If at any time the List of Holders does not
differ from the most recent List of Holders provided to the Property Trustee by
the Sponsor and the Regular Trustees on behalf of the Trust, then neither the
Sponsor nor the Regular Trustees shall be obligated to deliver such List of
Holders. The Property Trustee shall preserve, in as current a form as is
reasonably practicable, all information contained in Lists of Holders provided
to it or that it receives in its capacity as Paying Agent (if acting in such
capacity); provided that the Property Trustee may destroy any List of Holders
previously provided to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under, and
shall be entitled to the benefits of, Sections 311(a), 311(b) and 312(b) of the
Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after June 15 of each year (commencing with the
year of the first anniversary of the issuance of the Preferred Securities), the
Property Trustee shall provide to the Holders of the Preferred Securities such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Property Trustee also shall comply with the requirements of Section 313(d)
of the Trust Indenture Act. The Sponsor shall promptly notify the Property
Trustee when any Preferred Securities are listed for trading on any stock
exchange and any delisting thereof.
SECTION 2.4 Periodic Reports to the Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee such documents, reports and
information as required by Section 314 of the Trust Indenture Act (if any) and
the compliance certificate required by Section 314 of the Trust Indenture Act in
the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act. Compliance certificates required by Section 314(a)(4) of the
Trust Indenture Act shall be delivered to the Property Trustee annually on or
before 120 days after the end of each fiscal year of the Sponsor.
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 Property 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 Section 314(c) of the
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Trust Indenture Act. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.
SECTION 2.6 Trust Enforcement Events; Waiver.
(a) The Holders of a Majority in Liquidation Amount of the Preferred
Securities may waive, by vote or written consent, on behalf of the Holders of
all of the Preferred Securities, any past Trust Enforcement Event in respect of
the Preferred Securities and its consequences, provided that if the underlying
Indenture Event of Default:
(i) is not waivable under the Indenture, then the Trust
Enforcement Event under this Declaration also shall not be waivable;
and
(ii) requires the vote or consent of the holders of greater
than a majority in principal amount of the Senior Deferrable Notes (a
"Supermajority") to be waived under the Indenture, the related Trust
Enforcement Event under this Declaration only may be waived by the vote
or written consent of the Holders of at least the same Supermajority in
aggregate stated liquidation amount of the Preferred Securities
outstanding.
The foregoing provisions of this Section 2.6 shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act, and Section 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
Trust Enforcement Event in respect of the Preferred Securities shall be deemed
to have been cured for every purpose of this Declaration and the Preferred
Securities, but no such waiver shall extend to any subsequent or other Trust
Enforcement Event with respect to the Preferred Securities or impair any right
consequent thereon. Any waiver by the Holders of the Preferred Securities of a
Trust Enforcement Event with respect to the Preferred Securities also shall be
deemed to constitute a waiver by the Holders of the Common Securities of any
such Trust Enforcement Event 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 the Common Securities may waive, by vote or written
consent, any past Trust Enforcement Event in respect of the Common Securities
and its consequences, provided that if the underlying Indenture Event of Default
is not waivable under the Indenture, then, except where the Holders of the
Common Securities have been deemed to have waived such Trust Enforcement as
provided below in this Section 2.6(b), the related Trust Enforcement Event under
this Declaration also shall not be waivable. The Holders of the Common
Securities shall be deemed to have waived any and all Trust Enforcement Events
in respect of the Common Securities and the consequences thereof until all Trust
Enforcement Events in respect of the Preferred Securities have been cured,
waived or otherwise eliminated. Until all Trust Enforcement Events in respect of
the Preferred Securities have been so cured, waived or otherwise eliminated, the
Property Trustee shall be deemed to be acting solely on behalf of the Holders of
the Preferred Securities, and only the Holders of the Preferred Securities shall
have the right to direct the Property Trustee. The foregoing provisions of this
Section 2.6(b) shall be in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act, and Sections 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
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foregoing provisions of this Section 2.6(b), upon such cure, waiver or other
elimination, any Trust Enforcement Event in respect of the Common Securities
shall be deemed to have been cured for every purpose of this Declaration and the
Common Securities, but no such waiver shall extend to any subsequent or other
Trust Enforcement Event with respect to the Common Securities or impair any
right consequent thereon.
(c) A waiver of an Indenture Event of Default under the Indenture by
the Property Trustee at the direction of the Holders of the Preferred Securities
shall constitute a waiver of the corresponding Trust Enforcement Event under
this Declaration. Any such waiver by the Holders of the Preferred Securities
also shall be deemed to constitute a waiver by the Holders of the Common
Securities of any such Trust Enforcement Event 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. The foregoing provisions of
this Section 2.6(c) shall be in lieu of Section 316(a)(1)(B) of the Trust
Indenture Act, and Section 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 Trust Enforcement Event; Notice.
(a) Within 90 days after the occurrence of a Trust Enforcement Event
actually known to a Responsible Officer of the Property Trustee, the Property
Trustee shall transmit by mail, first class postage prepaid, to the Holders of
the Securities, notice of such Trust Enforcement Event, unless such Trust
Enforcement Event has been cured before the giving of such notice; provided
that, except for a default in the payment of principal of (or premium, if any)
or interest on any of the Senior Deferrable Notes, the Property Trustee shall be
protected in withholding such notice if and so long as a Responsible Officer of
the Property Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of any
Trust Enforcement Event except for:
(i) a default under Section 501(1) and (2) of the Indenture;
or
(ii) any default as to which the Property Trustee shall have
received written notice or of which a Responsible Officer of the
Property Trustee charged with the administration of this Declaration
shall have actual knowledge.
ARTICLE 3: ORGANIZATION
SECTION 3.1 Name and Organization.
The Trust hereby continued is named "VEC Trust I," as such
name may be modified from time to time by the Regular Trustees following written
notice to the Holders of the Securities. The Trust's activities may be conducted
under the name of the Trust or any other name deemed advisable by the Regular
Trustees.
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SECTION 3.2 Office.
The address of the principal office of the Trust is One Valero
Place, San Antonio, Texas 78212. On ten Business Days' written notice to the
Holders of the 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 the Securities, (b) to use the gross proceeds from such sale to
acquire the Senior Deferrable Notes and (c) except as otherwise limited herein,
to engage in only those other activities necessary or incidental thereto. The
Trust shall not borrow money, issue debt, 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 as a
grantor trust for United States federal income tax purposes.
By the acceptance of this Trust, none of the Trustees, the
Sponsor, the Holders of the Preferred Securities or the Common Securities or the
Beneficial Owners of the Preferred Securities will take any position that is
contrary to the classification of the Trust as a grantor trust for United State
federal income tax purposes.
SECTION 3.4 Authority.
(a) Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Regular Trustees shall have
exclusive authority to carry out the purposes of the Trust. Any action taken by
the Regular Trustees in accordance with their powers shall constitute the act of
and shall serve to bind the Trust, and any action taken by the Property Trustee
in accordance with its powers shall constitute the act of and shall 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.
(b) 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.
(c) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee may delegate to any other natural person over the age of 21, by power of
attorney consistent with applicable law, his or her power for the purposes of
signing any documents that the Regular Trustees have power and authority to
cause the Trust to execute pursuant to Section 3.6.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Senior
Deferrable Notes and the Property Account or as otherwise provided in this
Declaration, legal title to all assets of the
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Trust shall be vested in the Trust. The Holders of the Securities shall not have
legal title to any part of the assets of the Trust but shall have undivided
beneficial ownership interests 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 that the Trust may issue no more than one series of
Preferred Securities and 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 the Securities shall be limited to a one-time,
simultaneous issuance of both Preferred Securities and Common Securities on the
Closing Date, subject to the issuance of additional Securities pursuant to the
exercise of any Over-allotment Option;
(b) to acquire the Senior Deferrable Notes with the proceeds of the
sale of the Securities; provided that the Regular Trustees shall cause legal
title to the Senior Deferrable Notes to be held of record in the name of the
Property Trustee for the benefit of the Holders of the Securities;
(c) to give the Sponsor and the Property Trustee prompt written notice
of the occurrence of a Tax Event; provided that the Regular Trustees shall
consult with the Sponsor and the Property Trustee before taking or refraining
from taking any action in relation to any such Tax Event;
(d) to establish a record date with respect to all actions to be taken
hereunder that require a record date to be established, including and with
respect to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of the Securities as to such actions and applicable
record dates;
(e) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of this Declaration;
(f) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(g) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants to conduct only those services that the Regular Trustees have
authority to conduct directly, and to pay reasonable compensation for such
services, provided that any Person so employed or engaged is a United States
Person;
(h) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(i) to give to the Property Trustee the certificate required by Section
314(a)(4) of the Trust Indenture Act, which certificate may be executed by any
Regular Trustee;
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(j) to incur expenses that are necessary or incidental to carry out any
of the purposes of the Trust;
(k) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(l) to take all action that may be necessary or appropriate for the
preservation and continuation of the Trust's valid existence, rights, franchise
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 Securities or to enable the
Trust to effect the purposes for which it was created;
(m) to take any action not inconsistent with applicable law that the
Regular Trustees determine in their discretion to be necessary or desirable in
carrying out the purposes and functions of the Trust as set forth in Section 3
or the activities of the Trust as set forth in this Section 3.6, including:
(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 as a grantor trust for
United States federal income tax purposes; and
(iii) cooperating with the Senior Deferrable Notes Issuer to
ensure that the Senior Deferrable Notes will be treated as indebtedness
of the Senior Deferrable Notes Issuer for United States federal income
tax purposes;
(n) 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;
(o) to prepare, execute and file a certificate of cancellation of the
Certificate of Trust of the Trust pursuant to Section 8.1(b);
(p) in connection with the issuance of the Preferred Securities, to
execute, deliver and perform the Depositary Agreement on behalf of the Trust;
(q) if and to the extent that the Sponsor on behalf of the Trust has
not already done so, to cause the Trust to enter into the Underwriting Agreement
and/or such other agreements and arrangements as may be necessary or desirable
in connection with the sale of the Preferred Securities to the initial
purchasers thereof and the consummation thereof, and to take all action, and
exercise all discretion, as may be necessary or desirable in connection with the
consummation thereof; and
(r) 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.
The Regular Trustees shall 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
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Regular Trustees shall have no power to, and 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 Property 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 Senior Deferrable Notes Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the Property
Trustee) shall cause the Trust not to, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust shall not
and the Trustees (including the Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust in connection
with its ownership of the Senior Deferrable Notes, but the Property
Trustee shall distribute all such proceeds to the Holders of the
Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess property for any purpose 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's assets;
(vi) possess any power or otherwise act in such a way as to
vary the terms of the Securities in any way whatsoever (except to the
extent expressly authorized in this Declaration or by the terms of the
Securities);
(vii) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities;
(viii) other than as provided in this Declaration, (A) direct
the time, method and place of exercising any trust or power conferred
upon the Indenture Trustee with respect to the Senior Deferrable Notes,
(B) waive any past default that is waivable under the Indenture, (C)
exercise a right to rescind or annul any declaration that the principal
of all the Senior Deferrable Notes shall be due and payable or (D)
consent to any amendment, modification or termination of the Indenture
or the Senior Deferrable Notes where such consent is required, unless
the Trust has received an opinion of counsel to the effect that such
modification will not cause more than an insubstantial increase in the
risk that the Trust will not be classified as a grantor trust for
United States federal income tax purposes;
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(ix) take any action inconsistent with the status of the Trust
as grantor trust for United States federal income tax purposes;
(x) revoke any action previously authorized or approved by
vote of the Holders of the Preferred Securities; or
(xi) after the date hereof, enter into any contract or
agreement (other than any depositary agreement or any agreement with
any securities exchange or automated quotation system) that does not
expressly provide that the Holders of Preferred Securities, in their
capacities as such, have limited liability (in accordance with the
provisions of the Business Trust Act) for the liabilities and
obligations of the Trust, which express provision shall be in
substantially the following form:
The Holders of the Preferred Securities, in their capacities
as such, shall not be personally liable for any liabilities or
obligations of the Trust arising out of this Agreement, and
the parties hereto hereby agree that the Holders of the
Preferred Securities, in their capacities as such, shall be
entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Senior Deferrable Notes shall be owned by
and held of record in the name of the Property Trustee in trust for the benefit
of the Trust and the Holders of the Securities. The right, title and interest of
the Property Trustee to the Senior Deferrable Notes shall vest automatically in
each Person that hereafter may be appointed as Property Trustee in accordance
with Section 6.6. To the fullest extent permitted by law, such vesting and
cessation of title shall be effective whether or not conveyancing documents with
regard to the Senior Deferrable Notes have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Senior Deferrable Notes to the Regular Trustees nor to the
Delaware Trustee (if the Property Trustee does not also act as Delaware
Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders of
the Securities and, upon the receipt of payments of funds made in
respect of the Senior Deferrable Notes, deposit such funds into the
Property Account and make payments to the Holders of the Securities
from the Property Account in accordance with Section 7.2. Funds in the
Property Account shall be held uninvested until disbursed in accordance
with this Declaration. The Property Account shall be an account that is
maintained with a banking institution, the rating on whose long-term
unsecured indebtedness is at least equal to the rating assigned to the
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Company's senior notes by a "nationally recognized statistical rating
organization" within the meaning 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 Senior Deferrable Notes are redeemed or mature;
(iii) upon written direction by the Sponsor to dissolve the
Trust, to engage in such ministerial activities as shall be necessary
or appropriate to effect the distribution of the Senior Deferrable
Notes to the Holders of the Securities in exchange for the Securities;
and
(iv) be a United States Person.
(d) The Property Trustee shall take all actions and perform such duties
as may be specifically required of the Property Trustee pursuant to the terms of
this Declaration and the Securities.
(e) The Property Trustee shall take any Legal Action that arises out of
or in connection with (i) a Trust Enforcement Event of which a Responsible
Officer of the Property Trustee has actual knowledge or (ii) the Property
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act; provided that if a Trust Enforcement Event has occurred and is continuing
and such event is attributable to the failure of the Senior Deferrable Notes
Issuer to pay interest or principal on the Senior Deferrable Notes on the date
such interest or principal is otherwise payable (or in the case of redemption,
on the redemption date), then a Holder of Preferred Securities may institute a
proceeding directly against the Senior Deferrable Notes Issuer to enforce
payment to such Holder of the principal or interest on Senior Deferrable Notes
having an aggregate principal amount equal to the aggregate liquidation amount
of the Preferred Securities of such Holder (a "Direct Action"). In connection
with such Direct Action, the Senior Deferrable Notes Issuer will be subrogated
to the rights of such Holder of Preferred Securities to the extent of any
payment made by the Senior Deferrable Notes Issuer to such Holders of Preferred
Securities in such Direct Action.
(f) The Property Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds
of the liquidation have been distributed to the Holders of the
Securities pursuant to the terms of the Securities; or
(ii) a Successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 6.6.
(g) The Property Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a holder of Senior Deferrable Notes under
the Indenture and, if a Trust Enforcement Event actually known to a Responsible
Officer of the Property Trustee occurs and is continuing, the Property Trustee
shall enforce, for the benefit of Holders of the Securities, its rights as
holder of the Senior Deferrable Notes subject to the rights of the Holders of
the Securities pursuant to the terms of such Securities.
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(h) The Property Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all Securities, and any such
Paying Agent shall comply with Section 317(b) of the Trust Indenture Act. Any
Paying Agent may be removed by the Property Trustee at any time, and a successor
Paying Agent or additional Paying Agents may be appointed at any time by the
Property Trustee.
(i) Subject to this Section 3.8, the Property Trustee shall have none
of the duties, liabilities, powers or the authority of the Regular Trustees set
forth in Section 3.6.
The Property Trustee shall exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Property Trustee shall have no power
to, and shall not, take any action that is inconsistent with the purposes and
functions of the Trust set out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Property
Trustee.
(a) The Property Trustee, before the occurrence of any Trust
Enforcement Event and after the cure or waiver of all Trust Enforcement Events
that may have occurred, shall undertake to perform only such duties as are
specifically set forth in this Declaration, and no implied covenants shall be
read into this Declaration against the Property Trustee. If a Trust Enforcement
Event has occurred (that has not been cured or waived pursuant to Section 2.6)
of which a Responsible Officer of the Property Trustee has actual knowledge, the
Property Trustee shall exercise such of the rights and powers vested in it by
this Declaration and shall use the same degree of care and skill in its 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
Property Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of a Trust Enforcement Event and
after the cure or waiver of all such Trust Enforcement Events that may
have occurred:
(A) the duties and obligations of the Property
Trustee shall be determined solely by the
express provisions of this Declaration, and
the Property Trustee shall not be liable
except for the performance of such duties
and obligations as are specifically set
forth in this Declaration, and no implied
covenants or obligations shall be read into
this Declaration against the Property
Trustee; and
(B) in the absence of bad faith on the part of
the Property Trustee, the Property Trustee
may conclusively rely, as to the truth of
the statements and the correctness of the
opinions expressed therein, upon any
certificates or opinions furnished to the
Property Trustee and conforming to the
requirements of this Declaration; but in the
case of any such certificates or opinions
that by any provision
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hereof are specifically required to be
furnished to the Property Trustee, the
Property Trustee shall be under a duty to
examine such certificates or opinions to
determine whether or not they conform to the
requirements of this Declaration (but need
not confirm or investigate the accuracy of
mathematical calculations or other facts
stated therein);
(ii) the Property Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer
of the Property Trustee, unless it has been proven that the
Property Trustee was negligent in ascertaining the pertinent
facts;
(iii) the Property Trustee shall not be liable with
respect to any action taken or omitted to be taken by it
without negligence, in good faith in accordance with the
direction of the Holders of not less than a Majority in
Liquidation Amount of the Securities relating to the time,
method and place of conducting any proceeding for any remedy
available to the Property Trustee, or exercising any trust or
power conferred upon the Property Trustee under this
Declaration;
(iv) no provision of this Declaration shall require
the Property Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of
its rights or powers, if it has reasonable grounds for
believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration
or indemnity reasonably satisfactory to the Property Trustee
against such risk or liability is not reasonably assured to
it;
(v) the Property Trustee's sole duty with respect to
the custody, safe-keeping and physical preservation of the
Senior Deferrable Notes and the Property Account shall be to
deal with such property in a similar manner as the Property
Trustee deals with similar property for its own account,
subject to the protections and limitations on liability
afforded to the Property Trustee under this Declaration and
the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or
liability for or with respect to the value, genuineness,
existence or sufficiency of the Senior Deferrable Notes or the
payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Property Trustee shall not be liable for
any interest on any money received by it except as it
otherwise may agree with the Sponsor. Money held by the
Property Trustee need not be segregated from other funds held
by it except in relation to the Property Account maintained by
the Property Trustee pursuant to Section 3.8(c)(i) and except
to the extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible
for monitoring the compliance by the Regular Trustees or the
Sponsor with their respective duties under this Declaration,
nor shall the Property Trustee be liable for any default or
misconduct of the Regular Trustees or the Sponsor.
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SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) The Property Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties.
(ii) Any direction or act of the Sponsor contemplated by this
Declaration shall be sufficiently evidenced by an Officers'
Certificate.
(iii) Whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder,
the Property Trustee (unless other evidence is herein specifically
prescribed) may request, in the absence of bad faith on its part, and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor.
(iv) The Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or registration thereof.
(v) The Property Trustee may consult with counsel of its
choice or other experts, and the advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope of
such experts' area of expertise shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion. Such counsel may be counsel to the Sponsor or any of
its Affiliates and may include any of its employees. The Property
Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of
competent jurisdiction.
(vi) The Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration
at the request or direction of any Holder of Securities, unless such
Holder of Securities has provided to the Property Trustee security and
indemnity, reasonably satisfactory to the Property Trustee, against the
costs, expenses (including attorneys' fees and expenses and the
expenses of the Property Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such request
or direction, including such reasonable advances as may be requested by
the Property Trustee; provided that nothing contained in this Section
3.10(a) shall be taken to relieve the Property Trustee, upon the
occurrence of an Indenture Event of Default, of its obligation to
exercise the rights and powers vested in it by this Declaration.
(vii) The Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion,
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report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but
the Property Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it sees fit, and, if the
Trustee shall determine to make such further inquiry or investigation,
it shall be entitled to examine the books, records and premises of the
Sponsor, personally or by agent or attorney at the sole cost of the
Sponsor and shall incur no liability or additional liability of any
kind by reason of such inquiry or investigation.
(viii) The Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents, custodians, nominees or attorneys, provided that any
such action (other than ministerial action) executed or performed by
such agent or attorney is executed or performed by an agent or an
attorney that is a United States Person, and the Property Trustee shall
not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder.
(ix) Any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and
the signature of the Property Trustee or its agents alone shall be
sufficient and effective to perform any such action, and no third party
shall be required to inquire as to the authority of the Property
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be evidenced
conclusively by the Property Trustee's or its agent's taking such
action.
(x) Whenever in the administration of this Declaration the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Property Trustee (A) may request instructions from the
Holders of the Securities, which instructions only may be given by the
Holders of the same proportion in liquidation amount of the Securities
as would be entitled to direct the Property Trustee under this
Declaration in respect of such remedy, right or action, (B) may refrain
from enforcing such remedy or right or taking such other action until
such instructions are received and (C) shall be protected in
conclusively relying on or acting in accordance with such instructions.
(xi) Except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Declaration.
(xii) The Property Trustee shall not be liable for any action
taken, suffered or omitted to be taken by it without negligence, in
good faith and reasonably believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose any duty
or obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to
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perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other
than Section 6.2, the Delaware Trustee shall not be entitled to exercise any
powers of, nor shall the Delaware Trustee have any of the duties and
responsibilities of, the trustees described in this Declaration. Except as set
forth in Section 6.2, the Delaware Trustee shall be a Trustee for the sole and
limited purpose of fulfilling the requirements of Section 3807(a) of the
Business Trust Act and shall be a United States Person. If the Property Trustee,
meeting the requirements of Section 6.2, also acts as Delaware Trustee, this
Section 3.11 shall not apply.
SECTION 3.12 Execution of Documents.
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 that the Regular Trustees have the power and authority to
execute pursuant to Section 3.6.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this 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, the Securities, the Senior Deferrable Notes or the Indenture.
SECTION 3.14 Duration of Trust.
The Trust shall exist until dissolved pursuant to the
provisions of Article 8 hereof.
SECTION 3.15 Mergers.
(a) The Trust may not consolidate with, convert into, amalgamate or
merge with or into, 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) or Section 8.2.
(b) At the request of the Sponsor and 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 Preferred Securities, the Delaware
Trustee or the Property Trustee, the Trust may consolidate with, convert into,
amalgamate or merge with or into, be replaced by or convey, transfer or lease
its properties substantially as an entirety to a trust organized as such under
the laws of any state; provided that:
(i) if the Trust is not the successor entity, such successor
entity (the "Successor Entity") either:
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(A) expressly assumes all of the obligations of
the Trust with respect to the Securities; or
(B) substitutes for the Securities other
securities having substantially the same
terms as the Securities (the "Successor
Securities"), so long as such Successor
Securities rank the same as the Securities
with respect to Distributions and payments
upon liquidation, redemption and otherwise;
(ii) the Senior Deferrable Notes Issuer expressly appoints a
trustee of such Successor Entity that possesses the same powers and
duties as the Property Trustee as the holder of the Senior Deferrable
Notes;
(iii) the Preferred Securities or any Successor Securities are
or, upon notification of issuance will be, listed on any national
securities exchange or with any other organization on which the
Preferred Securities are then listed or quoted;
(iv) such consolidation, conversion, amalgamation, merger,
replacement, conveyance, transfer or lease does not cause the Preferred
Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization;
(v) such consolidation, conversion, amalgamation, merger,
replacement, conveyance, transfer or lease does not adversely affect
the rights, preferences and privileges of the Holders of the Preferred
Securities (including any Successor Securities) in any material
respect;
(vi) such Successor Entity has a purpose substantially
identical to that of the Trust;
(vii) prior to such consolidation, conversion, amalgamation,
merger, replacement, conveyance, transfer or lease, the Sponsor has
received an opinion of independent counsel to the Trust experienced in
such matters to the effect that:
(A) such consolidation, conversion,
amalgamation, merger, replacement,
conveyance, transfer or lease does not
adversely affect the rights, preferences and
privileges of the Holders of the Securities
(including any Successor Securities) in any
material respect;
(B) following such consolidation, conversion,
amalgamation, merger, replacement,
conveyance, transfer or lease, neither the
Trust nor such Successor Entity will be
required to register as an Investment
Company under the Investment Company Act;
and
(C) following such consolidation, conversion,
amalgamation or merger, replacement,
conveyance, transfer or lease, the Trust (or
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such Successor Entity) will continue to be
classified as a grantor trust for United
States federal income tax purposes;
(viii) the Sponsor or any permitted successor or assignee owns
all of the common securities of such Successor Entity and guarantees
the obligations of such Successor Entity under the Successor
Securities, at least to the extent provided by the Guarantee; and
(ix) such Successor Entity expressly assumes all of the
obligations of the Trust.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in aggregate liquidation amount of the
Securities, consolidate with, convert into, amalgamate or merge with or into, be
replaced by or convey, transfer or lease its properties and assets substantially
as an entirety to, any other entity or permit any other entity to consolidate
with, amalgamate, merge with or into, or replace it, if such consolidation,
conversion, amalgamation, merger, replacement, conveyance, transfer or lease
would cause the Trust or any successor Entity to be classified as other than a
grantor trust for United States federal income tax purposes or would cause each
Holder of Securities not to be treated as owning an undivided beneficial
ownership interest in the Senior Deferrable Notes.
SECTION 3.16 Compensation and Reimbursement.
The Sponsor agrees to pay each of the Trustees from time to
time such compensation for all services rendered by such Trustee hereunder as
the Sponsor and such Trustee may agree upon from time to time (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust). To the fullest extent permitted
by law the parties intend that Section 3561 of Title 12 of the Delaware Code
shall not apply to the Trust and that compensation paid pursuant to this Section
3.16 not be subject to review by any court under Section 3560 of Title 12 of the
Delaware Code.
SECTION 3.17 Property Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other similar judicial proceeding relative to the Trust or any other obligor
upon the Securities or the property of the Trust or of such other obligor or
their creditors, the Property Trustee (irrespective of whether any Distributions
on the Securities are then due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee has
made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any Distributions
owing and unpaid in respect of the Securities (or, if the Securities are
original issue discount securities, such portion of the liquidation amount as
may be specified in the terms of such securities) and to file such other papers
or documents as may be necessary or advisable in order to have the claims of the
Property Trustee (including any claim for the reasonable compensation, expenses,
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disbursements and advances of the Property Trustee, its agents and counsel) and
of the Holders of the Securities allowed in such judicial proceeding; and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities to make such payments to the Property Trustee and, in
the event the Property Trustee consents to the making of such payments directly
to the Holders, to pay to the Property Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Property
Trustee, its agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property
Trustee to authorize or consent to or accept or adopt, on behalf of any Holder
of Securities, any plan of reorganization, arrangement, adjustment or
compensation affecting the Securities or the rights of any Holder thereof or to
authorize the Property Trustee to vote in respect of the claim of any Holder of
Securities in any such proceeding.
SECTION 3.18 Registration Statement and Related Matters.
In accordance with the Original Declaration, the Sponsor was
authorized (a) to prepare and file with the Commission and execute, in each case
on behalf of the Trust, (i) a Registration Statement on Form S-3 (Registration
Nos. 333-33846, 333-33846-01 and 333-33846-02) (the "1933 Act Registration
Statement"), including any pre-effective or post-effective amendments thereto,
relating to the registration under the Securities Act of the Preferred
Securities and certain other securities of the Sponsor and (ii) if the Sponsor
deemed it desirable, a Registration Statement on Form 8-A (the "1934 Act
Registration Statement"), including all pre-effective and post-effective
amendments thereto, relating to the registration of the Preferred Securities
under Section 12 of the Exchange Act; (b) if the Sponsor deemed it desirable, to
prepare and file with New York Stock Exchange, Inc. or any other automated
quotation system, exchange or over-the-counter market (collectively, the
"Exchanges") and execute on behalf of the Trust a listing application or
applications and all other applications, statements, certificates, agreements
and other instruments as shall be necessary or desirable to cause the Preferred
Securities to be listed on any Exchange; (c) to prepare and file and execute on
behalf of the Trust such applications, reports, surety bonds, irrevocable
consents, appointments of attorney for service of process and other papers and
documents as the Sponsor, on behalf of the Trust, deemed necessary or desirable
to register the Preferred Securities under the securities or "Blue Sky" laws of
such jurisdictions as the Sponsor, on behalf of the Trust, deemed necessary or
desirable; (d) to negotiate the terms of and execute on behalf of the Trust the
Underwriting Agreement; and (e) to execute and deliver on behalf of the Trust
letters or documents to, or instruments for filing with, the Clearing Agency
relating to the Preferred Securities. In the event that any filing referred to
in clauses (a)-(c) above is required by the rules and regulations of the
Commission, any Exchange, the National Association of Securities Dealers, Inc.
or state securities or blue sky laws, to be executed on behalf of the Trust by
the Regular Trustees, the Regular Trustees, in their capacities as Trustee of
the Trust, are hereby authorized to join in any such filing and to execute on
behalf of the Trust any and all of the foregoing. In connection with
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all of the foregoing, each Regular Trustee, solely in its capacity as Trustee of
the Trust, has constituted and appointed, and hereby confirms the appointment
of, Jay D. Browning, John D. Gibbons and Donna M. Titzman, and each of them, as
his, her or its, as the case may be, true and lawful attorneys-in-fact, and
agents, with full power of substitution and resubstitution, for such Trustee or
in such Trustee's name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to the 1933 Act
Registration Statement and the 1934 Act Registration Statement and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as such Trustee might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his or her substitute or substitutes, may lawfully do or cause to be done by
virtue hereof. Notwithstanding anything in this Section 3.18 to the contrary, no
Foreign Person (acting in its capacity as attorney-in-fact or agent of any
Foreign Person) shall be authorized to take or perform any action on behalf of
the Trust pursuant to this Section 3.18 at any time on or after the Closing
Date.
SECTION 3.19 Books and Records.
The books and records of the Trust will be maintained at the
principal office of the Trust and will be open for inspection by each Holder of
Preferred Securities or any authorized representative of such Holder for any
purpose reasonably related to the Holder's interest in the Trust during normal
business hours.
ARTICLE 4: THE SPONSOR
SECTION 4.1 Responsibilities of the Sponsor.
In connection with the sale and issuance of the Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare, execute and file with the Commission, on behalf of the
Trust, a registration statement on Form S-3 in relation to the Preferred
Securities, including any amendments or supplements thereto, and to take any
other action relating to the registration and sale of the Preferred Securities
under federal and state securities laws;
(b) if necessary, to determine the states in which to take appropriate
action to qualify or register for sale all or part of the PEPS Units and to do
any and all such acts, other than actions that must be taken by the Trust, and
advise the Trust of actions it must take; to prepare, execute and file, on
behalf of the Trust, any documents it deems necessary or advisable in order to
comply with the applicable laws of any such states; and to prepare, execute and
file, on behalf of the Trust, any such documents or take any acts determined by
it to be necessary in order to qualify or register all or part of the PEPS Units
in any state in which it has determined to qualify or register such PEPS Units
for sale;
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(c) if necessary, to prepare, execute and file on behalf of 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 Preferred Securities;
(d) if necessary, to prepare, execute and file with the Commission, on
behalf of the Trust, a registration statement on Form 8-A relating to the
registration of the Preferred Securities under Section 12 of the Exchange Act,
including any amendments thereto; and
(e) to negotiate the terms of, and execute and enter into, an
Underwriting Agreement providing for the sale of the PEPS Units and a
Remarketing Agreement providing for the Remarketing.
SECTION 4.2 Indemnification and Expenses of the Trustees.
To the fullest extent permitted by law, the Sponsor, in its
capacity as Senior Deferrable Notes Issuer, agrees to indemnify the Regular
Trustees, the Property Trustee and the Delaware Trustee for, and to hold each of
them harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Regular Trustees, the Property
Trustee or the Delaware Trustee, as the case may be, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending any of them against any
claim (whether asserted by the Sponsor, a Holder or any other Person) or
liability in connection with the exercise or performance of any of their
respective powers or duties hereunder. The provisions of this Section 4.2 shall
survive the resignation or removal of the Regular Trustees, the Delaware Trustee
or the Property Trustee and the termination of this Declaration.
ARTICLE 5: THE HOLDERS OF THE COMMON SECURITIES
SECTION 5.1 Senior Deferrable Notes Issuer's Purchase of the Common
Securities.
On the Closing Date, the Senior Deferrable Notes Issuer shall
purchase all of the Common Securities issued by the Trust, in an aggregate
liquidation amount equal to at least three percent of the total capital of the
Trust, at such time as the Preferred Securities are sold and issued. If any
additional Preferred Securities are issued pursuant to the exercise of any
Over-allotment Option, then the Senior Deferrable Notes Issuer shall purchase,
on the date of such issuance, an amount of additional Common Securities such
that the aggregate number of Common Securities held by the Senior Deferrable
Notes Issuer, upon such purchase, will equal at least three percent of the total
capital of the Trust.
The aggregate stated liquidation amount of the Common
Securities outstanding at any time shall not be less than three percent of the
total capital of the Trust.
SECTION 5.2 Covenants of the Senior Deferrable Notes Issuer.
For so long as the Preferred Securities remain outstanding,
the Senior Deferrable Notes Issuer shall covenant (i) to maintain, directly or
indirectly, 100% ownership of the Common Securities, (ii) to cause the Trust to
remain a statutory business trust and not to
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voluntarily dissolve, wind up, liquidate or be terminated, except as permitted
by this Declaration, (iii) to use its commercially reasonable efforts to ensure
that the Trust will not be an Investment Company required to be registered under
the Investment Company Act and (iv) not to take any action that would be
reasonably likely to cause the Trust to be classified as an association or a
publicly traded partnership taxable as a corporation for United States federal
income tax purposes.
SECTION 5.3 Holder of the Common Securities.
Each Holder of the Common Securities shall at all times hold
the Common Securities in its individual capacity on its own behalf and shall
not, in its capacity as a Holder of the Common Securities, be under (or subject
to) the control or direction of any Foreign Person (pursuant to a contractual
arrangement or otherwise) other than by virtue of such Foreign Person's direct
or indirect stock ownership, if any, of the Holder of Common Securities.
Notwithstanding anything in this Declaration to the contrary, each Holder of the
Common Securities shall at all times be a United States Person and shall be
authorized to give any direction hereunder with respect to the Trust as shall be
necessary for the Trust not to be considered a foreign trust for United States
Federal income tax purposes.
SECTION 5.4 Exchanges.
(a) If at any time the Senior Deferrable Notes Issuer or any of its
Affiliates (in either case, a "Issuer Affiliated Holder") is the Holder of any
Preferred Securities, such Issuer Affiliated Holder shall have the right to
deliver to the Property Trustee all or such portion of its Preferred Securities
as it elects and receive, in exchange therefor, Senior Deferrable Notes in 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 accumulated and unpaid Distributions on, such Preferred
Securities. Such election (i) shall be exercisable effective on any Distribution
payment date by such Issuer Affiliated Holder delivering to the Property Trustee
a written notice of such election specifying the aggregate liquidation amount of
the Preferred Securities with respect to which such election is being made and
the Distribution payment date on which such exchange shall occur, which
Distribution payment date shall be not less than ten Business Days after the
date of receipt by the Property Trustee of such election notice and (ii) shall
be conditioned upon such Issuer Affiliated Holder having delivered or caused to
be delivered to the Property Trustee or its designee the Preferred Securities
which are the subject of such election by 10:00 A.M. New York time, on the
Distribution payment date on which such exchange is to occur. After the
exchange, such Preferred Securities will be canceled and will no longer be
deemed to be outstanding and all rights of the Senior Deferrable Notes Issuer or
its Affiliate(s) with respect to such Preferred Securities will cease.
(b) In the case of an exchange described in Section 5.4(a), the Trust
will, on the date of such exchange, exchange Senior Deferrable Notes having a
principal amount equal to a proportional amount of the aggregate liquidation
amount of the outstanding Common Securities based on the ratio of the aggregate
liquidation amount of the Preferred Securities exchanged pursuant to Section
5.4(a) divided by the aggregate liquidation amount of the Preferred Securities
outstanding immediately prior to such exchange, for such proportional amount of
Common Securities held by the Senior Deferrable Notes Issuer (which
contemporaneously shall be
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canceled and no longer be deemed to be outstanding); provided, that the Senior
Deferrable Notes Issuer delivers or causes to be delivered to the Property
Trustee or its designee the required amount of Common Securities to be exchanged
by 10:00 A.M., New York City time, on the Distribution payment date on which
such exchange is to occur.
ARTICLE 6: THE TRUSTEES
SECTION 6.1 Number of Trustees.
The number of Trustees initially shall be five, and:
(a) at any time before the issuance of any Securities, the Sponsor may
increase or decrease the number of Trustees by written instrument; and
(b) after the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the Holders of the Common Securities at a
meeting of the Holders of the Common Securities or by written consent without
prior notice in lieu of such meeting;
provided that the number of Trustees shall be at least three; and provided
further that: (i) the Delaware Trustee, in the case of a natural person, shall
be a person who is a resident of the State of Delaware or that, if not a natural
person, is an entity that has its principal place of business in the State of
Delaware and otherwise meets the requirements of applicable law; (ii) at least a
majority of the Trustees shall be employees or officers of, or are affiliates
of, the Sponsor; (iii) one Trustee shall be the Property Trustee for so long as
this Declaration is required to qualify as an indenture under the Trust
Indenture Act, and such Property Trustee also may serve as Delaware Trustee if
it meets the applicable requirements; (iv) each Trustee shall be a United States
Person; and (v) each Trustee, or any delegee of, any Trustee, shall at all times
act as Trustee in its individual capacity on its own behalf and will not, at any
time, in its capacity as Trustee, be under (or subject to) the control or
direction of any Foreign Person (pursuant to a contractual arrangement or
otherwise).
SECTION 6.2 Delaware Trustee; Eligibility.
If required by the Business Trust Act, one Trustee (which may be the
Property Trustee) (the "Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity that has its principal place of
business in the State of Delaware and otherwise meets the requirements of
applicable law, provided that if the Property Trustee has its principal place of
business in the State of Delaware and otherwise meets the requirements of
applicable law, then the Property Trustee also shall be the Delaware Trustee and
Section 3.11 shall have no application.
SECTION 6.3 Property Trustee; Eligibility.
(a) There shall be at all times one Trustee (which may be the Delaware
Trustee) that shall act as Property Trustee that shall:
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(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation that is a United States Person organized
and doing business under the law of the United States of America or any
state or territory thereof or of the District of Columbia, or a
corporation or other Person that is a United States 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 fifty 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 purpose of this Section 6.3(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report
of condition so published.
(b) If at any time the Property Trustee shall cease to be eligible to
so act under Section 6.3(a), the Property Trustee immediately shall resign in
the manner and with the effect set forth in Section 6.6(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holders of the Common Securities (as if it were the
obligor referred to in Section 310(b) of the Trust Indenture Act) shall comply
in all respects with the provisions of Section 310(b) of the Trust Indenture
Act.
(d) The Guarantee shall be deemed to be specifically described in this
Declaration for purposes of clause (i) of the first proviso contained in Section
310(b) of the Trust Indenture Act.
SECTION 6.4 Qualifications of the Regular Trustees Generally.
Each Regular 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 6.5 Initial Regular Trustees.
The initial Regular Trustees shall be Jay D. Browning, John D.
Gibbons, and Donna M. Titzman, the business address of all of whom is in care of
Valero Energy Corporation, One Valero Place, San Antonio, Texas 78212.
SECTION 6.6 Appointment, Removal and Resignation of the Trustees.
(a) Subject to Sections 6.6(b) and 7.5(k), the Trustees may be
appointed or removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
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(ii) after the issuance of any Securities, by a vote of the
Holders of a Majority in Liquidation Amount of the Common Securities at
a meeting of the Holders of the Common Securities or by written consent
without prior notice in lieu of such meeting.
(b) The Property Trustee shall not be removed in accordance with
Section 6.6(a) or Section 7.5(k) until a successor Trustee possessing the
qualifications to act as Property Trustee under Section 6.3(a) (a "Successor
Property Trustee") has been appointed and has accepted such appointment by
written instrument executed by such Successor Property Trustee and delivered to
the Regular Trustees and the Sponsor. The Delaware Trustee shall not be removed
in accordance with Section 6.6(a) or Section 7.5(k) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections 6.2 and
6.4 (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 a successor
has been appointed, until death or dissolution or until removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by written instrument executed by such Trustee and delivered to the
Sponsor and the other Trustees, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided that:
(i) no such resignation of the Property Trustee shall be
effective:
(A) until a Successor Property Trustee has been
appointed and has accepted such appointment
by written instrument executed by such
Successor Property Trustee and delivered to
the Regular Trustees, the Sponsor and the
resigning Property Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds
thereof distributed to the Holders of the
Securities; and
(ii) no such resignation of the Delaware Trustee shall be
effective until 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, the
Sponsor and the resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be, if the Property Trustee or the Delaware Trustee delivers an
instrument of resignation in accordance with this Section 6.6.
(e) If no Successor Property Trustee or Successor Delaware Trustee, as
the case may be, has been appointed and accepted appointment as provided in this
Section 6.6 within 60 days after delivery of an instrument of resignation or
removal, the resigning or removed Property Trustee or Delaware Trustee, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Property Trustee or Successor Delaware Trustee, as applicable. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Property Trustee or Successor Delaware Trustee, as
the case may be.
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(f) No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
(g) In case of the appointment hereunder of a Successor Property
Trustee or a Successor Delaware Trustee, such Successor Property Trustee or
Successor Delaware Trustee so appointed shall execute, acknowledge and deliver
to the Trust and to the retiring Property Trustee or Delaware Trustee, as the
case may be, an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Property Trustee or Delaware Trustee
shall become effective and such Successor Property Trustee or Successor Delaware
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Property Trustee or
Delaware Trustee; but, on the request of the Sponsor or the Successor Property
Trustee or Successor Delaware Trustee, such retiring Property Trustee or
Delaware Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such Successor Property Trustee or Successor Delaware
Trustee all the rights, powers and trusts of the retiring Property Trustee or
Delaware Trustee, as the case may be, and if the Property Trustee is the
resigning Trustee, it shall duly assign, transfer and deliver to the Successor
Property Trustee all property and money held by such retiring Property Trustee
hereunder.
SECTION 6.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 6.1, or if the number of
Trustees is increased pursuant to Section 6.1, 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 6.6.
SECTION 6.8 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, dissolve or terminate the Trust nor to
terminate this Declaration. 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 6.6, the Regular Trustees in office, regardless of
the 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 6.9 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 shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by
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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. 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 a Quorum is present, or without a
meeting and without prior notice 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 6.10 Delegation of Power by the Regular Trustees.
(a) Any Regular Trustee may delegate to any natural person over the age
of 21 that is a United States Person, by power of attorney consistent with
applicable law, his, her or its power for the purpose of executing any documents
contemplated in Section 3.6.
(b) The Regular Trustees shall have the power to delegate from time to
time to such of their number or to officers of the Trust or any other Person 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 6.11 Merger, Consolidation, Conversion or Succession to
Business.
Any entity into which the Property Trustee, the Delaware
Trustee or any Regular Trustee that is not a natural person may be merged or
converted or with such Trustee may be consolidated, or any entity resulting from
any merger, conversion or consolidation to which such Trustee is a party, or any
entity succeeding to all or substantially all the corporate trust business of
such Trustee, shall be the successor of such Trustee hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such entity otherwise is qualified and eligible
under this Article.
ARTICLE 7: TERMS OF THE SECURITIES
SECTION 7.1 General Provisions Regarding the Securities.
(a) The Regular Trustees shall issue, on behalf of the Trust, one class
of preferred securities representing undivided beneficial interests in the
assets of the Trust (the "Preferred Securities") and one class of common
securities representing undivided beneficial interests in the assets of the
Trust (the "Common Securities").
(i) Preferred Securities. The Preferred Securities of the
Trust shall have an aggregate stated liquidation amount with respect to
the assets of the Trust of one hundred fifty million and 00/100 dollars
($150,000,000) (subject to increase to not more than one
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hundred seventy-two million five hundred thousand and 00/100 dollars
($172,500,000) in the event of the exercise of any Over-allotment
Option) and a stated liquidation amount with respect to the assets of
the Trust of $25 per Preferred Security. The Preferred Securities are
hereby designated for identification purposes only as the Preferred
Securities. The Preferred Security Certificates shall be substantially
in the form of Exhibit A hereto, with such changes and additions
thereto or deletions therefrom as may be required by ordinary usage,
custom or practice.
(ii) Common Securities. The Common Securities of the Trust
shall have an aggregate liquidation amount with respect to the assets
of the Trust of four million six hundred thirty-nine thousand two
hundred and 00/100 dollars ($4,639,200) (subject to increase to not
more five million three hundred thirty-five thousand seventy-five and
00/100 dollars ($5,335,075) in the event of the exercise of any
Over-allotment Option) and a liquidation amount with respect to the
assets of the Trust of $25 per Common Security. The Common Securities
are hereby designated for identification purposes only as the Common
Securities. The Common Security Certificates shall be substantially in
the form of Exhibit B hereto, with such changes and additions thereto
or deletions therefrom as may be required by ordinary usage, custom or
practice.
(b) Payment of Distributions on, and any payment of the Redemption
Price upon a redemption of, the Preferred Securities and the Common Securities,
as applicable, shall be made Pro Rata based on the liquidation amount of such
Preferred Securities and Common Securities; provided that if on any date on
which amounts payable on distribution or redemption, an Indenture Event of
Default has occurred and is continuing, then such amounts payable shall not be
made on any of the Common Securities, and no other payment on account of the
redemption, liquidation or other acquisition of such Common Securities shall be
made, until all accumulated and unpaid Distributions, or payments of the
Redemption Price, as the case may be, on all of the outstanding Preferred
Securities for which Distributions are to be paid or that have been called for
redemption, as the case may be, are fully paid. All funds available to the
Property Trustee shall first be applied to the payment in full in cash of all
Distributions on, or the Redemption Price of, the Preferred Securities then due
and payable.
(c) 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.
(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be validly issued, fully paid and non-assessable
beneficial ownership interests in the assets of the Trust.
(e) Every Person, by virtue of having become a Holder of Securities or
a Beneficial Owner of Preferred Securities 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, the Guarantee, the Indenture, the
Purchase Contract Agreement, the Pledge Agreement and the Senior Deferrable
Notes.
(f) The Holders of the Securities shall not have any preemptive or
similar rights.
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(g) 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 Regular Trustee. If a Regular Trustee of the Trust who has signed any of the
Certificates ceases to be a Regular Trustee before such signed Certificates have
been delivered by the Trust, such Certificates nevertheless may be delivered as
though the Person who signed such Certificates had not ceased to be a Regular
Trustee. Any Certificate may be signed on behalf of the Trust by such Persons
who, at the actual date of execution of such Certificate, shall be the Regular
Trustees of the Trust, although at the date of the execution and delivery of
this 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 may be required to comply with any law or
with any rule or regulation of any stock exchange on which the Securities may be
listed, or to conform to usage.
A Preferred Security Certificate shall not be valid until
authenticated by the manual signature of an authorized signatory of the Property
Trustee. Such signature shall be conclusive evidence that such Preferred
Security Certificate has been authenticated under this Declaration.
Upon a written order of the Trust signed by one Regular
Trustee, the Property Trustee shall authenticate the Preferred Security
Certificates for original issue. The aggregate number of Preferred Securities
outstanding at any time (including the Over-allotment Option) shall not exceed
the liquidation amount set forth in Section 7.1(a)(i).
The Property Trustee may appoint an authenticating agent
acceptable to the Trust, as determined by the Regular Trustees on behalf of the
Trust, to authenticate Certificates. An authenticating agent may authenticate
Certificates whenever the Property Trustee may do so. Each reference in this
Declaration to authentication by the Property Trustee shall include
authentication by such agent. An authenticating agent shall have the same rights
as the Property Trustee to deal with the Sponsor or an Affiliate of the Sponsor.
(h) The Preferred Securities Certificates, upon original issuance
(including Preferred Securities, if any, issued pursuant to the exercise of any
Over-allotment Option), shall be issued as Global Securities in the form of one
or more fully registered global Preferred Security Certificates (each a "Global
Certificate"), to be delivered to The Depository Trust Company, the initial
Depositary, by or on behalf of the Trust. Such Global Certificates initially
shall be registered on the books and records of the Trust in the name of "Cede &
Co.," the nominee of the initial Depositary. No Beneficial Owner of Preferred
Securities shall receive a definitive Preferred Security Certificate
representing such Beneficial Owner's interests in such Global Certificates,
except as provided in Section 7.12. Unless and until definitive, fully
registered Preferred Security Certificates have been issued to the Beneficial
Owners of Preferred Securities pursuant to Section 7.12,
(i) the provisions of this Section 7.1 shall be in full force
and effect;
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(ii) the Trust and the Trustees shall be entitled to deal with
the Depositary for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents thereunder) as the Holder of the Preferred
Securities and the sole Holder of the Global Certificates and, except
as set forth herein or in Rule 3a-7 (if the Trust is excluded from the
definition of an Investment Company solely by reason of Rule 3a-7) with
respect to the Property Trustee, shall have no obligation to the
Beneficial Owners of the Preferred Securities;
(iii) to the extent that the provisions of this Section 7.1
conflict with any other provisions of this Declaration, the provisions
of this Section 7.1 shall control; and
(iv) the rights of the Beneficial Owners of the Preferred
Securities shall be exercised only through the Depositary and shall be
limited to those established by law and agreements between such
Beneficial Owners and the Depositary and/or the Depositary
Participants. The Depositary shall make book-entry transfers among
Depositary Participants and receive and transmit Distributions on the
Global Certificates to such Depositary Participants; provided that
solely for the purposes of determining whether the Holders of the
requisite amount of Preferred Securities have voted on any matter
provided for in this Declaration, so long as definitive Preferred
Security Certificates have not been issued, the Trustees may rely
conclusively on, and shall be fully protected in relying on, any
written instrument (including a proxy) delivered to the Trustees by the
Depositary setting forth the votes of the Beneficial Owners of the
Preferred Securities or assigning the right to vote on any matter to
any other Persons either in whole or in part.
Whenever a notice or other communication to the Holder of the
Preferred Securities is required to be given under this Declaration, unless and
until definitive Preferred Security Certificates have been issued pursuant to
Section 7.1(g), the Trustees shall deliver all such notices and communications
specified herein to be given to the Holders of the Preferred Securities to the
Depositary, and, with respect to any Preferred Security Certificate registered
in the name of a Depositary or the nominee of a Depositary, the Trustees may
conclusively rely on, and shall be fully protected in relying on, any written
instrument (including a proxy) delivered to the Trustees by the Depositary
setting forth the votes of the Beneficial Owners of the Preferred Securities or
assigning the right to vote on any matter or any other Persons either in whole
or in part.
SECTION 7.2 Distributions.
(a) Holders of the Securities shall be entitled to receive
Distributions that shall accumulate and be payable at the rate per annum of
7 3/4% of the stated liquidation amount of $25 per Security until August 18,
2003, and at the Reset Rate thereafter. The amount of Distributions payable for
any period shall be computed (i) for any full quarterly distribution period, on
the basis of a 360-day year of twelve 30-day months and (ii) for any period
shorter than a full quarterly distribution period, on the basis of a 30-day
month and, for any period of less than one month, on the basis of the actual
number of days elapsed per 30-day month. Subject to Section 7.1(b),
Distributions shall be made on the Securities on a Pro Rata basis. Distributions
on the Securities shall accumulate from June 28, 2000, shall be cumulative and
shall be payable
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quarterly, in arrears, on February 18, May 18, August 18 and November 18 of each
year, commencing August 18, 2000, when, as and if available for payment, by the
Property Trustee, except as otherwise described below. Distributions shall be
payable only to the extent that payments are made to the Trust in respect of the
Senior Deferrable Notes held by the Property Trustee and to the extent that the
Trust has funds available for the payment of such Distributions in the Property
Account.
(b) Distributions not paid on the scheduled payment date shall
accumulate and compound quarterly at the rate of 7 3/4% per annum through and
including August 18, 2003 and at the Reset Rate thereafter ("Compounded
Distributions"). "Distributions" shall mean ordinary cumulative distributions
together with any Compounded Distributions.
(c) If and to the extent that the Senior Deferrable Notes Issuer makes
a payment of principal of and any premium or interest on the Senior Deferrable
Notes held by the Property Trustee (the amount of any such payment being a
"Payment Amount"), the Property Trustee shall and is directed, to the extent
funds are available for that purpose, to make a Pro Rata distribution of the
Payment Amount to Holders, subject to Section 7.1(b).
(d) Distributions on the Securities shall be payable to the Holders
thereof as they appear on the register of the Trust as of the close of business
on the relevant record dates. If the Preferred Securities are represented by one
or more Global Securities, the relevant record dates shall be the close of
business on the Business Day preceding such Distribution payment date, unless a
different regular record date is established or provided for the corresponding
interest payment date on the Senior Deferrable Notes. The relevant record dates
for the Common Securities shall be the same as for the Preferred Securities. If
the Preferred Securities are not represented by one or more Global Securities,
the relevant record dates for the Preferred Securities shall be selected by the
Regular Trustees and shall be the fifteenth Business Day prior to the relevant
Distribution payment dates. At all times, the Distribution payment dates shall
correspond to the interest payment dates on the Senior Deferrable Notes.
Distributions payable on any Securities that are not punctually paid on any
Distribution payment date, as a result of the Senior Deferrable Notes Issuer
having failed to make a payment under the Senior Deferrable Notes, shall cease
to be payable to the Person in whose name such Securities are registered on the
relevant record date, and such defaulted Distribution instead shall 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 this Declaration. If
any date on which Distributions are payable on the Securities is not a Business
Day, then payment of the Distribution payable on such date shall be made on the
next 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 is in the next
calendar year, such payment shall be made on the preceding Business Day, with
the same force and effect as if made on such payment date.
(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 among the Holders of the Securities, subject to Section
7.1(b).
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SECTION 7.3 Redemption of Securities.
(a) Upon the repayment or redemption, in whole or in part, of the
Senior Deferrable Notes held by the Trust, whether at the stated maturity of the
Senior Deferrable Notes or upon earlier redemption as provided in the Indenture,
the proceeds from such repayment or redemption shall be simultaneously applied
Pro Rata (subject to Section 7.1(b)) to redeem Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Senior
Deferrable Notes so repaid or redeemed at the Redemption Price. Holders of the
Securities shall be given not less than 30 nor more than 60 days notice of such
redemption in accordance with Section 7.4.
(b) If the Senior Deferrable Notes Issuer redeems the Senior Deferrable
Notes upon the occurrence and continuance of a Tax Event, the proceeds from such
redemption shall be applied by the Property Trustee to redeem the Securities in
whole (but not in part) at a redemption price per Security equal to the
Redemption Amount plus any accumulated and unpaid Distributions thereon to the
Tax Event Redemption Date. If, following the occurrence of a Tax Event, the
Senior Deferrable Notes Issuer exercises its option to redeem the Senior
Deferrable Notes, the Senior Deferrable Notes Issuer shall appoint the Quotation
Agent; if a Tax Event Redemption occurs prior to the Purchase Contract
Settlement Date, the redemption price payable in liquidation of the Securities
will be distributed to Bank One Trust Company, N.A., acting as the securities
intermediary under the Pledge Agreement, which in turn will apply that amount to
purchase the Treasury Portfolio and remit the remaining portion, if any, of such
price to The Bank of New York, acting as the purchase contract agent under the
Purchase Contract Agreement, for payment to the Holders of the Securities. If a
Tax Event Redemption occurs after the Purchase Contract Settlement Date, the
Treasury Portfolio shall not be purchased and the Property Trustee shall
distribute to the Holders of the Securities on the Tax Event Redemption Date the
Redemption Price payable in liquidation of such Holders' interests in the assets
of the Trust.
SECTION 7.4 Redemption Procedures.
(a) Notice of any redemption of, or notice of distribution of Senior
Deferrable Notes in exchange for, the Securities (a "Redemption/Distribution
Notice"), which notice shall be irrevocable, shall be given by the Trust by mail
to each Holder of Securities to be redeemed or exchanged at least 30 but no more
than 60 days before the date fixed for redemption or exchange thereof which, in
the case of a redemption, shall be the date fixed for redemption of the Senior
Deferrable Notes. For purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given pursuant to this Section
7.4(a), 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 the Holders
of the Securities. Each Redemption/Distribution Notice shall be addressed to the
Holders of the Securities at the address of each such Holder appearing in the
register of the Trust. All notices of redemption shall state:
(i) the date fixed for redemption;
(ii) the Redemption Price;
(iii) the applicable CUSIP number;
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(iv) if less than all of the outstanding Securities are to be
redeemed, the identification and amount of the particular Trust
securities to be redeemed;
(v) that on the date fixed for redemption the Redemption Price
will become due and payable upon each Security to be redeemed and that
Distributions thereon will cease to accrue on and after said date; and
(vi) the place or places where such Securities are to be
surrendered for payment of the Redemption Price.
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.
(b) Subject to the Trust's fulfillment of the notice requirements set
forth in Section 7.4(a), if Securities are to be redeemed, then (provided that
the Senior Deferrable Notes Issuer has paid the Property Trustee a sufficient
amount of cash in connection with the related redemption or maturity of the
Senior Deferrable Notes) (i) with respect to the Preferred Securities
represented by one or more Global Securities, by 12:00 noon, New York City time,
on the redemption date, the Property Trustee will deposit irrevocably with the
Depositary or its nominee funds sufficient to pay the applicable Redemption
Price, and the Property Trustee shall give the Depositary irrevocable
instructions and authority to pay the Redemption Price to the Beneficial Owners
of the Preferred Securities, and (ii) with respect to Securities not represented
by one or more Global Securities, the Property Trustee shall pay the applicable
Redemption Price to the Holders of such Securities by check mailed to the
address of each Holder appearing on the register of the Trust on the redemption
date. If any date fixed for redemption of Securities is not a Business Day, then
payment of the Redemption Price payable on such date shall be made on the next
Business Day (without any interest thereon), except that if such Business Day
falls in the next calendar year, such payment shall be made on the preceding
Business Day, in each case with the same force and effect as if made on such
date fixed for redemption. Notwithstanding the foregoing, so long as the Holder
of any Preferred Securities is the Collateral Agent or the Purchase Contract
Agent, the payment of the Redemption Price in respect of the Preferred
Securities held by the Collateral Agent or the Purchase Contract Agent shall be
made no later than 12:00 noon, New York City time, on the redemption date by
check or wire transfer in immediately available funds at such place and to such
account as may be designated by the Collateral Agent or the Purchase Contract
Agent. If payment of the Redemption Price in respect of any Securities is
improperly withheld or refused and not paid either by the Trust or by the
Sponsor as guarantor pursuant to the Guarantee, then Distributions on such
Securities shall continue to accumulate at the then applicable rate, from the
original redemption date to the actual date of payment, in which case the actual
payment date shall be the date fixed for redemption for purposes of calculating
the Redemption Price. For these purposes, the applicable Redemption Price shall
not include Distributions that are being paid to Holders of Securities who were
not Holders of Securities on a relevant record date. If a
Redemption/Distribution Notice has been given and funds have been deposited or
paid as required, then immediately prior to the close of business on the date of
such deposit or payment, Distributions will cease to accumulate on the
Securities called for redemption, and all rights of Holders of such Securities
so called for redemption shall cease, except the right of the Holders of such
Securities to receive the
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Redemption Price, but without interest on such Redemption Price, and from and
after the date fixed for redemption, such Securities will cease to be
outstanding.
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 called for redemption, except for the unredeemed portion of any Securities
being redeemed in part.
(c) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Senior Deferrable Notes
Issuer or its Affiliates may purchase, at any time and from time to time,
outstanding Preferred Securities by tender, in the open market, by private
agreement or otherwise.
SECTION 7.5 Voting Rights of the Preferred Securities.
(a) Except as provided under this Section 7.5 and Section 11.1 and as
otherwise required by the Business Trust Act, the Trust Indenture Act and other
applicable law, the Holders of the Preferred Securities shall have no voting
rights.
(b) Subject to the requirement of the Property Trustee obtaining a tax
opinion in certain circumstances set forth in Section 7.5(d), the Holders of a
Majority in Liquidation Amount of the Preferred Securities, voting separately as
a class, shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Property Trustee, or to direct
the exercise of any trust or power conferred upon the Property Trustee under
this Declaration, including the right to direct the Property Trustee, as Holder
of the Senior Deferrable Notes, to (i) exercise the remedies available to it
under the Indenture, (ii) consent to any amendment or modification of the
Indenture or the Senior Deferrable Notes where such consent is required or (iii)
waive any past default and its consequences that are waivable under the
Indenture; provided that if an Indenture Event of Default has occurred and is
continuing, then the Holders of 25% of the aggregate stated liquidation amount
of the Preferred Securities may direct the Property Trustee to declare the
principal of and interest on the Senior Deferrable Notes due and payable;
provided further that where a consent or action under the Indenture would
require the consent or act of the Holders of more than a majority of the
aggregate principal amount of Senior Deferrable Notes affected thereby, the
Property Trustee only may give such consent or take such action at the direction
of the Holders of at least the same proportion in aggregate stated liquidation
amount of the Preferred Securities; and provided further, however, that (subject
to the provisions of Section 3.09) the Property Trustee shall have the right to
decline to follow any such direction if the Property Trustee, being advised by
counsel, determines that the action or proceeding so directed may not lawfully
be taken or if the Property Trustee, in good faith, by its board of directors or
trustees, executive committee, or a trust committee of directors or trustees,
and/or Responsible Officers, shall determine that the action or proceeding so
directed would involve the Property Trustee in personal liability.
(c) If the Property Trustee fails to enforce its rights under the
Senior Deferrable Notes after a Holder of Preferred Securities has made a
written request, such Holder of Preferred Securities may institute, to the
fullest extent permitted by law, a legal proceeding directly against the Senior
Deferrable Notes Issuer to enforce the Property Trustee's rights under the
Indenture without first instituting any legal proceeding against the Property
Trustee or any other Person. In
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addition, if a Trust Enforcement Event has occurred and is continuing and such
event is attributable to the failure of the Senior Deferrable Notes Issuer to
make any interest, principal or other required payments when due under the
Indenture, then a Holder of Preferred Securities may institute a Direct Action
against the Senior Deferrable Notes Issuer on or after the respective due date
specified in the Senior Deferrable Notes. In connection with such Direct Action,
the Senior Deferrable Notes Issuer will be subrogated to the rights of such
Holder of Preferred Securities to the extent of any payment made by the Senior
Deferrable Notes Issuer to such Holders of Preferred Securities in such Direct
Action.
(d) The Property Trustee shall notify all Holders of the Preferred
Securities of any notice of any Indenture Event of Default received from the
Senior Deferrable Notes Issuer with respect to the Senior Deferrable Notes. Such
notice shall state that such Indenture Event of Default also constitutes a Trust
Enforcement Event. Except with respect to directing the time, method, and place
of conducting a proceeding for a remedy, the Property Trustee shall be under no
obligation to take any of the actions described in clauses (i) and (ii) of
Section 7.5(b) above, unless the Property Trustee has obtained an opinion of
independent tax counsel to the effect that the Trust will not fail to be
classified as a grantor trust for United States federal income tax purposes as a
result of such action, and that each Holder of Preferred Securities shall be
treated as owning an undivided beneficial ownership interest in the Senior
Deferrable Notes.
(e) If the consent of the Property Trustee, as the Holder of the Senior
Deferrable Notes, is required under the Indenture with respect to any amendment
or modification of the Indenture, the Property Trustee shall request the
direction of the Holders of the Securities with respect to such amendment or
modification and shall vote with respect to such amendment or modification as
directed by a Majority in Liquidation Amount of the Securities voting together
as a single class; provided that where a consent under the Indenture would
require the consent of the Holders of more than a majority of the aggregate
principal amount of the Senior Deferrable Notes, the Property Trustee only may
give such consent at the direction of the Holders of at least the same
proportion in aggregate stated liquidation amount of the Securities. The
Property Trustee shall not take any such action in accordance with the
directions of the Holders of the Securities unless the Property Trustee has
obtained an opinion of independent tax counsel to the effect that the Trust will
not be classified as other than a grantor trust for United States federal income
tax purposes as a result of such action, and that each Holder will be treated as
owning an undivided beneficial ownership interest in the Senior Deferrable
Notes.
(f) A waiver of an Indenture Event of Default with respect to the
Senior Deferrable Notes shall constitute a waiver of the corresponding Trust
Enforcement Event.
(g) Any required approval or direction of the Holders of the Preferred
Securities may be given at a separate meeting of the Holders of the Preferred
Securities convened for such purpose, at a meeting of all of the Holders of the
Securities or pursuant to written consent without prior notice. The Regular
Trustees shall cause a notice of any meeting at which Holders of the Preferred
Securities are entitled to vote to be mailed to each Holder of record of
Preferred Securities. Each such notice shall include a statement setting forth:
(i) the date of such meeting; (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote; and (iii)
instructions for the delivery of proxies.
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(h) No vote or consent of the Holders of the Preferred Securities shall
be required for the Trust to redeem and cancel the Preferred Securities or
distribute the Senior Deferrable Notes in accordance with this Declaration and
the terms of the Securities.
(i) Notwithstanding that the Holders of the Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Preferred Securities that are owned at such time by the Senior Deferrable
Notes Issuer the Trustees or any entity directly or indirectly controlled by, or
under direct or indirect common control with, the Senior Deferrable Notes Issuer
or any Trustee shall not be entitled to vote or consent and shall be treated,
for purposes of such vote or consent, as if such Preferred Securities were not
outstanding.
(j) Except as provided under Section 7.5(k), the Holders of the
Preferred Securities shall have no rights to appoint or remove the Trustees,
who, subject to Section 6.6, may be appointed, removed or replaced by the
Holders of the Common Securities.
(k) If an Indenture Event of Default has occurred and is continuing,
the Property Trustee and the Delaware Trustee may be removed and replaced,
subject to Section 6.6(b), at such time by a Majority in Liquidation Amount of
the Preferred Securities.
SECTION 7.6 Voting Rights of the Common Securities.
(a) Except as provided under Section 6.1(b), this Section 7.6 and
Section 11.1 and as otherwise required by the Business Trust Act, the Trust
Indenture Act or other applicable law or provided by this Declaration, the
Holders of the Common Securities shall have no voting rights.
(b) Subject to Section 7.5(k), the Holders of the Common Securities
shall be entitled to vote to appoint, remove or replace any Trustee or to
increase or decrease the number of Trustees in accordance with Article 6.
(c) Subject to Section 2.6 and only after all Trust Enforcement Events
with respect to the Preferred Securities have been cured, waived, or otherwise
eliminated and subject to the requirement of the Property Trustee obtaining a
tax opinion in certain circumstances set forth in this paragraph (c), the
Holders of the Common Securities shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Property
Trustee, or to direct the exercise of any trust or power conferred upon the
Property Trustee under this Declaration, including the right to direct the
Property Trustee, as Holder of the Senior Deferrable Notes, to (i) exercise the
remedies available to it under the Indenture, (ii) consent to any amendment or
modification of the Indenture or the Senior Deferrable Notes where such consent
is required or (iii) waive any past default and its consequences that are
waivable under the Indenture; provided that where a consent or action under the
Indenture would require the consent or act of the Holders of more than a
majority of the aggregate principal amount of Senior Deferrable Notes affected
thereby, only the Holders of at least the same proportion of the aggregate
stated liquidation amount of the Common Securities may direct the Property
Trustee to give such consent or take such action. Except with respect to
directing the time, method, and place of conducting a proceeding for a remedy,
the Property Trustee shall be under no obligation to take any of the actions
described in clause 7.6(c)(i) and (ii) above unless the Property Trustee has
obtained an opinion of independent tax counsel to the effect that, as a result
of such action,
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for United States federal income tax purposes the Trust will not fail to be
classified as a grantor trust and each Holder will be treated as owning an
undivided beneficial ownership interest in the Senior Deferrable Notes.
(d) If the Property Trustee fails to enforce its rights under the
Senior Deferrable Notes after the Holders of the Common Securities have made a
written request, the Holders of the Common Securities may institute, to the
fullest extent permitted by law, a legal proceeding directly against the Senior
Deferrable Notes Issuer to enforce the Property Trustee's rights under the
Senior Deferrable Notes without first instituting any legal proceeding against
the Property Trustee or any other Person.
(e) A waiver of an Indenture Event of Default with respect to the
Senior Deferrable Notes shall constitute a waiver of the corresponding Trust
Enforcement Event.
(f) Any required approval or direction of the Holders of the Common
Securities may be given at a separate meeting of the Holders of the Common
Securities convened for such purpose, at a meeting of all of the Holders of the
Securities or pursuant to written consent without prior notice. The Regular
Trustees shall cause a notice of any meeting at which the Holders of the Common
Securities are entitled to vote to be mailed to the Holders of the Common
Securities. Such notice shall include a statement setting forth: (i) the date of
such meeting; (ii) a description of any resolution proposed for adoption at such
meeting on which the Holders of the Common Securities are entitled to vote; and
(iii) instructions for the delivery of proxies.
(g) No vote or consent of the Holders of the Common Securities shall be
required for the Trust to redeem and cancel the Common Securities or to
distribute Senior Deferrable Notes in accordance with this Declaration and the
terms of the Securities.
SECTION 7.7 Paying Agent.
If any Preferred Securities are not represented by one or more
Global Securities, the Trust shall maintain in the Borough of Manhattan, New
York City, State of New York, an office or agency where the Preferred Securities
may be presented for payment ("Paying Agent"). The Regular Trustees shall
appoint the paying agent (which shall be a bank or trust company acceptable to
the Senior Deferrable Notes Issuer) and may appoint one or more additional
paying agents in such other locations as they shall determine. The term "Paying
Agent" includes any additional paying agent. The Regular Trustees may change any
Paying Agent without prior notice to the Holders of the Securities. The Regular
Trustees shall notify the Property Trustee of the name and address of any Paying
Agent not a party to this Declaration. If the Regular Trustees, on behalf of the
Trust, fail to appoint or maintain another entity as Paying Agent, the Property
Trustee shall act as such. The Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Property Trustee and the Senior
Deferrable Notes Issuer.
SECTION 7.8 Listing.
The Sponsor shall use its best efforts to cause the PEPS Units
to be listed and maintained as listed for quotation on the New York Stock
Exchange.
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SECTION 7.9 Transfer of the Securities.
(a) (i) The Preferred Securities initially shall be pledged, pursuant
to the terms of the Pledge Agreement, as collateral to secure the obligations of
the Holders of PEPS Units to purchase common shares of the Company in accordance
with the terms of the Purchase Contract Agreement.
(ii) The Preferred Securities may be transferred, in whole or in part,
only in accordance with the terms and conditions set forth in this Declaration
and pursuant to the Pledge Agreement. To the fullest extent permitted by law,
any transfer or purported transfer of any Preferred Security not made in
accordance with this Declaration shall be null and void.
(iii) Subject to this Section 7.9 and Section 7.12, the Preferred
Securities shall be freely transferable.
(iv) The Trust shall cause to be kept at the Corporate Trust Office a
register in which, subject to such reasonable regulations as it may prescribe,
the Trust shall provide for the registration of Preferred Securities and of
transfers of Preferred Securities. The Property Trustee is hereby appointed
"Security Registrar" for the purpose of registering Preferred Securities and
transfers of Preferred Securities as herein provided.
(v) Upon surrender for registration of transfer of any Preferred
Securities at an office or agency of the Trust designated for such purpose, a
Regular Trustee shall execute, and the Property Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Preferred Securities of any authorized denominations and of a like aggregate
principal amount.
(vi) At the option of the Holder, Securities may be exchanged for other
Preferred Securities of any authorized denominations and of a like aggregate
principal amount, upon surrender of the Preferred Securities to be exchanged at
such office or agency. Whenever any Preferred Securities are so surrendered for
exchange, a Regular Trustee shall execute, and the Property Trustee shall
authenticate and deliver, the Preferred Securities that the Holder making the
exchange is entitled to receive.
(vii) If so required by the Trust or the Property Trustee, every
Preferred Security presented or surrendered for registration of transfer or for
exchange shall be duly endorsed, or accompanied by a duly executed written
instrument of transfer in form satisfactory to the Trust and the Security
Registrar, by the Holder thereof or his attorney duly authorized in writing.
(viii) No service charge shall be made for any registration of transfer
or exchange of Preferred Securities, but the Trust may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Preferred
Securities.
(b) The Senior Deferrable Notes Issuer may not transfer the Common
Securities except in connection with the transactions permitted under Section
801 of the Indenture; provided, that
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each Holder of the Common Securities shall at all times be a United States
Person. To the fullest extent permitted by law, any attempted transfer of the
Common Securities other than as set forth in this Section 7.9(b) shall be null
and void.
SECTION 7.10 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates are surrendered to the Regular Trustees,
or if the Regular Trustees 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 and the Property
Trustee harmless, then, in the absence of notice that such Certificate has been
acquired by a bona fide purchaser, any Regular Trustee shall execute and the
Property Trustee shall authenticate 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 7.10, 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
7.10 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 is found at any time.
SECTION 7.11 Deemed Holders.
The Trustees may treat the Person in whose name any
Certificate is registered on the register of the Trust as the sole holder of
such Certificate and of the Securities represented thereby for purposes of
receiving Distributions and for all other purposes whatsoever. Accordingly, the
Trustees 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 has actual or
other notice thereof.
SECTION 7.12 Global Securities.
The Preferred Securities initially shall be issued in the form
of one or more Global Securities. A Regular Trustee on behalf of the Trust shall
execute, and the Property Trustee shall authenticate and deliver, one or more
Global Securities that (i) shall represent and be denominated in an amount equal
to the aggregate stated liquidation amount of all of the Preferred Securities to
be issued in the form of Global Securities and not yet canceled, (ii) shall be
registered in the name of the Depositary for the Preferred Securities or the
nominee of such Depositary and (iii) shall be delivered by the Property Trustee
to such Depositary or pursuant to such Depositary's instructions. Global
Securities shall bear a legend substantially to the following effect:
"This Preferred Security is a Global Security within the
meaning of the Declaration and is registered in the name of
The Depository
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Trust Company, a New York corporation (the "Depositary"), or a
nominee of the Depositary. This Preferred Security is
exchangeable for Preferred 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 Preferred Security (other than a transfer of
this Preferred 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
reregistered except in limited circumstances.
Unless this certificate is presented by an authorized
representative of the Depositary to VEC Trust I or its agent
for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative
of the Depositary (and any payment hereon is made to Cede &
Co. or to such other entity as is requested by an authorized
representative of the Depositary), and except as otherwise
provided in the Amended and Restated Declaration of VEC Trust
I dated as of June 28, 2000, as amended from time to time, ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON (OTHER THAN PURSUANT TO THE PLEDGE AGREEMENT)
IS WRONGFUL since the registered owner hereof, Cede & Co., has
an interest herein."
Preferred Securities not represented by a Global Security issued in
exchange for all or a part of a Global Security pursuant to this Section 7.12
shall be registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Property Trustee. Upon execution and
authentication, the Property Trustee shall deliver any Preferred Securities not
represented by a Global Security to the Persons in whose names such definitive
Preferred Securities are so registered.
At such time as all interests in Global Securities have been redeemed,
repurchased or canceled, such Global Securities shall be canceled, upon receipt
thereof, by the Property Trustee in accordance with standing procedures of the
Depositary. At any time prior to such cancellation, if any interest in a Global
Security is exchanged for Preferred Securities not represented by a Global
Security, redeemed, canceled or transferred to a transferee who receives
Preferred Securities not represented by a Global Security, or if any Preferred
Security not represented by a Global Security is exchanged or transferred for
part of a Global Security, then, in accordance with the standing procedures of
the Depositary, the liquidation amount of such Global Security shall be reduced
or increased, as the case may be, and an endorsement shall be made on such
Global Security by the Property Trustee to reflect such reduction or increase.
The Trust and the Property Trustee, as the authorized representative of
the Holders of the Preferred Securities, may deal with the Depositary for all
purposes of this Declaration, including
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the making of payments due on the Preferred Securities and exercising the rights
of Holders of the Preferred Securities hereunder. The rights of any Beneficial
Owner shall be limited to those established by law and agreements between such
owners and Depository Participants; provided that no such agreement shall give
to any Person any rights against the Trust or the Property Trustee without the
written consent of the parties so affected. Multiple requests and directions
from and votes of the Depositary as the Holder of the Preferred Securities
represented by Global Securities with respect to any particular matter shall not
be deemed inconsistent to the extent they do not represent an amount of
Preferred Securities in excess of those held in the name of the Depositary or
its nominee.
If at any time the Depositary notifies the Trust that it is unwilling
or unable to continue as Depositary for the Preferred Securities or if at any
time the Depositary no longer is eligible under this Section 7.12, the Regular
Trustees shall appoint a successor Depositary with respect to the Preferred
Securities. If a successor Depositary is not appointed by the Trust within 90
days after the Trust receives such notice or becomes aware of such
ineligibility, the Trust's election that the Preferred Securities be represented
by one or more Global Securities shall no longer be effective, and a Regular
Trustee shall execute, and the Property Trustee will authenticate and deliver,
Preferred Securities in definitive registered form, in any authorized
denominations, in an aggregate stated liquidation amount equal to the aggregate
stated liquidation amount of the Global Securities representing the Preferred
Securities in exchange for such Global Securities.
A Regular Trustee on behalf of the Trust at any time and in its sole
discretion may determine that the Preferred Securities issued in the form of one
or more Global Securities shall no longer be represented by Global Securities.
In such event a Regular Trustee on behalf of the Trust shall execute, and the
Property Trustee shall authenticate and deliver, Preferred Securities in
definitive registered form, in any authorized denominations, in an aggregate
stated liquidation amount equal to the aggregate stated liquidation amount of
the Global Securities representing the Preferred Securities, in exchange for
such Global Securities.
Notwithstanding any other provisions of this Declaration (other than
the provisions set forth in Section 7.9), Global Securities may not be
transferred as a whole except 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 or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.
Interests of Beneficial Owners may be transferred or exchanged for
Preferred Securities not represented by a Global Security, and Preferred
Securities not represented by a Global Security may be transferred or exchanged
for a Global Security or Securities, in accordance with rules of the Depositary
and the provisions of Section 7.9.
SECTION 7.13 Remarketing.
(a) So long as the Preferred Securities, the PEPS Units and the
Treasury Securities are evidenced by one or more global certificates held by the
Depositary, the Senior Deferrable Notes Issuer shall request, not later than 15
nor more than 30 calendar days prior to the Remarketing Date, that the
Depositary notify the Holders of the Preferred Securities and the holders of
PEPS
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Units and the Treasury PEPS Units of the Remarketing and of the procedures that
must be followed if a Holder of Preferred Securities wishes to make a Cash
Settlement.
(b) Not later than 5:00 P.M., New York City time, on the seventh
Business Day preceding August 18, 2003, each Holder of Preferred Securities may
elect to have the Preferred Securities held by such Holder remarketed in the
Remarketing. Under Section 5.02 of the Purchase Contract Agreement, holders of
PEPS Units that do not give notice of their intention to make a Cash Settlement
of the Purchase Contract component of their PEPS Units prior to such time in the
manner specified in such Section, or have given such notice but fail to deliver
cash prior to 11:00 A.M., New York City time, on or prior to the fifth Business
Day preceding August 18, 2003, shall be deemed to have consented to the
disposition of the Preferred Securities comprising a component of their PEPS
Units in the Remarketing. Holders of the Preferred Securities that are not a
component of PEPS Units wishing to elect to have their Preferred Securities
remarketed shall give to the Property Trustee notice of their election prior to
11:00 A.M., New York City time on the fifth Business Day prior to August 18,
2003. Any such notice shall be irrevocable and may not be conditioned upon the
level at which the Reset Rate is established in the Remarketing. Promptly after
11:00 A.M., New York City time, on such fifth Business Day, the Property
Trustee, based on the notices received by it prior to such time (including
notices from the Purchase Contract Agent as to Purchase Contracts for which Cash
Settlement has been elected and cash received), shall notify the Trust, the
Sponsor and the Remarketing Agent of the number of Preferred Securities to be
tendered for purchase in the Remarketing.
(c) If any Holder of PEPS Units does not give a notice of its intention
to make a Cash Settlement or gives such notice but fails to deliver cash as
described in Section 7.13(b), or gives a notice of election to have Preferred
Securities that are not a component of PEPS Units remarketed, then the Preferred
Securities of such Holder shall be deemed tendered for purchase in the
Remarketing, notwithstanding any failure by such Holder to deliver or properly
deliver such Preferred Securities to the Remarketing Agent for purchase.
(d) The right of each Holder to have Preferred Securities tendered for
purchase shall be limited to the extent that (i) the Remarketing Agent conducts
a Remarketing pursuant to the terms of the Remarketing Agreement, (ii) the
Remarketing Agent is able to find a purchaser or purchasers for the tendered
Preferred Securities and (iii) such purchaser or purchasers deliver the purchase
price therefor to the Remarketing Agent.
(e) On the Remarketing Date, the Remarketing Agent shall use
commercially reasonable efforts to remarket, at a price equal to 100.25% of the
aggregate stated liquidation amount thereof, the Preferred Securities tendered
or deemed tendered for purchase.
(f) If, as a result of the efforts described in 7.13(e), the
Remarketing Agent has determined that it will not be able to remarket all of the
Preferred Securities tendered or deemed tendered for purchase at a price of
100.25% of the aggregate stated liquidation amount of such Preferred Securities,
the Remarketing Agent shall determine the Reset Rate, which shall be the rate
per annum (rounded to the nearest one-thousandth (0.001) of one percent per
annum), adjusted up or down, sufficient to cause the then current aggregate
market value of the Preferred Securities to be equal to 100.25% of the aggregate
stated liquidation amount of such Preferred
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Securities, that the Remarketing Agent determines, in its sole reasonable
judgment, to be the lowest rate per annum that will enable it to remarket all of
the Preferred Securities tendered or deemed tendered for Remarketing.
(g) If none of the Holders of the Preferred Securities or the holders
of the PEPS Units elect to have Preferred Securities remarketed in the
Remarketing, the Reset Rate shall be the rate determined by the Remarketing
Agent, in its sole reasonable discretion, as the rate that would have been
established had a Remarketing been held on the Remarketing Date.
(h) If, by 4:00 P.M., New York City time, on the Remarketing Date, the
Remarketing Agent is unable to remarket all of the Preferred Securities tendered
or deemed tendered for purchase, a failed Remarketing ("Failed Remarketing")
shall be deemed to have occurred and the Remarketing Agent shall so advise by
telephone the Depositary, the Property Trustee, the Trust and the Sponsor. In
the event of a Failed Remarketing, the Reset Rate shall equal the Two-Year
Benchmark Treasury Rate plus the Applicable Margin.
(i) By approximately 4:30 P.M., New York City time, on the Remarketing
Date provided that there has not been a Failed Remarketing, the Remarketing
Agent shall advise, by telephone (i) the Depositary, the Property Trustee, the
Trust and the Sponsor of the Reset Rate determined in the Remarketing and the
number of Preferred Securities sold in the Remarketing, (ii) each purchaser (or
the Depositary Participant thereof) purchasing Preferred Securities sold in the
Remarketing of the Reset Rate and the number of Preferred Securities such
purchaser is to purchase and (iii) each purchaser to give instructions to its
Depositary Participant to pay the purchase price on the Purchase Contract
Settlement Date in same day funds against delivery of the Preferred Securities
purchased through the facilities of the Depositary.
(j) In accordance with the Depositary's normal procedures, on the
Remarketing Settlement Date, the transactions described above with respect to
each Preferred Security tendered for purchase and sold in the Remarketing shall
be executed through the Depositary, and the accounts of the respective
Depositary Participants shall be debited and credited and such Preferred
Securities delivered by book-entry as necessary to effect purchases and sales of
such Preferred Securities. The Depositary shall make payment in accordance with
its normal procedures.
(k) If any Holder of the Preferred Securities selling Preferred
Securities in the Remarketing fails to deliver such Preferred Securities, the
Depositary Participant of such selling Holder and of any other Person that was
to have purchased Preferred Securities in the Remarketing may deliver to any
such other Person a number of Preferred Securities that is less than the number
of Preferred Securities that otherwise was to be purchased by such Person. In
such event, the number of Preferred Securities to be so delivered shall be
determined by such Depositary Participant, and delivery of such lesser number of
Preferred Securities shall constitute good delivery.
(l) The Remarketing Agent is not obligated to purchase any Preferred
Securities that otherwise would remain unsold in the Remarketing. None of the
Trust, any Trustee, the Sponsor or the Remarketing Agent shall be obligated in
any case to provide funds to make payment upon tender of the Preferred
Securities for Remarketing.
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(m) Under the Remarketing Agreement, the Sponsor, in its capacity as
Senior Deferrable Notes Issuer, shall be liable for, and shall pay, any and all
costs and expenses incurred in connection with the Remarketing, and the Trust
shall not have any liabilities for such costs and expenses; provided, however,
that for the performance of its services, the Remarketing Agent will retain from
the proceeds of the Remarketing an amount equal to 0.25% of the aggregate stated
liquidation amount of all remarketed Preferred Securities.
(n) The tender and settlement procedures set in this Section 7.13,
including provisions for payment by purchasers of the Preferred Securities in
the Remarketing, shall be subject to modification to the extent required by the
Depositary or if the book-entry system is no longer available for the Preferred
Securities at the time of the Remarketing, to facilitate the tendering and
remarketing of the Preferred Securities in certificated form. In addition, the
Remarketing Agent may modify the settlement procedures set forth herein in order
to facilitate the settlement process.
ARTICLE 8: DISSOLUTION AND TERMINATION OF THE TRUST
SECTION 8.1 Dissolution and Termination of the Trust.
(a) The Trust shall dissolve upon the earliest of:
(i) the bankruptcy of the Senior Deferrable Notes Issuer;
(ii) the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor or the revocation of the
Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) the entry of a decree of judicial dissolution of the
Sponsor or the Trust;
(iv) the time when all of the Securities shall have been
called for redemption and the amounts then due shall have been paid to
the Holders of the Securities;
(v) the direction by the Property Trustee, following the
occurrence and continuation of a Tax Event pursuant to which the Trust
is to be dissolved and all of the Senior Deferrable Notes distributed
to the Holders of the Securities in exchange for all of the Securities;
(vi) at the Sponsor's sole discretion, by notice and direction
to the Property Trustee to distribute the Senior Deferrable Notes to
the Holders of the Securities in exchange for all of the Securities;
provided that the Sponsor will be required to obtain an opinion of
counsel that the distribution of the Senior Deferrable Notes will not
be taxable to the holders of the Preferred Securities for United States
federal income tax purposes; or
(vii) the time when all of the Regular Trustees and the
Sponsor have consented to dissolution of the Trust, provided such
action is taken before the issuance of any Securities.
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(b) As soon as is practicable after the occurrence of an event referred
to in Section 8.1(a) and upon completion of the winding up and liquidation of
the Trust, the Regular Trustees shall terminate the Trust by executing and
filing a certificate of cancellation with the Secretary of State of the State of
Delaware.
(c) The provisions of Section 4.2 and Article 9 shall survive the
termination of the Trust.
SECTION 8.2 Liquidation Distribution Upon Dissolution of the Trust.
(a) In the event of any voluntary or involuntary liquidation,
dissolution, or winding-up of the Trust (each a "Liquidation") based on the
occurrence of an event specified in Section 8.1(a) (other than clauses (iv) or
(v)), the Holders of the Securities on the date of the Liquidation shall be
entitled to receive on a Pro Rata basis, after satisfaction of the Trust's
liabilities to creditors, Senior Deferrable Notes in 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 accumulated and unpaid Distributions on, such Securities in exchange
for such Securities; provided if the Liquidation occurs prior to the Purchase
Contract Settlement Date, the Senior Deferrable Notes receivable by the Holders
shall be transferred to the Collateral Agent.
(b) Notice of Liquidation shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not later than 30 nor more than 60
days prior to the date of the Liquidation to each Holder of Securities at such
Holder's address appearing in the Securities register. All notices of
Liquidation shall:
(i) state the date of the Liquidation;
(ii) state that from and after the date of the Liquidation,
the Securities will no longer be deemed to be outstanding and any
Certificates not surrendered for exchange will be deemed to represent
the Senior Deferrable Notes in a principal amount equal to the stated
liquidation amount of the Securities, bearing accrued and unpaid
interest in an amount equal to the accumulated and unpaid Distribution
on the Securities; and
(iii) provide such information with respect to the mechanics
by which Holders may exchange Certificates for Senior Deferrable Notes,
or if Section 8.2(d) applies receive a distribution, as the Property
Trustee shall deem appropriate.
(c) Except where Section 8.1(a)(iv) or (v) or Section 8.2(d) applies,
in order to affect the liquidation of the Trust and distribution of the Notes to
Holders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the date of the
Liquidation) and, either itself acting as exchange agent or through the
appointment of a separate exchange agent, shall establish such procedures as it
shall deem appropriate to effect the distribution of Senior Deferrable Notes in
exchange for the outstanding Certificates.
(d) In the event that, notwithstanding the other provisions of this
Section 8.2, whether because of an order for dissolution entered by a court of
competent jurisdiction or otherwise, distribution of the Senior Deferrable Notes
in the manner provided herein is determined by the Property Trustee not to be
practical, the property of the Trust shall be liquidated, and the Trust
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shall be wound-up and terminated, by the Property Trustee in such manner as the
Property Trustee reasonably determines. In such event, on the date of the
winding-up and termination of the Trust, the Holders of the Securities on the
date of the Liquidation shall be entitled to receive, out of the assets of the
Trust available for distribution to the Holders of the Securities after
satisfaction of the Trust's liabilities to creditors, if any, cash or other
immediately available funds in an amount equal to the aggregate of the stated
liquidation amount of $25 per Security plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"); provided if the Liquidation occurs prior to the Purchase
Contract Settlement Date, the Redemption Price payable to the Collateral Agent,
in liquidation of the Holders' interests in the Preferred Securities, will be
distributed to the Collateral Agent, which in turn will apply an amount equal to
the Redemption Amount of such Redemption Price to purchase the Treasury
Portfolio on behalf of the Holders of the Securities and remit the remaining
portion, if any, of such Redemption Price to the Purchase Contract Agent for
payment to the Holders. If, upon any such Liquidation, the Liquidation
Distribution can be paid only in part because the Trust has insufficient assets
available to pay the aggregate Liquidation Distribution in full, then the
amounts payable directly by the Trust on the Securities shall be paid on a Pro
Rata basis. The Holders of the Common Securities shall be entitled to receive
the Liquidation Distribution Pro Rata with the Holders of the Preferred
Securities, except that if an Indenture Event of Default has occurred and is
continuing, then the Preferred Securities shall have a preference over the
Common Securities with regard to the Liquidation Distribution.
(e) After the date fixed for any distribution of Senior Deferrable
Notes upon dissolution of the Trust, (i) the Securities no longer shall be
deemed to be outstanding and (ii) the Certificates shall be deemed to represent
the Senior Deferrable Notes in a principal amount equal to the stated
liquidation amount of the Securities, bearing accrued and unpaid interest in an
amount equal to the accumulated and unpaid Distributions on the Securities,
until such Certificates are presented to the Regular Trustees or agent for
transfer or reissuance.
ARTICLE 9: LIMITATION OF LIABILITY OF
HOLDERS OF THE SECURITIES, THE DELAWARE TRUSTEE AND OTHERS
SECTION 9.1 Liability.
(a) Except as expressly set forth in this Declaration and the
Guarantee, the Sponsor and the Trustees:
(i) shall not be personally liable for the return of any
portion of the capital contributions (or any return thereon) of the
Holders of the Securities that will be made solely from assets of the
Trust; and
(ii) shall not be required to pay to the Trust or to any
Holder of the Securities any deficit, upon dissolution of the Trust or
otherwise.
(b) Pursuant to Section 3803(a) of the Business Trust Act, the Holder
of the Common 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; provided that the
Holders of the Common Securities shall be liable for all of the debts
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and obligations of the Trust (other than with respect to the Securities) to the
extent such debts and obligations are not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the Holder
of the Preferred Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 9.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or to 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
that 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, in
the case of the Property Trustee, negligence) or willful misconduct with respect
to such acts or omissions.
(b) Each 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 such
Indemnified Person reasonably believes to be 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 the Securities might properly be paid.
SECTION 9.3 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 Property Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between a
Covered Person and an Indemnified Person; or
(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,
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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.
SECTION 9.4 Indemnification.
(a) To the fullest extent permitted by applicable law, the Sponsor, in
its capacity as Senior Deferrable Notes Issuer, shall indemnify and hold
harmless each Indemnified Person from and against any loss, damage or claim
incurred by such Indemnified Person 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 authority conferred on such Indemnified Person by this Declaration, except
that no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions.
(b) The provisions of this Section 9.4 shall survive the termination of
this Declaration or the resignation or removal of any Trustee.
(c) The Sponsor or the Trust may purchase and maintain insurance on
behalf of any Person who is or was an Indemnified Person against any liability
asserted against him or her and incurred by him or her in any such capacity, or
arising out of his or her status as such, whether or not the Sponsor would have
the power to indemnify him or her against such liability under the provisions of
this Section 9.4.
(d) For purposes of this Section 9.4, 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
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the same position under the provisions of this Section 9.4 with respect to the
resulting or surviving entity as he or she would have had with respect to such
constituent entity if its separate existence had continued.
(e) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 9.4 shall continue, unless otherwise provided
when authorized or ratified, as to a Person who has ceased to be an Indemnified
Person and shall inure to the benefit of the heirs, executors and administrators
of such a Person.
SECTION 9.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee (subject to Section 6.3(c)) may engage in or possess an
interest in other business ventures of any nature or description, independently
or with others, similar or dissimilar to the activities of the Trust, and the
Trust and the Holders of the 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
activities of the Trust, shall not be deemed wrongful or improper. Each Covered
Person, the Sponsor, the Delaware Trustee and the Property Trustee shall not be
obligated to present any particular investment or other opportunity to the Trust
even if such opportunity is of a character that, if presented to the Trust,
could be taken by the Trust, and any Covered Person, the Sponsor, the Delaware
Trustee and the Property Trustee shall have the right to take for its own
account (individually or as a partner or fiduciary) or to recommend to others
any such particular investment or other opportunity. Any Covered Person, the
Delaware Trustee and the Property Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the Sponsor,
or may act as depositary for, trustee or agent for, or act on any committee or
body of holders of, securities or other obligations of the Sponsor or its
Affiliates.
ARTICLE 10: ACCOUNTING
SECTION 10.1 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 10.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or shall cause to be kept, full books of account, records
and supporting documents, which shall reflect in reasonable detail each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes. The books of account
and the records of the Trust shall be examined by and reported upon as of the
end of each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Regular Trustees.
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(b) The Regular Trustees shall cause to be prepared and delivered to
each Holder of Securities, within 90 days after the end of each Fiscal Year of
the Trust, annual financial statements of the Trust, including a balance sheet
of the Trust as of the end of such Fiscal Year, and the related statements of
income or loss.
(c) The Regular Trustees shall cause to be duly prepared and delivered
to each Holder of Securities an 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.
(d) 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 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 on behalf
of the Trust with any state or local taxing authority.
SECTION 10.3 Banking.
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; provided that all payments of funds in
respect of the Senior Deferrable Notes held by the Property Trustee shall be
made directly to the Property Account and no other funds of the Trust shall be
deposited in the Property Account. The sole signatories for such accounts shall
be designated by the Regular Trustees; provided that the Property Trustee shall
designate the signatories for the Property Account.
SECTION 10.4 Withholding.
The Trust and the Regular Trustees shall comply with all
withholding requirements under United States federal, state and local law. The
Regular Trustees shall request, and the Holders of the Securities shall provide
to the Trust, such forms or certificates as are necessary to establish an
exemption from withholding with respect to each Holder of Securities and any
representations and forms as shall reasonably be requested by the Regular
Trustees to assist them in determining the extent of, and in fulfilling, the
Trust's withholding obligations. The Regular Trustees shall file required form
with applicable jurisdictions and, unless an exemption from withholding is
properly established by a Holder of Securities, shall remit amounts withheld
with respect to such 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 of Securities, the amount
withheld shall be deemed to be a distribution in the amount of the withholding
to such Holder. In the event of any claimed over withholding, a Holder 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.
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ARTICLE 11: AMENDMENTS AND MEETINGS
SECTION 11.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may be amended only by a
written instrument approved and executed by the Sponsor and (i) the Regular
Trustees (or, if there are more than two Regular Trustees, a majority of the
Regular Trustees) and (ii) the Property Trustee (if the amendment affects the
rights, powers, duties, obligations or immunities of the Property Trustee) and
(iii) by the Delaware Trustee (if the amendment affects the rights, powers,
duties, obligations or immunities of the Delaware Trustee).
(b) No amendment shall be made, and any such purported amendment shall
be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Property Trustee first has 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 that
affects the rights, powers, duties, obligations or immunities of the
Property Trustee, the Property Trustee first has 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 (which 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 be classified other than
as a grantor trust for United States federal
income tax purposes;
(B) reduce or otherwise adversely affect the
powers of the Property Trustee in
contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an
Investment Company required to be registered
under the Investment Company Act.
(c) At such time after the Trust has issued any Securities that remain
outstanding, (i) any amendment that would (A) adversely affect the powers,
preferences or special rights of the Securities, whether by way of amendment to
this Declaration or otherwise or (B) result in the dissolution, winding-up or
termination of the Trust other than pursuant to the terms of this
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Declaration shall not be effective except with the approval of the Holders of at
least a 66 2/3% in Liquidation Amount of the Securities; provided that if any
amendment or proposal referred to in clause (A) above would adversely affect
only the Preferred Securities or 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 66 2/3% in
Liquidation Amount of the class of Securities affected thereby; and (ii) any
amendment that would (X) change the amount or timing of any distribution of the
Securities or otherwise adversely affect the amount of any distribution require
to be made in respect of the Securities as of a specified date or (Y) restrict
the right of a Holder of Securities to institute suit for the enforcement of
such payment on or after such date shall not be effective except with the
approval of each Holder of Securities affected thereby.
(d) This Section 11.1 shall not be amended without the consent of all
of the Holders of the Securities.
(e) Article 4 shall not be amended without the consent of the Holders
of the Common Securities.
(f) The rights of the Holders of the Common Securities under Articles
to increase or decrease the number of, and appoint and remove, Trustees shall
not be amended without the consent of the Holders of the Common Securities.
(g) Notwithstanding Section 11.1(c), this Declaration may be amended
without the consent of the Holders of the Securities, provided that such
amendment does not have a material adverse effect on the rights, preferences or
privileges of the Holders of the Securities:
(i) to cure any ambiguity;
(ii) to correct or supplement any provision in this
Declaration that may be defective or inconsistent with any other
provision of this Declaration;
(iii) to add to the covenants, restrictions or obligations of
the Sponsor;
(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;
(v) to modify, eliminate and add to any provision of this
Declaration to ensure that the Trust will be classified as a grantor
trust for United States federal income tax purposes at all times that
any Securities are outstanding or to ensure that the Trust will not be
required to register as an Investment Company under the Investment
Company Act; provided that such modification, elimination or addition
would not adversely affect in any material respect the rights,
privileges or preferences of any Holder of Securities; or
(vi) to facilitate the tendering, remarketing and settlement
of the Preferred Securities as contemplated by Section 7.13(n).
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SECTION 11.2 Meetings of the Holders of the 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 or the rules of any
stock exchange on which the Preferred 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 a writing stating that the signing Holders of the Securities
wish to call a meeting and indicating the general or-specific purpose for which
the meeting is to be called. The Holder or Holders of the Securities calling a
meeting shall specify in writing the Certificates held by such Holder or
Holders, 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 the Holders of
the Securities:
(i) Notice of any such meeting shall be given to all the
Holders of the 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 the Securities
is permitted or required under this Declaration or the rules of any
stock exchange on which the Preferred Securities are listed or admitted
for trading, such vote, consent or approval may be given at a meeting
of the Holders of the Securities. Any action that may be taken at a
meeting of the Holders of the Securities may be taken without a meeting
and without prior notice if a consent in writing setting forth the
action so taken is signed by the Holders of the 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 the 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 the Securities entitled to
vote who have not consented in writing. The Regular Trustees may
specify that any written ballot submitted to the Holders of the
Securities 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 the Securities may authorize any Person to
act for it by proxy on any or all matters in which such Holder 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 such proxy. Except as otherwise provided
herein, all matters relating to the giving, voting or validity of
proxies shall be governed by the General Corporation Law of the State
of Delaware relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware corporation and the Holders
of the Securities were stockholders of a Delaware corporation.
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(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.
(iv) Unless the Business Trust Act, this Declaration, the
Trust Indenture Act or the listing rules of any stock exchange on which
the Preferred Securities are then listed for trading otherwise
provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of the
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 the
Securities, waiver of any such notice, action by consent without a
meeting without prior notice, 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 12: REPRESENTATIONS OF THE PROPERTY TRUSTEE
AND THE DELAWARE TRUSTEE
SECTION 12.1 Representations and Warranties of the Property Trustee.
The initial Property Trustee represents and warrants to the Trust and
to the Sponsor at the date of this Declaration, and each Successor Property
Trustee represents and warrants to the Trust and the Sponsor at the time of such
Successor Property Trustee's acceptance of its appointment as Property Trustee,
that:
(a) the Property Trustee is a corporation or national banking
association duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization, 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 Property Trustee satisfies the requirements set forth in
Section 6.3(a);
(c) the execution, delivery and performance by the Property Trustee of
this Declaration have been duly authorized by all necessary corporate action on
the part of the Property Trustee; this Declaration has been duly executed and
delivered by the Property Trustee, and it constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(d) the execution, delivery and performance of this Declaration by the
Property Trustee do not conflict with, nor constitute a breach of, the articles
of association or incorporation, as the case may be, or the by-laws (or other
similar organizational documents) of the Property Trustee; and
(e) no consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the execution
delivery or performance by the Property Trustee of this Declaration.
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SECTION 12.2 Representations and Warranties of the Delaware Trustee.
The 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 such
Successor Delaware Trustee's acceptance of its appointment as Delaware Trustee,
that:
(a) the Delaware Trustee satisfies the requirements set forth in
Section 6.2 and has the power and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this Declaration and, if it
is not a natural person, is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation or
organization;
(b) the Delaware Trustee has been authorized to perform its obligations
under the Certificate of Trust and this Declaration; and this Declaration
constitutes a legal, valid and binding obligation of the Delaware Trustee under
Delaware law, 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) and
(c) no consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee of this Declaration.
ARTICLE 13: MISCELLANEOUS
SECTION 13.1 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 registered or certified 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 Property Trustee, the Delaware Trustee and the Holders of
the Securities):
VEC Trust I
One Valero Place
P.O. Box 500
San Antonio, Texas 78212
Attention: Jay D. Browning, Corporate Secretary
Telephone No: (210) 370-2031
Fax No: (210) 370-2988
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with a copy to:
Attention: Donna M. Titzman
Telephone No: (210) 370-2180
Fax No: (210) 370-2497
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as the Delaware Trustee may give notice of to the
Regular Trustees, the Property Trustee and the Holders of the Securities):
The Bank of New York (Delaware)
c/o The Bank of New York
101 Barclay Street
21 West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Telephone No: (212) 815-3703
Fax No: (212) 815-5915
(c) if given to the Property Trustee, at its Corporate Trust Office to
the attention of Corporate Trust Trustee Administration (telephone no. (212)
815-3703 and fax no. (212) 815-5915) (or such other address as the Property
Trustee may give notice of to the Regular Trustees, the Delaware Trustee and the
Holders of the Securities);
(d) if given to the Holders of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holders of
the Common Securities may give notice of to the Property Trustee, the Delaware
Trustee and the Trust):
Valero Energy Corporation
One Valero Place
San Antonio, Texas 78212
Attention: Jay D. Browning, Corporate Secretary
Telephone No: (210) 370-2031
Fax No: (210) 370-2988
with a copy to:
Attention: Donna M. Titzman
Telephone No: (210) 370-2180
Fax No: (210) 370-2497
(e) if given to any Holder of Preferred Securities, at such Holder's
address as set forth in the register 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
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document is refused delivery or cannot be delivered because of a changed address
of which no notice was given, such notice or other document shall be deemed to
have been delivered on the date of such refusal or inability to deliver.
SECTION 13.2 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, without regard to principles of conflicts of laws.
SECTION 13.3 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 in a manner consistent with such
classification.
SECTION 13.4 Headings.
The 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 13.5 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 Trustee shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 13.6 Partial Enforceability.
If any provision of this Declaration or the application of such
provision to any Person or circumstance is 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 13.7 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 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.
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IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed as of the day and year first above written.
VALERO ENERGY CORPORATION,
as Sponsor, Senior Deferrable Notes Issuer and
Common Securities Holder
By:
-------------------------------------------
John D. Gibbons, Vice President and
Chief Financial Officer
THE BANK OF NEW YORK,
as Property Trustee
By:
-------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By:
-------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
-----------------------------------------------
Jay D. Browning, as Regular Trustee
-----------------------------------------------
John D. Gibbons, as Regular Trustee
-----------------------------------------------
Donna M. Titzman, as Regular Trustee
<PAGE> 73
EXHIBIT A
This Preferred Security is a Global Security within the meaning of the
Amended and Restated Declaration of VEC TRUST I hereinafter referred to and is
registered in the name of The Depository Trust Company, a New York corporation
(the "Depositary"), or a nominee of the Depositary. This Preferred Security is
exchangeable for Preferred 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 Preferred Security (other than a
transfer of this Preferred 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 Preferred Security Certificate is presented by an
authorized representative of the Depositary to the issuer or its agent for
registration of transfer, exchange or payment, and any Preferred Security
Certificate issued is registered in the name of Cede & Co. or such other name as
registered by an authorized representative of the Depositary (and any payment
hereon is made to Cede & Co. or to such other entity as is requested by an
authorized representative of the Depositary), and except as otherwise provided
in the Amended and Restated Declaration of VEC Trust I dated June 28, 2000, ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL, since the registered owner hereof, Cede & Co., has an interest
herein.]
Certificate No._____ Number of Preferred Securities: ______
CUSIP No. 91913Y308 Aggregate Liquidation Amount: $______
Certificate Evidencing Preferred Securities
of
VEC Trust I
Preferred Securities
(liquidation amount $25 per Preferred Security)
VEC Trust I, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that Cede & Co. (the "Holder")
is the registered owner of preferred securities of the Trust representing
undivided beneficial interests in the assets of the Trust designated the
Preferred Securities (liquidation amount $25.00 per Preferred Security) (the
"Preferred Securities"). The Preferred Securities are transferable on the
register of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer as
provided in the Declaration (as defined below). The designation rights,
privileges, restrictions, preferences and other terms and provisions of the
Preferred Securities represented hereby are issued and shall in all respect be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust, dated as of June 28, 2000 (as the same may be amended from time to
time (the "Declaration"), among Valero Energy Corporation, as Sponsor, Jay D.
Browning, John D. Gibbons and Donna M. Titzman, as Regular Trustees, The Bank of
New York, as Property Trustee, The Bank of New York (Delaware), as Delaware
Trustee, and the holders from time to time, of undivided beneficial interests in
the assets of the
A-1
<PAGE> 74
Trust. 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
Guarantee Agreement, dated as of June 28, 2000, as the same may be amended from
time to time, of Valero Energy Corporation, in respect of the Preferred
Securities. The Sponsor will provide a copy of the Declaration, the Guarantee
and the Indenture to a Holder without charge upon written request to the Sponsor
at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the terms of
the Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Senior Deferrable Notes as indebtedness of the Sponsor
and the Preferred Securities as evidence of undivided indirect beneficial
ownership interests in the Senior Deferrable Notes.
A-2
<PAGE> 75
IN WITNESS WHEREOF, the Trust has executed this certificate this ____
day of _________________, 2000.
VEC TRUST I
-------------------------------------------
By: John D. Gibbons
Regular Trustee
This is one of the Securities referred to in the within-mentioned
Declaration.
THE BANK OF NEW YORK, as
Property Trustee
-------------------------------------------
By:
---------------------------------------
Title:
------------------------------------
A-3
<PAGE> 76
EXHIBIT B
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS PROVIDED IN
THE DECLARATION (AS DEFINED BELOW)
Certificate No.______ Number of Common Securities: ________
Aggregate Liquidation Amount: $______
Certificate Evidencing Common Securities
of
VEC Trust I
Common Securities
(liquidation amount $25 per Common Security)
VEC Trust I, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that Valero Energy Corporation
(the "Holder") is the registered owner of _________________ common securities of
the Trust representing an undivided beneficial interest in the assets of the
Trust designated the Common Securities (liquidation amount $25.00 per Common
Security) (the "Common Securities"). Except as provided in the Declaration (as
defined below), the Common Securities are not transferable, and any attempted
transfer thereof shall be void. 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 28, 2000 (as the same may be amended from time to time, the
"Declaration"), among Valero Energy Corporation, as Sponsor, Jay D. Browning,
John D. Gibbons and Donna M. Titzman, as Regular Trustees, The Bank of New York,
as Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, and
the holders, from time to time, of undivided beneficial ownership interests in
the assets of the Trust. The Sponsor will provide a copy of the Declaration and
the Indenture to the Holder without charge upon written request to the Sponsor
at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the terms of
the Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Senior Deferrable Notes as indebtedness of the Sponsor
and the Common Securities as evidence of an undivided indirect beneficial
ownership interest in the Senior Deferrable Notes.
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IN WITNESS WHEREOF, the Trust has executed this certificate this ______
day of June, 2000.
VEC TRUST I
-------------------------------------------
By: John D. Gibbons
Regular Trustee
B-2
